By Michael Nwadike
The Central Bank of Nigeria (CBN) achieved revenue growth from a deficit of N1.3 trillion in 2023 to a surplus of N165 billion in 2024, data from its Consolidated and Separate Financial Statement for the year ended December 31, 2024 has shown. The external reserves also rose from $36.6 billion in 2023 to $38.8 billion in 2024. These and other positive indicators are products of deliberate and strategic management efforts to support economic recovery, safeguard financial stability, and build public trust.
Achieving significant growth in key performance metrics is not always easy for big corporations. It is even more tasking when the entity is a financial sector regulator.
That explains the excitement that greeted the recently released Central Bank of Nigeria (CBN) 2024 financial statements. The results reflect the bank’s 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.
Statement of directors’ responsibility signed by CBN Governor, Olayemi Cardoso, said the summary consolidated and separate financial statements are prepared in all material respects, in accordance with International Financial Reporting Standards (IFRS) Accounting Standards.
The growth in external reserves from $36.6 billion in 2023 to $38.8 billion in 2024 is largely attributable to improvement in accretion to external reserves from portfolio investors, diaspora remittances and Federal Government receipts following improvement in the confidence in the economy.
This was facilitated by better coordination with the Nigerian National Petroleum Company (NNPC) and diaspora engagement strategies as well as proper investment management decisions aimed at boosting the reserves of the Bank.
This performance reflects the 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.
There was also improvement in revenue trajectory, with the bottom-line rising from a deficit position of N1.3 trillion in 2023 to a surplus of N165 billion in 2024.
The apex bank explained that this turnaround is a direct consequence of effective containment of expenditure, gains on investments made by the Bank and increased income from foreign exchange transactions.
The financial statements also show a notable reduction in loans and receivables from N16.1 trillion to N11.9 trillion. This is primarily attributed 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.
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.
Also, one of the notable upticks in the bank’s expenses in 2024 was related to liquidity management operations. These costs rose to N4.5 trillion from N1.5 trillion in 2023.
This increase was in tandem with 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.
The financial statements also reflect an increase in the loss on settled derivative contracts during the year from N6.3 trillion in 2023 to N13.9 trillion in 2024.
This development is 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.
These reforms have collectively repositioned the CBN as a credible monetary authority, with its 2024 financial results serving as proof of its unwavering resolve to support economic recovery, safeguard financial stability, and build public trust.
The financial statements also show a notable reduction in loans and receivables from N16.1trn to N11.9 trillion.
This is primarily attributed 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.
“In line with the provisions of the Fiscal Responsibility Act (the Act) 2011, 20 percent of the profit of the bank will be credited to retained earnings while the balance will be paid to the Federal Government of Nigeria,” the bank said.
Statement of directors’ responsibility signed by CBN Governor, Olayemi Cardoso, said the summary consolidated and separate financial statements are prepared in all material respects, in accordance with International Financial Reporting Standards (IFRS) Accounting Standards.
It is the recommended practice in the guideline as it affects CBN operations, the relevant provisions of the CBN Act No. 7, 2007 and the Financial Reporting Council (FRC) of Nigeria (Amendment) Act, 2023.
According to the report, the performance reflects the state of the financial affairs of the CBN together with its subsidiaries, its financial performance and cash flows for the year ended December 31, 2024.
“The Board of Directors further accepts responsibility for the maintenance of accounting records that may be relied upon in the preparation of the summary consolidated and separate financial statements, as well as adequate systems of internal financial control,” the report said.
According to the apex bank, the group maintains a reserve of external assets consisting of Gold, Convertible currencies, Other foreign securities and International Monetary Fund (IMF) reserve tranche.
It disclosed that gold reserves include monetary gold in the Statement of Financial Position at the prevailing closing spot market price as at reporting date.
“Changes in the fair value of gold reserves arising from price changes as well as related foreign exchange gains and losses are recognised in profit or loss and applied prospectively in line with the revised 2024 FRC Guidelines. In the previous year, Gold was measured at fair value through other comprehensive income,” it said.
