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History of Central Bank of Nigeria :Function and List of CBN Governors since 1958

The Central Bank of Nigeria (CBN) is the apex monetary authority and the central bank of Nigeria. It was established on July 1, 1959, by the Central Bank of Nigeria Act, with the primary objective of promoting monetary stability, ensuring a sound financial system, and fostering economic development in Nigeria.

The history of the Central Bank of Nigeria can be traced back to the colonial era when the West African Currency Board (WACB) was responsible for issuing and managing the currency in Nigeria and other West African countries. However, as Nigeria moved towards independence, there was a need for a more localized and independent central bank.

When the CBN was established, it took over the functions of the WACB and became responsible for issuing the Nigerian currency, maintaining price stability, and managing the country’s external reserves. Over the years, the CBN’s functions and responsibilities have expanded to include various monetary and financial sector activities.

Also read: The history and origin of banking in Nigeria

Central Bank Act, 1958

The Central Bank Act, 1958 (as amended) and the Banking Decree 1969 (as amended) constituted the legal framework within which the CBN operates and regulates banks. The wide range of economic liberalization and deregulation measures following the adoption, in 1986, of a Structural Adjustment Programme (SAP) resulted in the emergence of more banks and other financial intermediaries.

The Banks and Other Financial Institutions (BOFI) Decrees 24 and 25 of 1991, which repealed the Banking Decree 1969 and all its amendments, were, therefore, enacted to strengthen and extend the powers of CBN to cover the new institutions in order to enhance the effectiveness of monetary policy, regulation and supervision of banks as well as non-banking financial institutions.

Unfortunately in 1997, the Federal Government of Nigeria enacted the CBN (Amendment Decree No. 3 and BOFI (Amended)] Decree No. 4 in 1997 to remove completely the limited autonomy which the Bank enjoyed since 1991.

The 1997 amendments

The 1997 amendments brought the CBN back under the supervision of the Ministry of Finance. The Decree made CBN directly responsible to the Minister of Finance with respect to the supervision and control of bank and other financial institutions, while extending the supervisory role of the bank to other specialised Banks and Financial Institutions.

The amendment placed enormous powers on the Ministry of Finance while leaving the CBN with a subjugated role in the monitoring of the financial institutions with little room for the Bank to exercise discretionary powers.

The 1998   amendments

The CBN (Amendment) Decree No. 37 of 1998 which repealed the CBN (Amended) Decree No. 3 of 1997. The Decree provided a measure of operational autonomy for the CBN to carry out its traditional functions and enhances its versatility.

You can also read: The Origin and History of Banking- Evolution of Bank in the world

The CBN Act, 2007

The current legal framework within which the CBN operates is the CBN Act of 2007 which repealed the CBN Act of 1991 and all its amendments. The Act provides that the CBN shall be a fully autonomous body in the discharge of its functions under the Act and the Banks and Other Financial Institutions Act with the objective of promoting stability and continuity in economic management.

In line with this, the Act widened the objects of the CBN to include ensuring monetary and price stability as well as rendering economic advice to the Federal Government.

The BOFI (Amendment) Decree, 1998

Furthermore, the regulatory powers of the CBN were strengthened by the Banks and other Financial Institutions (Amendment) Decree No. 38 of 1998 which repealed BOFI (Amendments) Decree No. 4 of 1997.

Through the amendments, the CBN may vary or revoke any condition subject to which a license was granted or may impose fresh or additional condition to the granting of a license to transact banking business in the country.

By the Decree, the CBN’s powers on banks, specifically those relating to withdrawal of licenses of distressed banks and appointment of liquidators of these banks, including the NDIC was restored.

The 1999 amendment
The BOFI (Amendment) Decree No. 40 of 1999 makes the provisions relating to failing banks applicable to other financial institution. It also empowers the Governor of the CBN to remove any manager or officer of a failing bank or other financial institution.

The main functions of the CBN include:

1. Monetary Policy: The CBN formulates and implements monetary policies to achieve price stability and promote sustainable economic growth. This involves controlling inflation, managing interest rates, and regulating the money supply.2. Currency Issuance and Management: The CBN is responsible for issuing and managing the Nigerian currency, the Naira, and ensuring its integrity and stability. It also works to combat counterfeiting and promote the efficient circulation of currency.

3. Banking Supervision and Regulation: The CBN acts as the regulator and supervisor of banks and other financial institutions in Nigeria. It sets prudential regulations, conducts regular inspections, and works to maintain the stability and soundness of the financial system.

4. Developmental Functions: The CBN plays a crucial role in promoting economic development and financial inclusion in Nigeria. It provides development finance to priority sectors of the economy through various intervention programs and initiatives.

5. Foreign Exchange Management: The CBN manages Nigeria’s external reserves and oversees the foreign exchange market. It formulates policies to stabilize the exchange rate, manages the country’s foreign exchange reserves, and controls the flow of foreign exchange.

6. Payment Systems Oversight: The CBN regulates and supervises payment systems in Nigeria, ensuring the efficiency, safety, and integrity of payment transactions. It promotes electronic payment platforms and initiatives to foster a cashless society.

You may also like: History and Origin of United States Central Bank-Federal Reserve Bank

Statement of CBN Core Mandate

The mandate of the Central Bank of Nigeria (CBN) is derived from the 1958 Act of Parliament, as amended in 1991, 1993,1997,1998,1999 and 2007.

The CBN Act of 2007 of the Federal Republic of Nigeria charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government.

The objects of the CBN are as follows:

  1. ensure monetary and price stability;
  2. issue legal tender currency in Nigeria;
  3. maintain external reserves to safeguard the international value of the legal tender currency;
  4. promote a sound financial system in Nigeria; and
  5. act as Banker and provide economic and financial advice to the Federal Government

Full list of Central bank of Nigeria CBN Governor  since 1958

1. Roy Pentelow Fenton (July 24, 1958 – July 24, 1963)

2. Aliyu Mai-Bornu (July 25, 1963 – June 22, 1967)

3. Clement Nyong Isong (August 15, 1967 – September 22, 1975)

4. Adamu Ciroma (September 24, 1975 – June 28, 1977)

5. Ola Vincent (June 28, 1977 – June 28, 1982)

6. Abdulkadir Ahmed (June 28, 1982 – September 30, 1993)

7. Paul Agbai Ogwuma (October 1, 1993 – May 29, 1999)

8. Joseph Oladele Sanusi (May 29, 1999 – May 29, 2004)

9. Charles Chukwuma Soludo (May 29, 2004 – May 29, 2009)

10. Sanusi Lamido Aminu Sanusi (June 3, 2009 – February 20, 2014)

11. Sarah Alade (Acting) (February 20, 2014 – June 3, 2014)

12. Godwin Emefiele (June 3, 2014 – June 9, 2023)

13. Folashodun Adebisi Shonubi (Acting) (June 9, 2023 – September 26)

14. Olayemi Cardoso (September 26 – Date)

The Central Bank of Nigeria has played a significant role in the Nigerian economy and has been instrumental in maintaining monetary stability, fostering financial sector development, and promoting economic growth. It operates autonomously but is accountable to the Nigerian government and the National Assembly

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