The
Central Bank of Nigeria (CBN) weekend released the 2013 annual report
that led to suspension of former governor, Sanusi Lamido Sanusi. The
Financial Reporting Council of Nigeria had raised issues with the
accounts, saying it needed some detailed explanation as required in the
International Financial Reporting Standards.
It was on the
basis of issues raised by the Council that the former CBN Governor was
suspended. However, the CBN said that it has formally released its
audited financial statements for 2013 and 2014 and has fully adopted the
International Financial Reporting Standards (IFRS) for the financial
statements.
The CBN annual report said the bank
made a total earnings of $0.29 billion (N44.41 billion), from the
external reserves in 2013 representing an increase of 7.1 per cent over
the level in 2012.
According to the CBN, in order to earn
additional income from the external asset management programme, the CBN
signed a Master Securities Lending Agreement with JP Morgan Chase to
participate in its securities lending programme.
The custodian
was allowed to lend the securities purchased by the fund managers to
eligible borrowers in accordance with the guidelines. It said that total
earnings from the securities lending operations from the inception of
the programme in December 2007, amounted to $54.93 million, of which
$1.36 million was realised in 2013, representing a decline of 41.8 per
cent, compared with $2.33 million earned in 2012.
The released
financial statements indicate that the net income of the bank for 2013
amounted to N209.6 billion while that of 2014 was N35.4 billion out of
which 80 per cent have since been remitted to the Federal Government of
Nigeria in accordance with the Fiscal Responsibility Act. The balance of
20 per cent was also transferred to the Reserves within the bank.
The
report said that the bank in 2013, recruited 771 personnel, consisting
of two executives, 427 senior and 342 junior staff. This was made up of
276 female and 495 male. The bank, however, lost the services of 27
staff through death; 15 through voluntary retirement; 72 through
mandatory retirement; and 10 through resignation. Furthermore, the
appointment of nine staff was terminated, while 27 were dismissed. The
staff strength stood at 6,594, compared with 5,983 in 2012.
The
report said: “Available data showed that total foreign exchange inflows
through the economy rose by 22.9 per cent to $146.27 billion in 2013. Of
this, inflows through the CBN and autonomous sources amounted to $41.07
billion and US$105.20 billion and accounted for 28.1 and 71.9 per cent,
respectively.
A disaggregation of the inflows through the
autonomous sources showed that invisibles accounted for $98.53 billion;
non-oil exports, $6.31 billion; and external account, $0.36billion. The
invisibles comprised over-the-counter purchases (OTC) and domiciliary
accounts which amounted to $62. 93billion (63.9per cent) and $35.60
billion (36.1 per cent), of the total, respectively.
“Aggregate
foreign exchange outflows through the economy rose by 17.9 per cent
above the level in 2012 to $43.64 billion. The development was
attributed to increased Dutch auction utilisation, national priority
projects and external debt service by 27.9, 4.3 and 2.3 per cent,
respectively. In addition, $1.00 billion was transferred to the Nigeria
Sovereign Investment Authority (NSIA) account during the year for
investment.
“Overall, a net inflow of $102.63billion was
recorded in 2013, compared with US$81.99 billion in the preceding year.
Foreign exchange inflows through the CBN fell by 12. 2 per cent to
$41.07 billion in 2013. The inflow from oil exports declined by 13.1 per
cent on a year-on-year basis, occasioned by oil theft and pipeline
vandalism in the Niger-Delta, which affected the oil production and
volume of crude oil exported.
“The non-oil component of the
inflow through the bank also declined by 3.3 per cent, compared with the
level in the preceding year. An analysis of the latter showed that
wDAS/rDAS purchases and interest earnings on reserves fell by 98.6 and
47.6 per cent respectively, from the levels in 2012. Other official
receipts rose by 29.0 per cent above the level in 2012 to US$2.97
billion, while receipts of $0.99 billion was realised from the issuance
of sovereign Eurobond.
