AKINWALE ABOLUWADE
The Central Bank of Nigeria (CBN) has reduced its net loans and receivables by N4.145 trillion in 2024, largely due to a sharp reduction in overdraft financing to the Federal Government and adjustments across other loan categories.
According to the apex bank’s audited financial statements, net loans and receivables at the bank level fell from N16.122 trillion in 2023 to N11.977 trillion in 2024. At the group level, the figure declined from N15.091 trillion to N10.959 trillion — a drop of N4.132 trillion.
The most notable decline came from the overdrafts issued to the Federal Government through the Ways and Means provision. This facility, governed by Section 38 of the CBN Act, 2007, allows the central bank to provide temporary advances to the government to bridge short-term funding gaps, capped at 5 per cent of the previous year’s actual revenue.
Under the previous administration, however, this limit was exceeded, raising concerns about fiscal discipline and its impact on monetary policy.
In 2023, the National Assembly approved the securitisation of N22.7 trillion in outstanding Ways and Means advances — converting the short-term overdrafts into long-term debt instruments to curb inflation and restore monetary stability.
As part of this effort, the Federal Government has repaid N7.3 trillion of the securitised debt, reinforcing its pledge to reduce dependence on central bank financing and improve fiscal responsibility.
Specifically, the CBN’s exposure through Ways and Means fell from N7.948 trillion in 2023 to N3.268 trillion in 2024 — a 58.89 per cent reduction amounting to N4.679 trillion.
The decline reflects Governor Yemi Cardoso’s reform-driven agenda and a strategic shift away from years of fiscal dominance, which had drawn widespread criticism.
