The Central Bank of Nigeria (CBN) has revealed that it owes JP Morgan and Goldman Sachs a combined sum of $7.5 billion as of the financial year ended December 2022.
Also included as part of its liabilities is another $6.3 billion owned in foreign currency forwards.
This is contained in the audited financial statement of the apex bank, published on its website. The bank also reported a profit after tax of N103.8 billion in its most recent financial year.
The apex bank however stated it owes Goldman Sachs $500 million and JP Morgan $ 7 billion in what it classified as securities lending.
“The Group entered into a securities lending agreement with Goldman Sachs and J. P. Morgan and as part of the agreement, the Group pledged its holdings on foreign securities in return for cash. The cash received from Goldman Sachs is N0.23 trillion ($500 million), 2021: N0.22 trillion ($500 million), and JP Morgan N3.23 trillion ($7 billion), 2021: N3.05 trillion ($7 billion) is recognized in other foreign securities.”
The securities lending forms part of the CBN’s total external reserves of about N14.3 trillion or $29 billion using the official exchange rate of N494/$1 as of 2022.
However, the apex bank also owes another N3.15 trillion ($6.3 billion) in foreign currency forward which are forex obligations it needs to make to foreign investors.
A further analysis of the breakdown of the apex bank’s external reserves reveals it is made up of the following;
Time deposits and money placements – N4.6 trillion
Other foreign securities – N5.8 trillion
Current accounts with foreign Banks (GS and JPM) – N3.34 trillion
Domiciliary accounts _ 294.8 billion
Sundry currencies and travellers’ cheques – N199.8 billion
This totals a sum of about N14.4 trillion or $29 billion. Adding the N578.6 billion ($1.1 billion) held in Gold Bullion Reserves takes the grand total to about $30.1 billion. This is according to figures in its financial statements.
While the central bank suggests it had about $30.1 billion, backing out other obligations such as securities and lending and foreign currency forwards means it has just a net reserve of obligation to JP Morgan and Goldman Sachs means it has a net of just $17 billion in reserves.
The current status of the loans is not clear as the apex bank is yet to publish any interim financial statement in this regard. However, the CBN external reserve position published on its website as of December 2022 was $37 billion. It’s currently $33.9 billion.