The audited financial statement of the Central Bank of Nigeria (CBN) for the financial year ending December 2022 reveals that it owes a total of $7.5 billion to JP Morgan and Goldman Sachs.
Additionally, the CBN has $6.3 billion in liabilities in the form of foreign currency forwards. Despite these obligations, the apex bank reported a profit after tax of N103.8 billion in its most recent financial year.
Specifically, the CBN owes $500 million to Goldman Sachs and $7 billion to JP Morgan, which are classified as securities lending.
In return for cash, the CBN pledged its holdings of foreign securities. The cash received from Goldman Sachs and JP Morgan is recognized in other foreign securities in the amounts of N0.23 trillion ($500 million) and N3.23 trillion ($7 billion), respectively.
The CBN’s external reserves amount to about N14.3 trillion or $29 billion, using an exchange rate of N494/$1 as of 2022. In addition to the securities lending, the CBN owes N3.15 trillion ($6.3 billion) in foreign currency forward obligations to foreign investors.
Breaking down the CBN’s external reserves, the breakdown is as follows:
Time deposits and money placements: N4.6 trillion, Other foreign securities: N5.8 trillion, Current accounts with foreign banks (Goldman Sachs and JP Morgan): N3.34 trillion, Domiciliary accounts: N294.8 billion, Sundry currencies and travelers’ cheques: N199.8 billion
This totals about N14.4 trillion or $29 billion. Adding the N578.6 billion ($1.1 billion) held in Gold Bullion Reserves brings the grand total to about $30.1 billion, based on figures from the CBN’s financial statements.
However, after accounting for obligations such as securities lending and foreign currency forwards, the net reserve obligation to JP Morgan and Goldman Sachs is $17 billion. The current status of the loans is not clear, as the CBN has not published any interim financial statements. The CBN’s external reserve position published on its website as of December 2022 was $37 billion, which has since decreased to $33.9 billion.