“These are time deposits and balances with foreign banks and other foreign securities where the currency is freely convertible and in such currency, notes, coins and money at call. These are securities of any country outside Nigeria whose currency is freely convertible and the securities shall mature in a period not exceeding five years from the date of acquisition,” it added.
The apex bank explained that the securities are further analysed into internally managed fund and externally managed fund. Internally managed fund is classified as amortised cost while the externally managed fund is classified as fair value through profit or loss.
“All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole,” the report said.
Assets reclassification
The CBN also reclassified its investments in Africa Finance Corporation (AFC), Nigeria Deposit Insurance Corporation (NDIC) and Afreximbank.
The investment reclassification from fair value through other comprehensive income (FVOCI) to fair value through profit or loss (FVTPL) was announced in the CBN’s Consolidated and Separate Financial Statement for the year ended December 31, 2024, released at the weekend.
The report indicated specifically that only financial assets can be reclassified, and not liabilities, stating that: “The Group reclassified investment in associate (AFC) and its unquoted equity investments in International Islamic Liquidity Management Corporation (IILMC), NDIC and Afrexim from FVOCI to FVTPL in 2024”.
“The Group determined that its investments in Nigeria Deposit Insurance Corporation (NDIC) are ordinary investments of the Group, although the Group owns 60 per cent. The Group cannot exert control or significant influence on the relevant activities as it has no power to appoint the board members.
The financial results showed that the CBN Group’s investment in AMCON of 50 per cent is held on behalf of the Federal Government of Nigeria in capacity as Banker to Federal Government of Nigeria,” it said.
“The Group also determined that its investments in Nigeria Interbank Settlement System (NIBSS), FMDQ-OTC Plc, Bank of Industry (BOI), Bank of Agriculture (BOA), National Economic Reconstruction Fund (NERFUND), Nigeria Commodity Exchange (NCX), Nigerian export Import Bank, Agricultural credit guarantee scheme fund and NIRSAL Microfinance bank are associates of the Group, although the Group owns a 3.6 per cent, 15.4 per cent, 40 per cent, 14 per cent, 3.6 per cent, 59.7 per cent, 50 per cent, 40 per cent, and 15 per cent respectively in the investees”.
The Group has significant influence over NIBSS, FMDO-OTC, BOI, BOA, NERFUND and NCX through its representation on the board of directors.
Financial analysts said reclassification of assets or shares is a process that allows a company to modify the structure of its shares, including their rights, preferences, and number of shares outstanding. This can be an important tool for adjusting the capital structure, improving governance, or addressing changes in the business environment.
The CBN explained that the reclassification was done in line with Financial Reporting Council Guideline for 2024. This application is prospective and the cumulative gains in fail value reserves were not recycled through profit or loss in line with the FRC Guideline.
Key elements of reforms/ policy measures
The CBN has not only unified the exchange rates but recently took strategic step to enhance transparency and boost market confidence with the inauguration of the Nigeria Foreign Exchange Code (FX Code) in Abuja. The FX Code has so far ignited naira stability at both official and parallel markets.
Cardoso, recently launched the FX Code, emphasising integrity, fairness, transparency, and efficiency as critical pillars for driving Nigeria’s economic growth and stability.
He emphasised that the FX Code was built on six core principles: ethics, governance, execution, information sharing, risk management and compliance, as well as confirmation and settlement processes.
These principles, he explained, aligned with international standards while addressing the unique challenges within Nigeria’s foreign exchange market.
According to Cardoso, “The FX Code represents a decisive step forward, setting clear and enforceable standards for ethical conduct, transparency, and good governance in our foreign exchange market. The era of opaque practices is over. The FX Code marks a new era of compliance and accountability. Under the CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions.”
Cardoso also noted that the journey towards market reform is already yielding results. He stated: “The year 2024 was marked by structural reforms that sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.”
Beyond the foreign exchange market, the FX Code forms part of the CBN’s renewed focus on compliance across the financial sector. Its six guiding principles, alongside 52 sub-principles, were designed to become the benchmark for conduct across all participating institutions.
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