CBN: 62 Facts About Central Bank of Nigeria

The Central Bank of Nigeria (CBN) mandate 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.

Consequently, the Bank is charged with the responsibility of administering the Banks and Other Financial Institutions (BOFI) Act (1991) as amended, with the sole aim of ensuring high standards of banking practice and financial stability through its surveillance activities, as well as the promotion of an efficient payment system.

Be that as it may, let now take look a over sixty facts and events timeline about Central Bank Of Nigeria (CBN), which is as follows:

LEGISLATION

Mr Loynes, an adviser to the Bank of England, favoured the idea of establishing a Central Bank of Nigeria. His views and recommendations formed the basis for the draft legislation that established the CBN.

CBN Opens

July 1, 1959. Central Bank of Nigeria came into full operations in Lagos with an initial capital of 17 million pounds ('17m). It was primarily involved in banking and currency operations.

Chief Festus Okotie Eboh

He was renowned for his memorable speech at the opening ceremony of the Central Bank of Nigeria Lagos Office. He said the establishment of the Central Bank was a step forward in the triumphant march towards independence. He added that the Central Bank of Nigeria forms an integral part of the drive towards independence which he believed, would be achieved in Nigeria by the 1st of October, 1960.

DRAFT IMPLEMENTATION

July 1st 1959. The Act fully establishing the Central Bank of Nigeria was implemented

Treasury Bills

The 90-day treasury bills, monetary policy instruments were first issued in April, 1960. They were used to borrow money from the public to finance its projects and as a control tool. Treasury certificates were introduced in 1968 with a longer tenor of up to three years.

Nigeria

October 1, 1960. Nigeria gained independence and became a sovereign country. Its currency is the naira and the main xxxxxx ecomony is based on agriculture, mining, petroleum product

Agric Credit Guarantee Scheme

The Agricultural Credit Guarantee Scheme (ACGS) was established in 1977, under the management of the Central Bank of Nigeria. The scheme was designed to encourage banks to increase lending to the agricultural sector by providing guarantee against inherent risks.

BOFIA

In 1991, the Bank s and Other Financial Institutions Act (BOFIA) formerly BOFI was promulgated to replace the CBN Act of 1958 and the Banking Decree of 1969 (including later amendments). The policy brought the non-bank financial intermediaries under the supervision of Central Bank of Nigeria.

Association of African Central Banks

The Association of African Central Banks was established following the recommendations of the first Meeting of Governors of African Central Banks which was held in Addis Ababa from 15 to 22 February 1965. The objective of the Association is to promote co-operation in the monetary, banking and financial sphere in the African region and to assist in the formulation of guidelines along which future agreements between African countries can proceed in these areas. The Association has a Secretariat located at the Headquarters of the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO) in Dakar, Senegal.

African Development Bank (ADB) Group

African Development Bank (ADB) Group is a regional multilateral development bank established in 1964, but commenced operations in 1967. It is owned by 77 nations from Africa, North and South America, Europe and Asia. The objectives of the ADB Group are to mobilize resources for economic and social development of African countries. The Group comprises the African Development Bank, African Development Fund (ADF) and the Nigerian Trust Fund (NTF).

Central Banking

The earliest known bank of issue is the Riksbank of Sweden (1656). Modern central banking started with Bank of England (1694). Central Bank of Nigeria began operations in 1959.

Development Stocks

The first development stock was issued in 1946. Central Bank of Nigeria took the responsiblity of issuing stock at its inception. The Lagos Stock Exchange (now Nigerian Stock Exchange) was set up in 1961 to take over transactions in the stocks.

Federal Ministry of Finance

The Federal Ministry of Finance (FMF) advises the Federal Government on its fiscal operations and collaborates with the Central Bank of Nigeria (CBN) on monetary matters. Before 1991, the responsibility for the supervision and licensing of banks was shared between FMF and CBN until 1991 when CBN became the sole authority.

International Monetary Fund

The International Monetary Fund was established in 1945 to promote the health of the world economyworld economy with 29 countries sigining the Articles of Agreement. Nigeria joined the IMF in 1961,which now has 184 members with its headquarters in Washington D.C., USA.

London Club of Creditors

These are mainly uninsured and unguaranteed debts extended by commercial banks to nationals of debtor nations. Members of the club are commercial banks mainly in industrialized countries. The first London club meeting was held in 1976 to discuss re-payment and conclude re-structuring agreements.

NEEDS

National Economic Empowerment and Development Strategy was developed by the National Planning Commission, then headed by Prof Charles Soludo. It was endorsed by the Federal Executive Council of Nigeria as a poverty-alleviating strategy. The aim of the scheme was to meet the Millenium Developoment Goals of curbing the menace of poverty in Nigeria and bringing it to the barest minimum by the year 2015.

Operation Feed the Nation (O.F.N.)

Operation Feed the Nation was introduced by the federal military government headed by General Olusegun Obasanjo in 1979.It had the specific focus of increasing food production on the premise that availability of cheap food would ensure a higher nutrition level and invariably lead to national growth and development.OFN lasted till the civilian government of Alhaji Shehu Shagari in 1979.

