By Chinwendu Obienyi
In a year marked by fragile recovery and mounting economic uncertainties across the globe, the Central Bank of Nigeria (CBN) appears to be rewriting its own narrative.
Once plagued by opacity, foreign exchange dysfunction and credibility concerns, the apex bank is charting a new course; one defined by policy clarity, transparency and a renewed commitment to macroeconomic stability.
The testament to this new course is evidenced in its 2024 financial statements, which was released at the weekend, pointing to a notable financial turnaround by the apex bank and inspiring cautious optimism among investors, business leaders and citizens alike.
Financial highlights
According to the apex bank, the results reflect 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.
External reserves position
The apex bank announced that its external reserves recorded an increase from $36.6 billion in 2023 to $38.8 billion in 2024. This 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 facilitated by better coordination with the Nigerian National Petroleum Company (NNPC) and diaspora engagement strategies.
Also, proper investment management decisions aimed at boosting the reserves of the Bank.
The 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.
Improved bottom-line performance
The apex bank’s bottom-line improved from a deficit position of N1.3 trillion in 2023 to a surplus of N165 billion in 2024. This turnaround was largely fueled by a substantial FX revaluation gain of N11.28 trillion, representing a 225 per cent year-on-year (y/y) increase, alongside a 29.16 per cent growth in interest income, which climbed to N5.1 trillion from N3.95 trillion in 2023.
Reduction in loans and receivables
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 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
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.
Timely and successful adoption of Internal Control over Financial Reporting (ICFR)
In line with the Financial Reporting Council (FRC) regulatory requirement on ICFR, it is worthy to note that the Central Bank was able to carry out an assessment of its internal controls which was further certified effective by the joint external audit team.
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.
Challenges
However, while the Central Bank of Nigeria’s 2024 financial results reflect operational improvements, some expenditure lines posed challenges.
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.
Secondly, 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. Thus, 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.
Furthermore, the CBN’s total equity declined. Specifically, group equity fell to N1.01 trillion from N2.01 trillion, and standalone equity dropped to N728.24 billion, down from N882.42 billion a year earlier. Also, cash and bank balances declined significantly to N34.72 billion from N111.15 billion.
Restoring credibility
Since assuming office in late 2023, CBN Governor, Olayemi Cardoso has steered a dramatic shift in monetary policy management. Breaking with the interventionist style of his predecessor, Cardoso has emphasized institutional autonomy, evidence-based decision-making, and stronger coordination with the fiscal authorities.
At the heart of this shift is the unification of Nigeria’s multiple exchange rates, a policy long recommended by international financial institutions and economic experts. By dismantling the fragmented FX window system and allowing market forces to play a greater role, the CBN has improved price discovery and brought a measure of stability to the naira. Although, there is still work to be done with the disparity between the official and unofficial exchange rate somewhat thin.
“Investors value predictability, and the new FX regime, while still evolving, sends a clear message that Nigeria is moving away from arbitrary controls. “That builds confidence”, says Tunde Lemo, a former CBN Deputy Governor.
That said, the apex bank’s 2024 performance sends a strong message: transparency, accountability, and discipline are back at the heart of Nigeria’s monetary policy. With the return to profitability, stronger reserves, and renewed commitment to global financial standards, the bank is rebuilding its credibility as Nigeria’s monetary authority.
Analysts’ views
While challenges remain, particularly in managing inflation and sustaining FX stability, economic analysts agree that the CBN’s latest report marks a meaningful step in the country’s path to economic recovery.
Chief Economist and Partner at SPM Professional, Paul Alaje, whilst speaking during a programme monitored by Daily Sun, maintained while trust in Nigeria’s financial system remains crucial, the CBN’s return to profitability signals an institutional pivot.
“At least we have better expense discipline, clearer policy direction, and improved communication with key stakeholders. However, the ballooning liquidity management costs and derivative losses remind us that the bank is still dealing with structural distortions from previous years. Hence, cleaning up those legacy positions is commendable, but costly”, Alaje stated.
Also speaking, the Chief Executive Officer, Crane Securities, Mike Eze, maintained that while profitability is important, sustainability is much more essential.
Eze added, “If the CBN maintains its focus on transparency, risk management, and market-based policy, it can build long-term credibility. The report shows progress, but consistency will matter most going forward.”
The improved performance of the Central Bank of Nigeria in 2024 is not coincidental but a product of deliberate, and strategic management efforts.
No doubt, the bank’s leadership has reinforced governance and accountability, instilled operational discipline, pursued a balanced monetary policy stance and ensured price and financial system stability.
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.