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- The Central Bank of Nigeria was established by the CBN Act of 1958 and started operations in July 1959
- The bank is Nigeria’s apex bank and serves as a financial adviser to the federal government of Nigeria
- The bank is also in charge of monetary policies in Nigeria, including currency and regulation of the financial services sectors in Nigeria
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Central Bank of Nigeria is Nigeria’s apex bank and monetary authority. It was established by the CBN Act of 1958 and began operations on July 1, 1959.
The main job of the CBN is mostly regulation of the financial services sector in Nigeria, maintenance of the nation's external reserves, promoting monetary stability and a sound economic environment and acting as a banker of the last resort and financial adviser to the Nigerian government.
Source: Getty Images
After the end of colonial rule in Nigeria, the country desired to be proactive in developing the economy, especially after the civil war.
The CBN became involved in lending directly to consumers, contradicting its original purpose of working through commercial banks in consumer lending activities.
Policy implementation and criticism
The CBN's early functions were mainly to act as the government’s agency for controlling and supervising the banking sector, managing the balance of payments under the federal government's demands and streamlining monetary policy along with the needs of the federal budget.
Under Chukwuma Soludo
The CBN was instrumental in the growth and financial credibility of Nigerian commercial banks by ensuring that all the banks operating in Nigeria had enough capital bases.
It ensured that the banks’ customers did not bear losses alone in the event of a collapse. The policy led to the collapse of some commercial banks due to their inability to meet the required capital base of N25 billion.
The policy solidified the commercial banks in Nigeria and ensured that individuals and organisations without financial stability do not operate banks there.
Nigeria has one of Africa's most advanced financial services sectors, and most commercial banks operate in other African countries.
Changes under Sanusi Lamido Sanusi
In 2oo9, under the leadership of Sanusi, the CBN sacked the CEOs and executive directors of five commercial banks in Nigeria for mismanagement of loans and over-dependence on the CBN.
Sanusi was suspended by ex-president Goodluck Jonathan in 2014 due to allegations of financial recklessness.
The CBN also fired the entire First Bank of Nigeria board, which was in severe financial trouble.
Changes under Emefiele
Last year, the Emefiele-led CBN announced the suspension of foreign exchange sales to the Bureau de Change operators.
Due to the decision, all forex sales were to be done directly by the commercial banks.
In July 2021, Emefiele announced the launch of Nigeria’s and Africa’s first Central Bank Digital Currency (CBDC), the e-naira, on October 25.
Emefiele became the 11th CBN governor and its indigenous governor. He succeeded Sanusi Lamido Sanusi.
Olayemi Cardoso
President Bola Tinubu appointed the Emefiele successor after Emefiele was suspended.
The Nigerian government, under Cardoso, devalued the currency, which has plunged to over N1,500 per dollar.
Experts say the move has caused high inflation in the country, leading to the exit of multinationals, including PZ Cussons Nigeria, P&G, GSK, Sanofi and others, which cited the naira crash as the reason.
Central Bank governors to date
- Roy Pentlow Fenton - 1958 - 1963
- Aliyu Mai-Bornu - 1963 - 1967
- Clement Nyong Isong -1967-1975
- Adamu Ciroma - 1975-1977
- Ola Vincent - 1977-1982
- Abdulkadir Ahmed 1982 -1993
- Paul Agbai Oguma 1993-1999
- Joseph Sanusi 1999-2004
- Charles Chukwuma Soludo 2004 -2009
- Sanusi Lamido Sanusi -2009 - 2014
- Godwin Emefiele -2014 - 2024
- Olayemi Cardoso - 2024 to date
CBN speaks on the safety of Nigerian banks
Legit.ng previously reported that the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has assured that the country's banking sector continues to be secure, stable, and robust.
He made this assertion during the 297th Monetary Policy Committee (MPC) meeting, which was held on September 23 and 24.
During the two-day meeting, the MPC analysed recent economic and financial trends and evaluated its projections for the rest of the year.
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Source: Legit.ng
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