CBN flirts with insolvency, spends 97% of assets on liabilities
For every N100 asset of the Central Bank of Nigeria (CBN), N97 has been used to pay total liabilities, a pointer to how the apex bank fiscal crisis has moved from bad to worse.
More than anything, the rapid growth in the CBN’s bailout for the Federal Government since 2014 has exposes how the latter’s financial challenges have worsened in 2019.
Of the total assets of N57.9 trillion, CBN incurred total liabilities of N56.3 trillion in 2022, implying that the apex bank spent 97 percent of its total assets paying liabilities.
“The CBN is basically a stone throw from being technical solvent,” Kelvin Atafiri, managing partner at Cavazanni Capital Limited said.
Technical insolvency means when the value of a company’s liabilities rises at a faster rate than that of its assets due to increased debts or borrowings.
Further findings showed the CBN recorded total assets of N52 trillion compared to a total liability of N52 trillion in 2021.
In 2020, the apex bank recorded total assets of N45.8 trillion compared to total liabilities of N44.7 trillion.
The CBN also posted a total asset of N38.2 trillion compared to N37 trillion in 2019.