In contrast, outflows of foreign exchange
through the bank rose by 20.0 per cent to $42.32billion in 2013 driven
by the 27.9, 4.3 and 2.3 per cent increases in outflow through wDAS/rDAS
utilisation, national priority projects, and external debt payments,
respectively. Further analysis showed that wDAS/rDAS and inter-bank
sales rose by 33.8 and 136.1per cent, to $25.52billion and
US$3.94billion, respectively, reflecting increased demand at the spot
segment.
The wDAS/rDAS-Forward, swaps, and BDC sales, however,
fell by 71.6, 51.1 and 4.3 per cent, respectively, from the levels in
2012. “Other official payments” were 22.2 per cent below the level in
2012 and amounted to US$5.27 billion. “The decline was driven largely by
the 38.9 and 34.1 per cent reduction in miscellaneous outflow and the
Nigerian National Petroleum Corporation/Joint Venture (NNPC/JVC) Cash
calls funding, respectively.
Under this category, the NNPC/JVC
cash calls accounted for 64.6 per cent, while miscellaneous outflow was
1.3 per cent of the total. Furthermore, payments to international
organisations and embassies, parastatals and for estacode rose by 40.9
and 11.2 per cent, and accounted for 12.3 and 21.8 per cent,
respectively, of the “Other Official Payments”. Drawings on L/Cs fell by
23.4 per cent and accounted for 1.0 per cent of total outflows through
the CBN.
The external debt service and out-payments for the
national priority projects, however, rose by 2.3 and 4.3 per cent and
accounted for 0.7 and 0.2 per cent, respectively, of total outflows
through the bank. Overall, a net outflow of $1.25 billion was recorded
through the bank in 2013, compared with a net inflow of $11.53 billion
in the preceding year.
2013 annual report said “Sectoral
utilisation of foreign exchange in 2013 rose by 28.8 per cent to $54.2
billion over the level in 2012. Visible trade imports, at $28.1 billion
or 51.8 per cent of the total, declined by 2.4 per cent, compared with
$28.8 billion in 2012. Out-payments on invisible trade, however, rose by
96.4 per cent to $26.1 billion or 48.2 per cent of the total, compared
with $13.3 billion in 2012”.
It further said: “Analysis of
visible trade imports showed that foreign exchange utilisation for the
agricultural, industrial and mineral sub-sectors grew by 23.1, 11.5 and
10.5 per cent to $0.3 billion, US$8.4 billion and US$0.4 billion,
respectively, from the levels in 2012. Manufactures, food products,
transport and oil sub-sectors, however, declined by 10.3, 7.4, 15.4 and
5.5 per cent to US$4.2 billion, $5.1 billion, $1.5 billion and US$8.2
billion, respectively.
Foreign exchange utilisation under
invisible imports was driven largely by financial sector services, which
accounted for $22.2 billion, representing an increase of 123.3 per cent
over the level in 2012. Out-payments for business, communication,
education and transport services rose by 22.2, 31.9, 14.9 and 15.8 per
cent to $1.3 billion, $0.5 billion, $0.3 billion and US$1.3 billion,
respectively, over the levels in the preceding year.
“Similarly,
distribution and other services grew by 13.9 and 11.6 per cent to $0.1
billion and $0.3 billion, respectively, from the levels in 2012.
Tourism, construction and engineering-related services, and health,
however, fell, by 73.4, 22.0 and 11.8 per cent, to $0.02 billion, $0.09
billion and $0.002 billion, respectively, from their levels.
According
to the CBN “The IFRS requirement implies that the financial statement
of the CBN be consolidated with those of investee entities, namely
Nigeria Export-Import Bank, Abuja Securities and Commodities Exchange,
Bank of Industry, Bank of Agriculture, Nigeria Inter-bank Settlement
System, National Economic Reconstruction Fund, Financial Markets Dealers
Quotation, African Finance Corporation and Agricultural Credit
Guarantee Fund.
“Thus, the bank now has full IFRS-compliant
financial statements for the years ended 31st December 2013 and 31st
December 2014, respectively. Hitherto, the bank’s financial statements
had been prepared under the Central Bank of Nigeria (CBN) framework.
Credit: Omoh Gabriel/Vanguard
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