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Central Bank of Nigeria

From Wikipedia, the free encyclopedia

Central Bank of Nigeria
HeadquartersAbuja, FCT, Nigeria
(66 years ago)
Ownership100% state-owned[1]
GovernorOlayemi Cardoso
Central bank ofNigeria
CurrencyNigerian naira
NGN (ISO 4217)
Reserves28.28 billion USD[1]
Bank rate18.7% (July 2023)[2]

The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959.[3] The major regulatory objectives of the bank as stated in the CBN Act are to: maintain the external reserves of the country; promote monetary stability and a sound financial environment, and act as a banker of last resort and financial adviser to the federal government. The central bank's role as lender of last resort and adviser to the federal government has sometimes pushed it into murky political controversies. After the end of colonial rule, the desire of the government to become proactive in the development of the economy became visible, especially after the end of the Nigerian civil war, the bank followed the government's desire and took a determined effort to supplement any show shortfalls, credit allocations to the real sector. The bank became involved in lending directly to consumers, contravening its original intention to work through commercial banks in activities involving consumer lending.

However, the policy was an offspring of the indigenization policy at the time. Nevertheless, the government through the central bank has been actively involved in building the nation's money and equity centres, forming securities regulatory boards, and introducing treasury instruments into the capital market.[3] The bank has thirty-six branches each in the 36 states of the federation and the headquarters in FCT.[4]

CBN Library


The Library is a standard library at the Headquarters and all other branches, it has information resources like journals, magazines, books of various fields of study can be used and the library is open for students, researchers and staff.[5]

History of the CBN


Authorizing legislation


In 1948, an inquiry under the leadership of G.D Paton was established by the colonial administration to investigate banking practices in Nigeria.[6] Prior to the inquiry, the banking industry was largely uncontrolled.

The G.D. Paton report, an offshoot of the inquiry became the cornerstone of the first banking legislation in the country: the banking ordinance of 1952. The ordinance was designed to prevent non-viable banks from mushrooming and to ensure orderly commercial banking. The banking ordinance triggered rapid growth in the industry, and with growth also came disappointment. By 1958, a few banks had failed. To curtail further failures and to prepare for indigenous control, in 1958, a bill for the establishment of the Central Bank of Nigeria was presented to the House of Representatives of Nigeria. The Central Bank of Nigeria Act No. 24, 1958 was published as chapter 30 of the 1958 edition of the Laws of Nigeria and Lagos.[7] It was fully implemented on 1 July 1959, when the Central Bank of Nigeria came into full operation and remained the primary statute governing the CBN until its repeal by the Central Bank of Nigeria Act No.24, 1991.[7] In April 1960, the Bank issued its first treasury bills. In May 1961, the Bank launched the Lagos Bankers Clearing House, which provided licensed banks a framework in which to exchange and clear checks rapidly. By 1 July 1961, the Bank had completed issuing all denominations of new Nigerian notes and coins and redeemed all of the British West African pounds that were circulating in Nigeria.[8]



The Central Bank of Nigeria is known for the blue color of its office building at different branches of the country.

Policy implementation and criticism

CBN building in Minna, Niger state

The CBN's early functions were mainly to act as the government's agency for the control and supervision of the banking sector, to monitor the balance of payments according to the demands of the federal government and to tailor monetary policy along the demands of the federal budget. A key instrument of the bank was to initiate credit limit legislation for bank lending. The initiative was geared to make credit available to neglected national areas such as agriculture and manufacturing. By the end of 1979, most of the banks did not adhere to their credit limits and favoured a loose interpretation of CBN's guidelines.

The central bank did not effectively curtail the prevalence of short term loan maturities. Most loans given out by commercial banks were usually set within a year. The major policy to balance this distortion in the credit market was to create a new Bank of Commerce and industry, a universal bank. However, the new bank did not fulfill its mission. Another policy of the bank in concert with the intentions of the government was direct involvement in the affairs of the three major expatriate commercial banks in order to forestall any bias against indigenous borrowers and consumers. By 1976, the federal government had acquired 40% of equity in the three largest commercial banks. The bank's slow reaction to curtail inflation by financing huge deficits of the federal government has been one of the sore points in the history of the central bank. Coupled with its failure to control the burgeoning trade arrears in 1983, the country was left with huge trade debts totaling $6 billion.

