By Tony Obiechina, Abuja
The Central Bank of Nigeria (CBN), has released its audited financial statements for 2016-2022, amid an ongoing investigation of its operations.
The apex bank said the financial statements of the last seven years — posted on its website — had been approved by its board in accordance with the provisions of the CBN Act of 2007.
Investigations showed that the CBN recorded a profit of N65.63 billion in 2022 — more than double the figure it reported a year earlier (N31.04 billion).
In the period under review, CBN (the Group) recorded a profit of N103.85 billion. The Group refers to CBN and its subsidiaries including the Nigerian Security Printing & Minting Plc (MINT), Nigerian Electricity Supply Industry Stabilisation Strategy Limited (NESI SS Ltd), among others.
“The Group and bank’s profit for the year was N103,854 million and N65,626 million respectively (2021: N75,125 million and N31,044 million respectively). In line with the provision of the Fiscal Responsibility Act 2011, 20 percent of the net income of the bank will be credited to retained earnings, while the balance will be paid to the federal government of Nigeria,” the report reads.
Since 2005 when it started publishing details of its annual report on its website, CBN never failed to publish the report until 2016 when the regulator abruptly stopped the publication of the document — a situation which tends to contravene the law regulating its operations.
According to the CBN Act 2007, the apex bank is expected to publish its report within two months after the end of each financial year.
“The bank shall, within two months after the close of each financial year, transmit to the National Assembly and the President a copy of its annual accounts certified by the Auditor,” the Act reads in part.
“A report required to be submitted to the national assembly and the president shall be published by the bank in such a manner as the governor may direct.
“The board shall ensure that accounts submitted pursuant to this section shall, as soon as possible, be published in the Gazette.
“The bank shall, as soon as may be practicable after the last day of each month makeup end, publish a return of its assets and liabilities as at the close of business on that day, or if that day is a holiday, as at the close of business on the last preceding business day.”
Reacting to the development, professor of Capital market and finance, Uche Uwaleke commended the present management of the CBN for publishing the financial reports of the Bank after so many years, adding that the action will go a long way in boosting the confidence of investors in the Nigerian economy.
The erudite professor who stated this in a statement on Friday said the action has brought to the fore the true picture of the country’s external reserves being managed by the CBN.
According to him, it is now beyond speculation that much of the reserves are encumbered by Securities lending and derivatives contracts entered into by the CBN.
“Much as these contracts are legitimate, the resulting obligations from them put to question the justification for entering into these contracts in the first place and whether adequate safeguards were put in place at the time of entering into these contracts.
“Securities lending is the process of loaning securities to another party which effectively transfers ownership to the other party expected to provide collateral for them. In this instance both JP Morgan and Goldman Sachs were said to have provided cash in return.
“By implication, the current liquid external reserves of about 33 billion dollars does not reflect the true liquidity position of reserves as a significant proportion has been tied down by these contracts. Little wonder the CBN’s ability to intervene in the forex market has been hampered.
“Following this disclosure, the current volatility in the forex market may linger for quite sometime, except the reserves witness substantial accretion from crude oil sales proceeds, Uwaleke added.
