By Ademola Bakare
The Central Bank of Nigeria {CBN} in 2024 implemented some key reform initiatives aimed at stabilizing the economy, and promoting growth. The year in review was indeed productive for the Bank.
It embarked on various measures to ensure the stability of the financial sector, among which are: the recapitalization of the banks, setting new capital threshold for the banks to enhance their resilience, stability, and merger and acquisition.
In its quest for efficiency and transparency, it unveiled foreign exchange reforms – electronic foreign exchange matching system {EFEMS}, Retail Dutch Auction {rDAS}, and price transparency.
However, the elephant in the room, inflation, is being efficiently managed with potent monetary tool.
The Bank has also ensured that all foreign exchange inflows are returned to the Bank, thus improving commendably the foreign reserves, currently standing at $42billion. A visible paradigm shifts in recent times.
Not surprised however when the Bank posted an impressive financial statement of its 2024 activities. The report coming on the heels of a successful outing at the just concluded 2025 IMF/World Bank annual Springs meetings, said “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”.
The Central Bank of Nigeria {CBN} posted a surplus of N165 billion in the year under review from a deficit position of ₦1.3trn in 2023.
True to its posture of transparency and accountability, the CBN laying bare its books said, the 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 CBN under Olayemi Cardoso has not hidden its commitment to strict orthodox central banking, the outcome of which reflects commitment to economic stability, sound policy implementation, and strategic financial management, highlighting improvements in foreign reserves, asset quality, cost efficiency and overall bottom-line improvement.
Dissecting the report further, it also highlighted CBN’s effort at ensuring a transparent financial market that operates on a ‘willing buyer and willing seller’ basis.
Largely, the 2024 financial performance attests to global appreciation and acknowledgement of the financial sector reforms of the Bank.
The external reserves it said recorded an increase from $36.6bn in 2023 to $38.8bn in 2024. This is largely attributable to improvement in accretion to external reserves from portfolio investors, diaspora remittances and Federal Government receipts from improved confidence in the economy.
This clearly reflects the CBN’s commitment to external sector stability to ensure Nigeria is better positioned to meet its international obligations, stabilize the Naira, and boost macroeconomic confidence.
Improved Bottom-line Performance
The bottom-line improved from a deficit position of ₦1.3trn in 2023 to a surplus of ₦165bn in 2024. This turnaround is noted to be a direct consequence of effective containment of expenditure, gains on investments made by the Bank, and increased income from foreign exchange transactions
Reduction in Loans and Receivables
The financial statements also showed a notable reduction in loans and receivables from ₦16.1trn to ₦11.9trn. This is primarily attributed to significant recoveries from earlier intervention lending programs by the Bank. A deliberate policy shift by Olayemi Cardoso to move away from quasi-fiscal intervention lending and monetary financing through ways and means.
This new posture of the Bank is allowing market mechanisms to drive credit allocation and financial sector development.
Other Operating Expenses
The report states further that, operating expenses in 2024 were well-managed and optimized, which reflected a cost-conscious culture. This, it continued, 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).
As stipulated in the Financial Reporting Council {FRC)} regulatory requirement on ICFR, the Central Bank of Nigeria, carried out an assessment of its internal controls which was further certified effective by the joint external audit team. As evidence 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.
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Although, the 2024 financial results reflect operational improvements, some expenditure lines posed challenges. It listed as thus: Increased Liquidity Management Expenses. One of the notable upticks in the Bank’s expenditures in 2024 is linked to liquidity management operations which cost rose to ₦4.5trn from ₦1.5trn in 2023. This increase it said was in tandem with the tightening monetary policy stance adopted to combat inflationary pressures throughout the year. In furtherance of that objective, it noted 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 the CBN is carrying out on behalf of the Federation. A contradistinction in some jurisdictions where the cost is borne by the government.
Loss on Settled Derivative Contracts: A Strategic Move to Reduce FX Liabilities
The financial statements also acknowledged an increase in loss on settled derivative contracts during the year from ₦6.3trn in 2023 to ₦13.9trn in 2024. This development, it noted, is a direct consequence of the high volume of derivative contracts settled by the CBN in 2024. This, according to the Bank, are legacy transactions which the current management inherited on assumption of office. This task was undertaken as part of management’s broader strategy to reduce outstanding foreign exchange liabilities, thus lowering its FX exposure, thereby boosting net foreign reserves, and improving Nigeria’s external buffer and investor confidence. This, ultimately restored credibility to Nigeria’s forward markets and addressed legacy obligations transparently.
Conclusion
Overall, the CBN’s reforms and policies have set the stage for a more stable, and sustainable financial ecology in Nigeria. The improved performance of the apex bank in 2024 is not a coincidence, but a product of deliberate, and strategic management prudence. The Bank’s leadership has reinforced governance and accountability, instilled operational discipline, and pursued a balanced monetary policy stance, ensuring price and financial system stability.
These reforms, globally acknowledged, 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.
*Ademola Bakare, a Public Analyst writes from Abuja.