Governors of the Central Bank of Nigeria


Governors of the Central Bank since independence:[9]

Governor Previous position Term start Term end
Roy Pentelow Fenton 24 July 1958 24 July 1963
Aliyu Mai-Bornu Deputy Governor, CBN 25 July 1963 22 June 1967
Clement Nyong Isong Advisor International Monetary Fund 15 August 1967 22 September 1975
Adamu Ciroma 24 September 1975 28 June 1977
Ola Vincent Deputy Governor, CBN 28 June 1977 28 June 1982
Abdulkadir Ahmed Deputy Governor, CBN 28 June 1982 30 September 1993
Paul Agbai Ogwuma CEO, Union Bank of Nigeria 1 October 1993 29 May 1999
Joseph Oladele Sanusi CEO First Bank of Nigeria 29 May 1999 29 May 2004
Charles Chukwuma Soludo Chief Executive, National Planning Commission 29 May 2004 29 May 2009
Sanusi Lamido Aminu Sanusi CEO, First Bank of Nigeria 3 June 2009 20 February 2014[10]
Sarah Alade (Acting) Deputy Governor, Central Bank of Nigeria 20 February 2014 3 June 2014
Godwin Emefiele Chief Executive Officer, Zenith Bank 3 June 2014 9 June 2023
Folashodun Adebisi Shonubi (Acting) Deputy Governor, Central Bank of Nigeria 9 June 2023 15 September 2023
Olayemi Cardoso Chairman Citi Bank Nigeria and Commissioner for Economic Planning and Budget of Lagos State 15 September 2023 Incumbent

Under Charles Chukwuma Soludo


The Central Bank was instrumental in the growth and financial credibility of Nigerian commercial banks by making sure that all the financial banks operating in the country had a capital base (required reserves). This helped to ensure that bank customers just did not bear losses alone, in the event of bank failures. However, this policy led to the failure of some Nigerian commercial banks; some banks could not meet the new capital base requirements, which was 25,000,000,000.00 Naira at the time. Those banks that could not meet the new capital base requirements had to fold up, while some that could not come up with the money on their own, had to merge with other banks in order to raise the money. This policy helped solidify the commercial banks of Nigeria and made it impossible for individuals or organizations without financial stability to operate a bank in the country. Today Nigeria has one of the most advanced financial sectors in Africa, with most of its commercial banks having branches in other countries.

The Central Bank is active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion. It is also one of the original 17 regulatory institutions to make specific national commitments to financial inclusion under the Maya Declaration[11] during the 2011 Global Policy Forum held in Mexico. The CBN has ensured that all banks in Nigeria have uniform year-ends. The various commercial banks include Access Bank Plc, Citibank Nigeria Plc, Diamond Bank Plc, First Bank of Nigeria Plc, Guaranty Trust Bank Plc, Zenith Bank plc, Wema Bank, Stanbic IBTC Bank, Fidelity Bank, United Bank for Africa etc.

Changes in the 21st century


In 2009, the CBN fired the CEOs and executive directors of 5 Nigerian banks (Afribank, FinBank Nigeria, Intercontinental Bank, Oceanic Bank and Union Bank of Nigeria) for mismanagement of loans and over-reliance on the CBN.[12] In 2014, the President Goodluck Jonathan suspended the governor of the CBN Sanusi Lamido Sanusi on grounds of financial recklessness.[13] In April 2021, the Central Bank of Nigeria fired the whole board of the First Bank of Nigeria which was in a «grave financial condition».[14]

In July 2021, CBN announced that it had ended the sales of foreign exchange (forex) to bureau de change operators.[15] Following the announcement, all forex sales were to go directly to commercial banks.[15] That same month the Bank’s governor, Godwin Emefiele, said that Nigeria would launch its own cryptocurrency, called “e-naira,” in October,[16] which is not a cryptocurrency per se but effectively build on the blockchain technology[17] and available through the mobile applications eNaira Speed Wallet and eNaira Speed Merchant Wallet.[18][19] At its launching by President Muhammadu Buhari on 25 October, the platform was joined by 33 banks and ₦500m worth of eNaira was minted.[20] The introduction of the eNaira came a few months after the government had banned all cryptocurrencies.[17]

In June 2023, the president of CBN, Godwin Emefilele was arrested by the Nigerian State Security Service[21] and removed from his position at the CBN following a previous arrest attempt in December 2022 for "financing terrorism, fraudulent activities, and economic crimes of national security dimension.” This was after claims that Emefiele was waging a war on cash under a directive from the International Monetary Fund and the World Economic Forum.[22]

On 14 June 2023, the Naira fell 23% in a day, to a rate of ₦600 to US$1, as the central bank abandoned its currency peg and allowed the naira to trade freely.[23]



The Senate of the Federal Republic of Nigeria confirmed the nomination of Dr Olayemi Cardoso as the 12th Governor of the Central Bank of Nigeria on 26th September 2023. [24][25]

Statutory Duties and Powers


The Central Bank of Nigeria (Establishment) Act 2007 affirms the establishment of a body known as the Central Bank of Nigeria. The act also states the fundamental objects of the bank, which include the sole power to issue notes and coins, maintain an external reserve for Nigeria, and generally supervise the entire banking system in Nigeria.[26]

