In a significant revelation, the audited financial statements of the Central Bank of Nigeria (CBN), the first in a span of seven years, have brought to light a combined influx of $15 billion cash from JP Morgan and Goldman Sachs within a year.
This intriguing financial insight was unveiled in the CBN’s financial statements for the financial year concluded on December 31, 2022.
The financial statements underscore that the CBN Group, as part of its financial operations, engaged in a securities lending agreement with global financial giants Goldman Sachs and J. P. Morgan.
In exchange for cash, the Group pledged its holdings in foreign securities. Goldman Sachs contributed N.23 trillion ($500 million) in 2021, while JP Morgan contributed N3.23 trillion ($7 billion) in the same year. Additional N3.05 trillion ($7 billion) was attributed to other foreign securities, aggregating liabilities with both institutions to a substantial $15 billion.
These securities lending arrangements are integral components of the CBN’s overall external reserves, which, as of 2022, totaled about N14.3 trillion or $29 billion, utilizing an official exchange rate of N494/$1.
Taking a more detailed look at the breakdown of the apex bank’s external reserves:Time deposits and money placements amounted to N4.6 trillion.Other foreign securities represented N5.8 trillion.Current accounts held with foreign Banks (Goldman Sachs and JPM) summed up to N3.34 trillion.Domiciliary accounts contained N294.8 billion.
Additionally, the CBN’s financial landscape revealed overdraft balances and short-term advances, including temporary advances to the Federal Government, equating to N23.3 trillion, and financial accommodation to Banks, amounting to N56 billion.
The financial statement also highlighted the CBN’s involvement in supporting developmental activities.
The bank purchased N535 billion debenture stocks from the Bank of Industry (BOI) in 2010. This investment, executed through the BOI, aimed at funding interventions in various sectors including power projects and refinancing/structuring of Deposit Money Banks’ existing loan portfolios for Nigerian small and medium-scale enterprises and the manufacturing sector.
The 2022 financials demonstrated the CBN’s robust performance, revealing a profit of N65.63 billion, more than double its previous year’s figure of N31.04 billion.
The financial statements were endorsed by Ernst & Young (EY) and KPMG Professional Services, both esteemed chartered accountancy firms.
The CBN’s commitment to transparency and integrity came under scrutiny in recent years due to the delayed release of its financial statements.
However, with the recent disclosure, the apex bank seems determined to uphold its ethical values, ensure equality, and adhere to international best practices.
In a significant development, Jim Obazee, former CEO of the Financial Reporting Council of Nigeria, has been appointed by President Bola Tinubu to conduct an investigative probe into the CBN and related entities, further reinforcing the importance of accountability and transparency within the institution.
