The Central Bank of Nigeria recorded a significant decline of ₦4.145 trillion in net loans and receivables in 2024, driven primarily by a reduction in its overdraft exposure to the Federal Government and changes across other loan categories.
According to the apex bank’s audited financial statements, net loans and receivables at the bank level dropped from ₦16.122 trillion in 2023 to ₦11.977 trillion in 2024. At the group level, the figure declined from ₦15.091 trillion to ₦10.959 trillion, reflecting a ₦4.132 trillion drop.
The most substantial adjustment came from the overdraft extended to the Federal Government under the Ways and Means provision.
The Ways and Means provision in Nigeria refers to the CBN’s practice of extending temporary advances to the Federal Government to cover short-term funding gaps. Governed by Section 38 of the CBN Act, 2007, this facility allows the government to borrow up to five per cent of its previous year’s actual revenue.
However, this limit was exceeded under the previous administration, leading to concerns about fiscal discipline and monetary policy implications.
In response to the growing concerns over the excessive use of the Ways and Means facility, the National Assembly approved the securitisation of ₦22.7 trillion of these advances in 2023.
This move effectively converted the short-term overdrafts into long-term debt instruments, aiming to mitigate inflationary pressures and restore monetary stability.
Also, the Federal Government repaid a part of this obligation, with reports indicating that ₦7.3 trillion has been paid back so far. This repayment aligns with the government’s commitment to reducing reliance on central bank financing and enhancing fiscal responsibility.
This facility, which stood at ₦7.948 trillion in 2023, was scaled down to ₦3.268 trillion in 2024, a sharp reduction of ₦4.679 trillion or 58.89 per cent. The decline aligns with Governor Yemi Cardoso’s reform stance and a shift away from fiscal dominance, following years of criticism over the central bank’s role in deficit financing.
The PUNCH earlier reported that the CBN’s earnings from the Federal Government’s overdraft facility declined from ₦1.6 trillion in 2023 to ₦3.1 billion in 2024. Also notable was a major increase in the CBN’s Standing Lending Facility, which grew from ₦29.431 billion in 2023 to ₦386.904 billion in 2024.
The CBN’s SLF serves as a critical tool for managing short-term liquidity within the banking sector. It allows authorised financial institutions to borrow funds from the CBN to address temporary liquidity shortages, ensuring stability in the financial system.
Although relatively small within the total portfolio, the increase indicates renewed activity in the interbank lending space. Long-term loans also rose by ₦712.673 billion, from ₦2.009 trillion in 2023 to ₦2.722 trillion in 2024, suggesting sustained CBN participation in select financing programmes with extended maturities.
In contrast to intervention-based programmes that saw widespread contraction, certain legacy and operational exposures remained stable or expanded slightly. Notably, AMCON Notes rose from ₦3.902 trillion in 2023 to ₦4.136 trillion in 2024, an increase of ₦234.096 billion.
These notes remain a key part of the CBN’s financial system stabilisation efforts and are backed by a sinking fund arrangement. The “Other Loans” category, which includes legacy or miscellaneous lending not classified under specific programmes, declined marginally at the group level by ₦8.722 billion, from ₦539.377 billion to ₦530.655 billion.
At the bank level, however, the line item held steady at ₦116.187 billion. Staff loans grew from ₦58.521 billion to ₦65.644 billion at the group level and from ₦58.521 billion to ₦65.194 billion at the bank level, while Nigerian Treasury Bonds remained unchanged at ₦423 million.
The financial statement also revealed that Promissory Notes previously valued at ₦23.028 billion were completely cleared by 2024. Similarly, the NESI Stabilisation Strategy Limited Debenture, which held a balance of ₦802.918 billion in 2023, was reduced to zero in 2024.
According to The PUNCH, Cardoso, who assumed office in 2023, had announced a strategic departure from the previous administration’s interventionist finance model, arguing that such practices distorted monetary policy transmission and reduced private sector lending.
Speaking at a press briefing after the first Monetary Policy Committee meeting of 2024, Cardoso said, “The intervention has two dysfunctions. One, it takes a lot of time for something you do not have an expertise to do, and two, if not carefully handled, creates a lot of distortions in your economy through inflow of money supply.”
He added, “The interventions that took place in the recent past were estimated in excess of N10tn. I’m not talking about ways or means. What was the budget of the federal government of Nigeria? What was the budget of the largest states in Nigeria? Do the maths and it would tell you the extent of damage too much of what may appear to be good things can do to an economy.
“So, for me, it’s a major issue. A number of things will be naive to say. We’re not going to get directly involved in interventions; those that are out there need to be properly monitored to ensure they come back in.
“We have to ensure that we monitor them to ensure that they come back in, and we’re doing so. We are already doing that and with various degrees of success at some point in time, in the interest of transparency, those figures will be made public.
“The time when we have failed interventions is over. There is no wiggle room to take up interventions that have a great potential to fail and do not get down to the people who were intended to in the first place.”
The 2024 financial statement validates this policy pivot, with significant recoveries suggesting efforts by the apex bank to restore its focus on monetary stability and financial sector discipline.
While the CBN has halted new applications under its intervention schemes, repayments and recoveries remain active. The drawdown of these programmes has continued to generate debate, with stakeholders divided on their legacy.
Supporters maintain that the interventions shielded key sectors during periods of fiscal constraint, while critics argue that inadequate monitoring and weak recovery structures made the programmes vulnerable to abuse and unsustainable over the long term.