Every country recognized internationally as a sovereign state has a central bank.
The central bank of a country is an independent authority that directs and controls the country’s monetary policy, provide financial services and regulates the various banks within its jurisdiction.
They are usually saddled with the responsibility of maintaining stability of the nation’s currency, prevent inflation and keep a low unemployment index. The Central Bank of Nigeria also has same mandate.
BRIEF HISTORY OF THE CENTRAL BANK OF NIGERIA:
After the G. D Paton led inquiry into banking activities was reported and examined, an Ordnance was enacted in 1952. The ordinance was created to ensure smooth commercial banking activities and restrict nonviable banks from mushrooming or proliferating.
Despite the fast growth the ordinance triggered in the industry, by 1958, a good number of the banks failed. It was in the process to reduce further failures as well as prepare for local control, that the bill for the establishment of Central Bank of Nigeria was enacted and was implemented fully on July 1, 1959. On the same day, the Central Bank of Nigeria started it’s full operation.
– In April 1960, the Central Bank of Nigeria issued the first treasury bills .
– In May 1961, the Lagos Bankers Clearing House was launched by the Central Bank of Nigeria, thereby providing licensed banks the perfect framework to clear and exchange checks rapidly.
– By July 1, 1961 the Central Bank of Nigeria had issued all the new notes and coins of the Nigerian currency denominations. It also went further to redeem all West African Currency Board’s previous money.
MAIN OBJECTIVES OF THE CENTRAL BANK OF NIGERIA:
The Central Bank of Nigeria’s establishment Act has undergone amendments in 1991, 1993, 1997, 1998, 1999 and 2007.
As at the last amendment, the Federal Republic of Nigeria has given the Bank total control and administration of its monetary and financial sector policies.
To summarize the objectives, they have been charged with:
1. Ensuring price and monetary stability;
2. Issuing the country’s legal tender currency;
3. Maintaining external reserves in order to safeguard the nation’s international value accorded the legal tender currency;
4. Promoting a sound financial environment and system; and
5. Acting as the Government’s Banker as well as provide financial and economic guidelines to the Federal Government.
In addition to its core functions, the Central Bank also has the responsibility of ensuring and maintaining high standards of banking practice in the country. This includes surveillance activities, promotion of effective payment systems, and developmental functions in key segments of the economy. This core objectives is also captured in the Central Bank of Nigeria’s mission statement, viz:
“To be proactive in providing a stable framework for the economic development of Nigeria, through effective, efficient, and transparent implementation of monetary and exchange rate policy, and management of the financial sector.”
HEADQUARTERS, BRANCHES AND DEPARTMENTS:
The Central Bank of Nigeria has its headquarters located in Abuja, the nation’s capital, and has branches in each of the 36 state capitals in the country. The Central Bank do not operate any branch outside Nigeria.
To gear up its organisation and systems for strategic, efficient and business effectiveness and to facilitate smooth communication among and between departments, a new Management Structure was put in place by the Bank.
Currently, there are twenty eight(28) Departments in the Central Bank of Nigeria which are arranged in order of relatedness, performance and job descriptions.
There are also five (5) directorates viz:
– Corporate Services Directorate;
– Economic Policy Directorate;
– Financial System Stability Directorate;
– Governors’ Directorate;
– Operations Directorate.
They were approved by the Management and are each headed by a Deputy-Governor.
BOARD OF DIRECTORS AND COMMITTEE OF GOVERNORS:
Most Central Banks in the world are governed by its Board of Directors, and the Central Bank of Nigeria is not exempted. The President of Nigeria appoints the Directors but subject to approval by the National Legislative body, the National Assembly.
The current CBN Governor is Mr Godwin Emefiele (CON) and he is also the Chairman of the Board of Directors.