Following strategic reforms, the Central Bank of Nigeria (CBN)’s on Friday announced a significant improvement in its financial and operational performance for the year 2024, with its external reserves rising to $38.8 billion up from $36.6 billion in 2023.
The CBN 2024 Financial Performance released on Friday, indicates a return to profitability, and strengthened monetary policy frameworks reflecting renewed confidence in Nigeria’s economy and a strategic shift towards sustainable financial management.
The external reserves grew to $38.8 billion in 2024, largely driven by higher inflows from portfolio investors, diaspora remittances, and Federal Government receipts.
According to CBN, the growth underscores renewed investor confidence and was facilitated by enhanced coordination with the Nigerian National Petroleum Company (NNPC) and targeted diaspora engagement strategies, adding that prudent investment management decisions also played a key role in bolstering the Bank’s reserves.
Also, the strengthened reserves position enhances Nigeria’s capacity to meet international financial obligations, stabilize the Naira, and boost overall macroeconomic confidence.
The report also highlighted a remarkable turnaround as the CBN shifted from a ₦1.3 trillion deficit in 2023 to a ₦165 billion surplus in 2024, attributing the positive result to effective expenditure containment, gains from investments, and increased income from foreign exchange transactions, stressing that the Bank’s improved operational efficiency and financial discipline were crucial to the success.
“Strategic Reduction in Loans and Receivables
Loans and receivables declined significantly from ₦16.1 trillion to ₦11.9 trillion. This was driven by substantial recoveries of earlier intervention loans and a strategic policy shift away from intervention lending and monetary financing through ways and means.
The CBN’s new approach emphasizes market-driven credit allocation and financial sector development, signaling a commitment to more sustainable and market-oriented monetary policies.
“The Bank implemented strategic cost rationalization initiatives in 2024, resulting in optimized operating expenses. Measures included reducing non-essential spending and streamlining operations across regional branches and departments.
“This fostered a culture of cost-consciousness and improved operational efficiency within the institution.
“In compliance with Financial Reporting Council (FRC) regulations, the CBN successfully conducted an assessment of its internal controls over financial reporting.
The joint external audit team certified the Bank’s ICFR framework as “effective” for the 2024 reporting period. This milestone enhances transparency, accountability, and governance, aligning the Bank’s operations with international best practices.
“Despite these successes, the CBN faced increased expenditure pressures. Liquidity management costs surged to ₦4.5 trillion in 2024 from ₦1.5 trillion in 2023, reflecting the Bank’s tighter monetary policy stance aimed at combating inflation.
The CBN conducted more frequent and larger Open Market Operations (OMO) to absorb excess liquidity resulting from fiscal injections, costs borne on behalf of the Federation to maintain monetary stability.
“Additionally, losses on settled derivative contracts rose sharply from ₦6.3 trillion in 2023 to ₦13.9 trillion in 2024. This increase stems from the settlement of legacy derivative contracts inherited by the current management.
“The proactive settlement strategy is designed to reduce outstanding foreign exchange liabilities, lower FX exposure, boost net foreign reserves, restore credibility to Nigeria’s forward markets, and transparently address legacy obligations-critical steps to strengthening investor confidence” stated part of the statement.
The CBN’s 2024 financial performance and strategic reforms position Nigeria for greater economic stability and growth. By enhancing reserves, improving financial discipline, and adopting sustainable monetary policies, the Bank is fostering a more resilient financial system and reinforcing trust among investors and the public.
