The Central Bank of Nigeria (CBN), recently released its 2024 Financial Statements, with a superlative performance, silencing all naysayers in the country.
The positive results show a commanding leadership and teamwork under the present Governor, Mr. Olayemi Cardoso.
The results were also a clear reflection of the Bank’s commitment to economic stability, sound policy implementation, and strategic financial management.
The commitment was manifested in the robust external reserves position, asset quality, cost efficiency and overall bottom-line performance of the bank.
Coming on board about two years ago, nobody gave the current leadership a chance, apparently because of the reforms introduced to reposition the bank.
Nevertheless, the leadership was resolute in tackling institutional deficiencies, restoring corporate governance, strengthening regulations, and implementing prudent policies.
On assumption of office, after his announcement by President Bola Tinubu to head the apex bank, Cardoso observed that the bank has deviated from its core mandates and engaged in quasi-fiscal activities that injected over N10 trillion into the economy through various initiatives across diverse sectors such as agriculture, aviation, power, and youth development.
The activities, he noted, had distracted the Bank from achieving its own objectives, emphasising the need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.
He pledged to work towards the administration’s ambitious goal of achieving a $1.0 trillion Gross Domestic Product (GDP) by the year 2030, starting with the recapitalisation of banks.
The CBN’s decisive policies have not only tamed the inflationary pressure on the nation’s economy, but have also increased the financial inflows into the country.
Nigeria recorded a strong foreign exchange (FX) inflow in Q4, 2024 with net inflows reaching $61.2 billion year-on-year. This was largely driven by autonomous sources, such as foreign investments, remittances, and export earnings.
External Reserves
The CBN’s latest financial results show an increase in external reserves from $36.6bn in 2023 to $38.8bn in 2024 -an improved accretion from portfolio investors, diaspora remittances and Federal Government receipts. This reflects CBN’s firm commitment to external sector stability, ensuring Nigeria is better positioned to meet its international obligations, stabilize the Naira, and boost macroeconomic confidence.
Improved Bottom-line Performance
CBN, in 2024 posted a surplus of N165 billion -a commanding bottom-line improvement from a deficit position of N1.3trillon in 2023. This turnaround, the bank disclosed, was a direct consequence of effective containment of expenditure, gains on investments made by the Bank and increased income from foreign exchange transactions.
Reduction in Loans and Receivables
The bank’s financial statements also show a notable reduction in loans and receivables from N16.1 trillion to N11.9 trillion. This was made possible through significant recoveries from earlier intervention lending programs, a deliberate policy shift away from intervention lending and monetary financing through ways and means in line with the Bank’s new stance on allowing market mechanisms to drive credit allocation and financial sector development.
Other Operating Expenses
The bank’s operating expenses in 2024 were well-managed and optimized, reflecting a cost-conscious culture. This was achieved through strategic cost rationalization initiatives, including reduction in non-essential spending and streamlined operations across regional branches and departments.
Successful Adoption of Internal Control over Financial Reporting (ICFR)
CBN was able to carry out an assessment of its internal controls, in line with the Financial Reporting Council (FRC) regulatory requirement on ICFR, which was certified effective by the joint external audit team. This was aimed at enhancing transparency and accountability in financial reporting, strengthening institutional governance and internal risk controls, and aligning with international best practices in central bank operations. As a testament to the effectiveness of this initiative, the joint external auditors issued an independent assurance report declaring the Bank’s ICFR framework to be “effective” for the 2024 reporting period.
While there are no doubts on the operational improvements of CBN as captured in the 2024 financial results, some expenditure lines posed challenges:
Increased Liquidity Management Expenses
One of the notable increases in the Bank’s expenses in 2024 was related to liquidity management operations. These costs rose from N1.5 trillion in 2023 to N4.5trillion in 2024. The increase was due to the tightening monetary policy stance adopted to combat inflationary pressures throughout the year. In pursuit of that the Bank conducted more frequent and higher-value Open Market Operations (OMO) to mop up excess liquidity arising from fiscal injections at a significant cost. This is a responsibility CBN is carrying out on behalf of the Federation, in some jurisdictions, this cost is borne by the Government.
Loss on Settled Derivative Contracts
According to the financial statements, CBN also recorded an increase in the loss on settled derivative contracts during the year from N6.3trillion in 2023 to N13.9trion in 2024 – a direct consequence of the high volume of derivative contracts settled by the Bank in 2024. These are legacy transactions which the current management met on resumption of their office. This proactive settlement effort was undertaken as part of management’s broader strategy to Reduce outstanding foreign exchange liabilities, thus lowering its FX exposure, boost net foreign reserves, thereby improving Nigeria’s external buffer and investor confidence, restore credibility to Nigeria’s forward markets and address legacy obligations transparently.
Overall, the bank’s performance has shown a commanding leadership that has reinforced governance and accountability, instilled operational discipline and pursued a balanced monetary policy stance, ensuring price and financial system stability.
It has also shown the potency of the reforms which have collectively repositioned the CBN as a credible monetary authority ready to support economic recovery, safeguard financial stability, and build public trust.
