The Central Bank of Nigeria (CBN) is the central bank and money issuer of Nigeria. It was established in 1958 under the CBN Act and began formal operations on July 1, 1959.

The CBN Act lays down the main duties and objectives of the Central Bank of Nigeria - to maintain the country's foreign exchange reserves, promote currency stability and maintain financial order.

History

Established

In 1948, the colonial government, under the leadership of G. D Paton, established an investigation to investigate banking operations in Nigeria. Before the investigation, the banking industry was largely uncontrolled. The G.D. Paton Report was an offshoot of the investigation that became the cornerstone of the country's first banking legislation: the Banking Regulations of 1952. The regulations were designed to prevent non-viable banks from springing up and to ensure the orderly conduct of commercial banking operations. In 1958, a bill establishing the Central Bank of Nigeria was tabled in the Nigerian House of Representatives. The bill was fully implemented on July 1, 1959, and by July 1, 1961, the bank had completed the issuance of new Nigerian banknotes and coins in all denominations and redeemed all previous currencies of the West African Monetary Commission.

Policy Implementation and Criticism

The early functions of the CBN were primarily to act as an agency for government control and supervision of the banking sector, to monitor the balance of payments as required by the federal government, and to adjust monetary policy as required by the federal budget. The central bank's initial lack of financial capacity over the Ministry of Finance led to the deferral of major economic decisions to the Ministry of Finance. A key tool for banks was to initiate credit line legislation for bank loans. The initiative was designed to provide credit to neglected national sectors such as agriculture and manufacturing. By the end of 1979, most banks had failed to comply with their credit lines and favoured a lenient interpretation of the CBN's guidelines.

Central Bank of Nigeria Building

The Central Bank has not effectively restricted the universality of short-term loan terms. Most of the loans issued by commercial banks are usually disbursed within a year. The main policy to balance this distortion in the credit market was the creation of a new Industrial and Commercial Bank of China, a universal bank. However, the new bank did not fulfill its mission. Another policy of the bank in line with the government's intent was direct involvement in the affairs of the three major foreign commercial banks to prevent any prejudice against indigenous borrowers and consumers. By 1976, the federal government had acquired a 40% equity stake in the three major commercial banks. The bank's slow response to contain inflation by financing the federal government's huge deficits has been one of the sore points in central bank history. Coupled with the failure to rein in rapidly growing trade arrears in 1983, the country is saddled with huge trade debts totaling $6 billion.

Names of Past Governors

Dates of Appointment Roy Pentelow Fenton1958.7.24Aliyu Mai-Bornu1963.7.251967.6.22Clement Nyong Isong1967.8.151975.9.9.22Adamu Ciroma1975.9.246.28 Ola Vincent1977.6.28Abdulkadir Ahmed 1982.6.281993.8.30Paul Agbai Ogwuma1993.10.11999.5.29Joseph Oladele Sanus1999.5.29 2004.5 Charles Chukwuma Soludo 2004.5 2009.5 29 Sanusi Lamido Aminu Sanusi 2009.6 2014.2. 20Sarah A la de 2014.2. 20 2014.6. 3Sarah A la de 2014.6 -