CBN slashes FG loans by over N4tn in Major balance sheet shift

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CBN Slashes FG Loans by Over N4tn in Major Balance Sheet Shift

         CBN Headquarters, Abuja.


The Central Bank of Nigeria (CBN) significantly reduced its net loans and receivables by N4.145 trillion in 2024, largely due to a sharp cut in its overdraft exposure to the Federal Government and changes across other loan segments.

According to its 2024 audited financial statements, net loans and receivables at the bank level fell from N16.122 trillion in 2023 to N11.977 trillion. Group-level figures showed a similar drop from N15.091 trillion to N10.959 trillion, a N4.132 trillion decrease.

Major Reduction in Ways and Means Advances

The biggest change came from the reduction in Ways and Means advances—short-term overdrafts the CBN provides to the Federal Government. This facility was scaled down from N7.948 trillion in 2023 to N3.268 trillion in 2024, a 58.9% decline (N4.679 trillion). The reduction follows concerns about fiscal discipline and the inflationary impact of excessive central bank financing under previous administrations.

In 2023, the National Assembly approved the securitisation of N22.7 trillion of these advances, converting short-term debt into longer-term instruments. So far, N7.3 trillion has been repaid.

Drop in Earnings, Shift in Lending Activities

Earnings from the FG overdraft facility plummeted from N1.6 trillion in 2023 to just N3.1 billion in 2024. Meanwhile, the Standing Lending Facility (SLF)—used to manage short-term liquidity in the banking sector—surged from N29.43 billion to N386.9 billion, suggesting increased interbank borrowing.

Long-term loans increased by N712.7 billion, rising from N2.009 trillion to N2.722 trillion, while AMCON Notes went up by N234.1 billion to N4.136 trillion, underscoring sustained support for financial system stability.

Other categories saw mixed movements. “Other Loans” dropped slightly at the group level by N8.7 billion but remained stable at the bank level. Staff loans rose to N65.6 billion, and Nigerian Treasury Bonds held steady at N423 million. Promissory Notes worth N23.03 billion were fully cleared, and the NESI Stabilisation Strategy Debenture dropped from N802.9 billion to zero.

Gross Loans Decline Across the Board

Group-level gross loans shrank from N16.391 trillion in 2023 to N12.767 trillion in 2024, while bank-level loans dropped by N3.645 trillion to N13.778 trillion. This contraction reflects a broad scale-down in loan exposures.

Expected Credit Loss allowances rose from N1.3 trillion to N1.8 trillion, indicating stricter risk management.

Recovery from Intervention Loans

CBN recovered N253 billion in 2024 from its intervention programmes, reflecting Governor Olayemi Cardoso’s reform to phase out the Bank’s development finance role. Intervention loans at the bank level dropped from N3.336 trillion to N3.083 trillion, while group-level loans declined from N1.883 trillion to N1.658 trillion.

Key recoveries include:

  • Anchor Borrowers’ Programme: N112.9 billion recovered; group-level balance now N311.9 billion.
  • Commercial Agricultural Credit Scheme: N43.3 billion recovered; balance at N58.5 billion.
  • Real Sector Support Facility: N37.5 billion recovered; balance at N60.7 billion.
  • BOI Debenture: Reduced by N9.9 billion to N52.1 billion.
  • Export Development Facility: Minor drop of N802 million to N139.6 billion.
  • Non-Oil Export Facility: Recovered N5.9 billion, down to N8.1 billion.
  • Accelerated Agricultural Development Scheme: Fell by N3.4 billion to N990 million.

Other programmes such as the NIRSAL Lending Debenture, NBET Payment Assurance Facility, and Nigerian Mortgage Refinance showed modest changes. The Nigerian Youth Investment Fund saw a slight increase, while some balances, like Advances to the Federal Mortgage Bank, remained unchanged.

Conclusion

The CBN’s 2024 financials reflect a decisive pivot from fiscal dominance and development finance toward tighter monetary control and balance sheet consolidation. These changes align with Governor Cardoso’s broader reform agenda to restore the Bank’s credibility and monetary policy effectiveness.


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