The Central Bank of Nigeria (CBN) has released its 2024 financial statements’ results, which reflected the its commitment to economic stability, sound policy implementation, and strategic financial management, highlighting improvements in external reserves, asset quality, cost efficiency and overall bottom-line improvement.
According to the financial results for the financial year (FY) shared with journalists on Thursday, the CBN reported a remarkable improvement in its bottom-line, with the deficit position of N1.3trn in 2023 surging to a surplus of N165bn in 2024.
The management attributed the feat to the direct consequence of effective containment of expenditure, gains on investments made by the Bank and increased income from foreign exchange transactions.
In addition, the apex bank pushed the nation’s External Reserves from $36.6bn in 2023 to $38.8bn in 2024, linking the improvement in accretion to external reserves to portfolio investors, diaspora remittances and Federal Government’s receipts following improvement in the confidence in the economy.
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The CBN management also reported that the improved external reserves was facilitated by better coordination with the Nigerian National Petroleum Company Limited (NNPCL) and diaspora engagement strategies. Also, proper investment management decisions aimed at boosting the reserves of the apex bank.
It maintained that the improved performance reflected its commitment to external sector stability, ensuring Nigeria is better positioned to meet its international obligations, stabilize the Naira, and boost macroeconomic confidence.
Other key highlights of the bank’s financial results in the year under review include a notable reduction in loans and receivables from N16.1trn to N11.9trn primarily due to significant recoveries from earlier intervention lending programmes, 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.
Similarly, the CBN’s operating expenses in 2024 were well-managed and optimized, reflecting a cost-conscious culture, which was achieved through strategic cost rationalization initiatives, including reduction in non-essential spending and streamlined operations across regional branches and departments.
In line with the Financial Reporting Council (FRC) regulatory requirement on ICFR, the apex bank conducted an assessment of its internal controls, which were certified effective by the joint external audit team.
Specifically, the internal controls exercise was aimed at enhancing transparency and accountability in financial reporting, strengthening institutional governance and internal risk controls, and aligning its controls with international best practices in central bank operations.
As a demonstration of 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 the Central Bank of Nigeria’s 2024 financial results reflected operational improvements, some expenditure lines posed challenges.
For instance, one of the notable upticks in the bank’s expenses in 2024 was related to liquidity management operations, the costs of which rose to N4.5trn from N1.5trn in 2023.
The apex bank’s management attributed the surge to the tightening monetary policy stance adopted to combat inflationary pressures throughout the year as well as its more frequent and higher-value Open Market Operations (OMO) exercises to mop up excess liquidity arising from fiscal injections at a significant cost.
It pointed out this was a responsibility that it carried out on behalf of the Federation, which in some jurisdictions, the cost is borne by the government.
A further analysis of the financial statements also reflected an increase in the loss on settled derivative contracts during the year from N6.3trn in 2023 to N13.9trn in 2024 as a direct consequence of the high volume of derivative contracts settled by the bank in 2024.
The bank indicated that these were legacy transactions which the current management met on resumption of their office, adding that the proactive settlement effort was undertaken as part of the new 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.
While noting that the improved performance of the bank in FY 2024 is not coincidental but a product of deliberate and strategic efforts, the apex bank’s management maintained that it had reinforced governance and accountability, instilling operational discipline, and pursued a balanced monetary policy stance, ensuring price and financial system stability.
Analysts believe that these reforms have collectively repositioned the CBN as a credible monetary authority, with the FY 2024 financial results demonstrating the management’s unwavering resolve to support economic recovery, safeguard financial stability, and build public trust.
