Nigeria: CBN Releases Seven Years of Financial Statements Amid Investigation

The Central Bank of Nigeria (CBN) has taken a significant step by releasing its Consolidated Financial Statements for the past seven years, marking the first time since 2015 that the apex bank has made its financial records available for public scrutiny.

The Consolidated Financial Statements cover the financial periods of 2016, 2017, 2018, 2019, 2020, 2021, and 2022. Notably, the CBN reported a profit after tax of N103.8 billion in 2022, representing an increase from the N75.13 billion reported in the previous year.

In its financial dealings, the CBN has financial obligations to both JP Morgan and Goldman Sachs, with a combined debt of $7.5 billion by the end of the financial year in December 2022. This also includes an additional liability of $6.3 billion in foreign currency forwards.

Part of these financial arrangements involves Goldman Sachs being owed $500 million and JP Morgan owed $7 billion, categorized under securities lending. The 2022 financial statement detailed, “The Group entered into a securities lending agreement with Goldman Sachs and J. P. Morgan and as part of the agreement, the Group pledged its holdings on foreign securities in return for cash.”

While the concept of securities lending contributes to the CBN’s total external reserves of approximately N14.3 trillion or $29 billion, the bank also carries an outstanding foreign currency forward liability of N3.15 trillion ($6.3 billion). These represent forex obligations that the bank is committed to fulfilling for foreign investors.

The release of the financial statements on the CBN’s official website signifies the bank’s willingness, under the leadership of acting Governor Folashodun Shonubi, to subject its financial records to public scrutiny. This move stands in contrast to the actions of the suspended CBN Governor, Mr. Godwin Emefiele, who was criticized for not disclosing the financial statements to the public, an action deemed a violation of the CBN Act.

The CBN Act 2007 stipulates that the central bank is required to publish its annual accounts, certified by the Auditor, within two months after the end of each financial year. This act also mandates the publication of the bank’s report in a manner directed by the Governor and ensures the prompt publishing of accounts in the Gazette.

Analysts have expressed concerns that the failure to publish these financial reports could convey incorrect signals to investors and individuals interested in gaining insights into the country’s economic status.

In a significant development, President Bola Tinubu has appointed Jim Obazee as a Special Investigator to examine the activities of the CBN and related entities. This decision aligns with the principles laid out in Section 15(5) of the Nigerian constitution, representing the administration’s commitment to combat corruption.

Obazee’s appointment, effective immediately, charges him with investigating the CBN and associated entities. He is expected to collaborate with competent teams and relevant security and anti-corruption agencies to fulfill his assignment. The President’s letter indicates that the comprehensive terms of Obazee’s role will be communicated to him in due course.