Document Type

Annual Report

Publication Title

Central Bank of Nigeria Annual Report


The Central Bank of Nigeria (CBN)'s 2008 report evaluates macroeconomic policies and outcomes, focusing on corporate operations and the economy's performance against domestic and external economic and financial developments. The CBN's monetary policy stance and banking and financial measures were deployed to ensure price stability and financial sector soundness. Despite the global economic downturn, the financial system remained relatively stable and overall macroeconomic performance was satisfactory. The formal financial system at end-December 2008 comprised the CBN, the Nigeria Deposit Insurance Corporation, the Securities and Exchange Commission, the National Insurance Commission, the National Pension Commission, and various banks. The banking sector was sound, with an average Capital Adequacy Ratio consistently exceeding the stipulated minimum of 10.0 per cent. However, the bank defaulted on its minimum liquidity ratio of 30.0 per cent. The stock of external reserves increased by 3.3% above the level at end-December 2007 to US$53.0 billion in 2008, supporting 16.6 months of imports. The audited financial statement showed gross income was 0.7% lower than the preceding year, reflecting the decline in interest income from external sources. Interest expenses increased significantly due to the higher cost of monetary operations. The total assets of the CBN stood at N8.8 trillion at end-December 2008, increasing 14.7% compared to the previous year. The share capital remained at N5.0 billion, while the General reserve stood at N60.9 billion. The CBN continued to enhance its enterprise applications through various IT initiatives, including Oracle ERP, Temenos T24, electronic Financial Analysis and Surveillance System (e-FASS), and Central Bank Inter-bank Fund Transfer System (CIFTS). The International Economic Report for 2008 revealed a global output decline of 3.9% in 2008, compared to 5.2% in 2007. This decline was primarily due to the recession in advanced countries, including the US and Japan, as well as rising food and energy prices. Emerging Asia also experienced a downturn, while the Commonwealth of Independent States (CIS) also experienced a decline in growth prospects. The Group of Twenty-Four developing countries (G-24) called for a comprehensive response to mitigate financial strains and restore confidence in the financial market. The World Bank Group intensified activities to foster growth, eliminate poverty, and ensure inclusive and sustainable development, increasing financial commitments in the form of loans, grants, equity investments, and guarantees. Nigeria and China signed strategic partnership agreements on cultural and educational exchanges, while the Nigeria-Spain meeting agreed to expand Spanish investment in Nigeria and foster greater partnership in banking, finance, and energy. The Nigeria-South Africa Bi-National Commission expanded the scope of the Memorandum of Understanding (MoU) on economic cooperation to include consumer protection and cooperation on product standardization. The West African Monetary Zone (WAMZ) approved the statutes of the West African Financial and Supervisory Agency (WAFSA) payments system and the Single Economic Space and Prosperity Agreement (SESPA), resulting in an accumulated savings of $20,341.2 million by the three tiers of government in 2008. The real Gross Domestic Product (GDP) grew by 6.4%, mainly driven by sound monetary and fiscal policies and favourable weather.

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