The Banks and Other Financial Institutions Act, 2020, empowers the Governor of the CBN to issue a license to anyone wanting to start a banking business in Nigeria, with specific procedures. The act prohibits anyone from operating a banking business in Nigeria without such a license. Additionally, the BOFIA empowers the Governor of the CBN to issue regulations, guidelines and policies to banks, specialized banks, and other financial institutions in Nigeria.  And to appoint officers to supervise and examine these institutions according to the dictates of the governor. Also, Section 5 of the BOFIA empowers the CBN to revoke the license of any bank for stipulated reasons.[27][28]

See also



  1. ^ a b Weidner, Jan (2017). The Organisation and Structure of Central Banks (Thesis). Darmstadt: Universitäts- und Landesbibliothek Darmstadt.
  2. ^ "Nigeria central bank raises main lending rate by 25 basis points". Reuters. Retrieved 25 July 2023.
  3. ^ a b "History of CBN". cenbank.org. Central Bank of Nigeria. Archived from the original on 6 July 2016. Retrieved 25 September 2018.
  4. ^ "List of CBN Branches in Nigeria and their Locations". nigerianfinder.com. Retrieved 7 February 2022.
  5. ^ "Central Bank of Nigeria:: CBN Community - Other CBN Aid Programmes". www.cbn.gov.ng. Retrieved 19 December 2022.
  6. ^ "Cbn Exchange Rate : Check All Cbn Nigeria Exchange Rate Today 2019". Information. Retrieved 30 May 2020.
  7. ^ a b Mwalimu, Charles (2005). The Nigerian Legal System: Private law. Peter Lang. ISBN 978-0-8204-7126-6.
  8. ^ Nigeria Year Book 1962. Daily Times of Nigeria. 1962. p. 107.
  9. ^ "Past And Present Governors". Central Bank of Nigeria. Archived from the original on 14 February 2010. Retrieved 28 February 2010.
  10. ^ "Nigeria central bank head Lamido Sanusi ousted". bbc.com. BBC. Retrieved 25 September 2018.
  11. ^ Inclusion, Alliance for Financial. "Maya Declaration Urges Financial Inclusion for World's Unbanked Populations". www.prnewswire.com. Retrieved 24 August 2017.
  12. ^ CBN sacks 5 banks’ CEOs, appoints acting MD/CEOs, Vanguardngr.com, 14 August 2009
  13. ^ Suspended Nigeria central bank boss hits back, Aljazeera.com, 21 February 2014
  14. ^ Chijioke Ohuocha, Nigeria’s central bank sacks entire board of First Bank of Nigeria, Reuters.com, 30 April 2021
  15. ^ a b "CBN bans sales of forex to BDCs". 27 July 2021. Retrieved 2 August 2021.
  16. ^ "Nigeria to launch digital currency, "e-naira", in Oct - central bank". Reuters. 27 July 2021. Retrieved 30 August 2021.
  17. ^ a b Neil Munshi, Nigerians cautious over Africa’s first digital currency, Ft.com, 6 November 2021
  18. ^ Nigeria launched eNaira, a digital currency backed by its Central Bank, Africa-reports.com, 26 October 2021
  19. ^ Izabella Kaminska, The eNaira’s time has come, Ft.com, 2 November 2021
  20. ^ "CBN mints 500m eNaira as 33 banks join platform, to stabilize payment system". Fellow Press. 25 October 2021. Archived from the original on 26 May 2022. Retrieved 25 October 2021.
  21. ^ Adegboyega, Ayodeji (10 June 2023). "Suspended CBN Governor, Godwin Emefiele, arrested, detained". Premium Times Nigeria. Retrieved 14 June 2023.
  22. ^ "Central Bank of Nigeria's Governor Suspended and Arrested After Waging All-Out War on Cash". naked capitalism. 13 June 2023. Retrieved 14 June 2023.
  23. ^ "End to Nigeria currency peg causes biggest fall in naira's history". Financial Times. Retrieved 20 June 2023.
  24. ^ Oyeyemi, Fadehan (27 September 2023). "'I will shoot GDP to $1trn in 8 years' - New CBN Gov, Cardoso vows". Daily Post Nigeria. Retrieved 27 September 2023.
  25. ^ Isuwa, Sunday (26 September 2023). "JUST-IN: Senate Confirms Cardoso As CBN Gov". Retrieved 27 September 2023.
  26. ^ "Central Bank of Nigeria Act, 2007" (PDF). Central Bank of Nigeria. Archived (PDF) from the original on 17 February 2021. Retrieved 20 November 2021.
  27. ^ Folarin, Akorede (5 February 2021). "An Overview of the Banks and Other Financial Institutions Act 2020". Social Science Research Network.
  28. ^ "Bank and Other Financial Institutions Act, 2020" (PDF). Central Bank of Nigeria. Archived (PDF) from the original on 22 January 2021. Retrieved 20 November 2021.