The Central Bank of Nigeria (CBN) has disclosed a sharp rise in its personnel expenses for the year 2024, spending a total of N306.63 billion on staff-related costs. This amount marks a significant increase of over 700 per cent compared to the N37.7 billion spent in 2023. A large portion of this increase was attributed to the bank’s Early Exit Programme (EEP), which saw over 1,000 employees voluntarily exit the bank in exchange for financial incentives.
Breakdown of Personnel Costs
- Staff Allowances: The CBN spent N191.95 billion on staff allowances, reflecting a steady rise in recurrent spending.
- Wages and Salaries: The amount allocated for wages and salaries for CBN employees reached N55.62 billion, up from N47 billion in 2023.
- Severance and Early Exit Programme: The N306.63 billion total also includes severance payments made to employees who opted for the bank’s Early Exit Programme. This voluntary scheme provided employees with financial incentives to leave the bank earlier than planned.
Early Exit Programme (EEP)
The Early Exit Programme was introduced as part of an internal restructuring effort, which was part of broader changes under CBN Governor Olayemi Cardoso. In 2024, over 1,000 employees opted for the early exit, following a previous wave of layoffs and restructuring, where 317 staff were sacked, and around 1,500 employees were affected. The severance package for the early exits was reportedly worth over N50 billion.
Under the EEP, eligible employees received financial incentives based on their rank, with senior supervisors to deputy managers being offered compensation for up to 60 months of their gross annual emoluments.
Rising Personnel Expenses
The bank’s financial statement revealed that its personnel expenses accounted for over 50 per cent of its operating costs for the year, representing a 106.1 per cent increase over the previous year. The total N306.63 billion spent on personnel costs is significantly higher than the N295.37 billion spent in 2023.
Key figures from the financial report included:
- Defined Benefit Plan Expenses: Increased by 49 per cent to N36.5 billion.
- Pension Contributions: Slightly up from N17.3 billion to N17.7 billion.
Other Operating Expenses
Aside from personnel-related costs, the CBN’s total operating expenses also included:
- Administrative Expenses: N152.74 billion.
- Banking Sector Resolution Sinking Funds: N50 billion.
- Intervention Activities: N8.67 billion.
- Cost of Sales: N53.95 billion.
Other operational costs included:
- Repairs and Maintenance: N21.53 billion.
- Bank Charges: N1.75 billion.
- Professional Fees: N7.14 billion.
- Audit Fees: N1.01 billion.
- Directors’ Related Expenses: N2.23 billion.
- Donations: N392 million.
- OTC FX Futures Transaction Fees: N12.69 billion.
- Technical Assistance: N70 million.
- Loss on Sale of Property, Plant, and Equipment: N493 million.
The significant increase in personnel expenses, largely driven by the Early Exit Programme and other restructuring efforts, reflects the CBN’s ongoing efforts to streamline its operations and reduce costs. However, the higher costs also underline the financial burden of such restructuring processes. The Early Exit Programme, in particular, was a key factor in the spike in expenses, which has seen a notable shift in the bank’s operational and financial structure.
