CBN Publishes Audited Financial Statements For The First Time Since 2018

The Central Bank of Nigeria (CBN) has unveiled its Consolidated Financial Statements spanning seven consecutive years. This disclosure marks a notable departure from the past, as the apex financial institution makes its financial records available for public scrutiny, a practice that had not been observed since 2015.

The Consolidated Financial Statements, made public by the CBN, encompass the fiscal periods of 2016 through 2022. This extensive window into the bank's financial health sheds light on its performance and evolution over these crucial years.

Within these revealed financials, the CBN has declared a noteworthy profit after tax of N103.8 billion in 2022, showcasing a substantial increase from the N75.13 billion reported in the previous year. Additionally, the CBN's financial obligations are outlined, including a combined debt of $7.5 billion to JP Morgan and Goldman Sachs by the end of December 2022.

Liabilities and Securities Lending

Among the liabilities acknowledged in the CBN's financial documents is a substantial $6.3 billion in foreign currency forwards. Notably, the bank has clarified that it owes Goldman Sachs $500 million and JP Morgan $7 billion under the category of securities lending. This arrangement involves the pledge of the CBN's foreign securities holdings in exchange for cash.

Securities lending plays a crucial role within the CBN's total external reserves, which stood at around N14.3 trillion or $29 billion based on the official exchange rate of N494/$1 in 2022. This strategic approach underscores the bank's commitment to maintaining a balanced and effective reserve structure.

The release of the financial statements through the CBN's official website signifies a newfound commitment to openness under the leadership of acting Governor Folashodun Shonubi. This contrasts with the period of suspended CBN Governor Mr. Godwin Emefiele, who had faced criticism for withholding these crucial financial disclosures. This practice was deemed a direct violation of the CBN Act.

Historical Context and Legal Mandate

Since 2005, the CBN has consistently published its annual reports on its official website, adhering to its practice until 2016 when the publication ceased. According to the CBN Act of 2007, the bank is legally obliged to release its annual report within two months following the conclusion of each financial year. This stipulation emphasizes the importance of timely and transparent reporting to uphold accountability.

Financial analysts underscore the significance of these disclosures, as they serve as indicators of the country's economic health, aiding investors and interested parties in comprehending the prevailing economic conditions. President Bola Tinubu has taken a proactive step to address potential concerns by appointing Jim Obazee as a Special Investigator to probe the activities of the CBN and related entities. This initiative aligns with the administration's anti-corruption agenda, further reinforcing the government's commitment to ensuring transparency and accountability within the nation's financial sector.

A Comprehensive Mandate for Investigation

In a letter dated July 28, President Tinubu formalized Obazee's appointment, empowering him to lead a comprehensive investigation into the operations of the CBN and its associated entities. This inquiry will involve a seasoned team of experts, cooperating closely with relevant security and anti-corruption agencies to deliver a thorough and insightful assessment of the situation.

As the nation takes significant steps towards greater financial transparency and accountability, the appointment of a Special Investigator signifies a resolute commitment to upholding the principles of good governance and combatting corruption within the financial realm.