Understand that most people are very unhappy, including myself, not because of any sign of bankruptcy, the issue was borrowing $billions from US banks, and securing/collateralizing the loans with the national foreign reserves or other asset classes, without informing the Nigerian people and the National Assembly.
Prof. Ndubuisi Ekekwe
By Abdallah el-Kurebe
ASHENEWS reports that the Chairman of Tekedia Capital, Professor Ndubuisi Ekekwe has faulted the Central Bank of Nigeria (CBN) for collaterising loans with foreign reserves.
The Lead faculty of Tekedia Institute on his X handle @ndekekwe on Sunday, also described as misinformation and fake news, reports that the apex bank is bankrupt.
According to Ekekwe, the apex bank was not bankrupt because its total assets (Group) stands at N57.99 trillion; total liabilities are N56.34 trillion, and had a decent total equity of N1.604 trillion as at December, 2022.
He noted however that the rate of growth in the liabilities was not prudent.
The big issue, Prof. Ekekwe lamented, was the borrowing of “$billions from US banks, and securing/collateralizing the loans with the national foreign reserves or other asset classes, without informing the Nigerian people and the National Assembly.”
Read his tweet below:
I think Nigeria needs to find a solution to the level of misinformation we have online these days. I have been inundated with many questions on if the Central Bank of Nigeria (CBN) is bankrupt or going bankrupt. Please there is nothing like that. The Total Assets of CBN (Group) stands at ~N57.99 trillion while Total Liabilities are ~N56.34 trillion, giving a decent Total Equity of ~N1.604 trillion, as at December 31 2022. By accounting standard (at least to Intermediate Level of ICAN), this is not a state of bankruptcy.
That said, the rate of growth in the liabilities was not prudent, and Nigeria has to cut that down. Instead of bankruptcy, the bank actually recorded a profit of N65.63 billion in 2022; in 2021, it was N31.04 billion. Relatively, that is nothing, but that is not a sign towards bankruptcy.
Understand that most people are very unhappy, including myself, not because of any sign of bankruptcy, the issue was borrowing $billions from US banks, and securing/collateralizing the loans with the national foreign reserves or other asset classes, without informing the Nigerian people and the National Assembly.
That non-disclosure blew many models wide, since the funds you think are there have already been spent, via backdoor. I wrote that I was disappointed that Buhari allowed such to happen under his watch. But that observation was not on the financial position of the bank, rather, the lack of transparency in its management. CBN did what if any Nigerian bank had done and “covered it”, that bank would be in trouble with the apex bank.
Conclusion: The apex bank is “strong” but ought to be stronger.