Paris Club of Creditors

The club represents only government guaranteed creditors. Members include the United States of America, United Kingdom, Germany, France and Canada, who guarantee the export activities of their nationals. When the recipient nation s government is unable to pay the equivalent of the imports domestic currency cover, it becomes government debt owed to creditor nations. The first Paris Club meeting was held in 1956.

Structural Adjustment Programme (S.A.P.)

Introduced in June 1986, the Structural Adjustment Programme was introduced after a public debate on IMF loan conditionalities. It was aimed at re-structuring the productive base of the ecnonomy and promoting non-inflationary economic growth.

West African Currency Board

The West African Currency Board was established in 1912 to retain the services of Bank of British West Africa. It set up four centres in Lagos, Accra, Freetown and Barthurst (now Banjul).

Indigenous Banking in Nigeria

The story of indegenous banking in Nigeria began with the establishment of the National Bank of Nigeria Limited in February 1933.

First Governor of CBN

Mr. Roy Pentelow Fenton was appointed the first and the only expatriate Governor of Central Bank of Nigeria. He served from July 24, 1958 to July 24, 1963.

Evolution of Departments

At inception, the organisational structure of the CBN was understandably simple consisting of two departments, namely, the General Manager's and the Secretary's Departments, with the appropriate division of labour as then percieved. The General Manager's Department was responsible for all the Department banking, currency issues, debt management and other operational functions of the bank while the Secretary's Department handled the administrative and staff matters, carried out some research into the economic and financial conditions, and collected and analysed relevant statistics for policy formulation.

MANPOWER DEVELOPMENT

Mr. Graham William Keep was appointed the first and the only Expatriate Deputy Governor of Central Bank of Nigeria, from January 27, 1959 to January 26, 1962.

Appointments

The Governor and the Deputy Governor are appointed for five years while the other Directors are appointed for three years.All board members are eligible for reappointment.

BOARD OF DIRECTORS

The Management of the CBN is placed under a Board of Directors which is responsible for the Policy and General administration of the Affairs and Business of the Bank.Under the original statute,the Board was composed of the Governor as Chairman,a Deputy Governor and Five other Directors all of whom were appointed by the Federal Government.

PHYSICAL EXPANSION

The CBN former headquarters in Marina Lagos was opened and began full operations in banking and curency activities only.

POLICY MAKING ORGAN

The Board of Directors is responsibe for formulating the Monetary/Credit and Exchange rate policy proposals for the approval of the Federal Executive Council and for implementating approved policy guidelines.

Central Bank of Nigeria, Kano Branch

In 1962,the first Central Bank Branch was established in Kano and opened for business in the same year.This brought to 2, the number of Central Bank offices in Nigeria at that time.

First Indigenous Governor of CBN

Alhaji Aliyu Mai Bornu was the first Nigerian Governor of the Central Bank of Nigeria from July 25, 1963 to July 31st, 1967.

Central Bank of Nigeria, Port-Harcourt Branch

In 1964,Port-Harcourt Branch was opened for business.It was the second branch that was established by the CBN. It brought to 3, the number of Central Bank Offices in Nigeria at that time.

Central Bank of Nigeria, Ibadan Branch

In the year 1965, The Central Bank of Nigeria,Ibadan Branch was opened for business.It was the third Central Bank office that was established and it brought to 4, the number of Central Bank offices in Nigeria at that time.

Central Bank of Nigeria, Enugu Branch

In the year 1966, The Central Bank of Nigeria Branch in Enugu was opened.It was the fourth Central Bank Branch that was established, bringing to 4, the number of Central Bank offices in Nigeria at that time.

PHYSICAL EXPANSION

Benin Branch was opened.

Dr Clement Nyong Isong

Dr. Clement Nyong Isong was appointed the second Nigerian Governor of Central Bank of Nigeria, from August 15, 1967 to September 22nd, 1975. He also served as the Governor of the old Cross River State.

PHYSICAL EXPANSION

Kaduna Branch was opened.

ORGANISATION AND GROWTH

In March, 1970, the Board of Directors employed the services of W.H. Rozell (Junior), a consultant, to, among other things, review the existing structure and size of the Bank Departments. In the same year, Rozell proposed a new organisational structure for the CBN.

PHYSICAL EXPANSION

Jos Branch was opened.

Mallam Adamu Ciroma

Mallam Adamu Ciroma was appointed the third Nigerian Governor of the Central Bank of Nigeria, from September 23rd, 1975 to June 27th, 1977. He later served as the Minister of Finance in the first Obasanjo democratic administration

PHYSICAL EXPANSION

Maiduguri Branch was opened.

ORGANISATION AND GROWTH

In 1978, the size of the Board of Directors was increased from 7 to 13, through the recommendations of McKinsey International Incorporated, a UK-based consultant firm.

PHYSICAL EXPANSION

Calabar, Ilorin and Sokoto branches were opened.

Guidlines for Licensed Banks

In 1990, the CBN introduced a set of Prudential guidelines for licensed banks which were complimentary to the capital adequacy requirement and statement of accounting standards. The guidelines spelt out the criteria to be adopted by banks in classifying non-performing loans.

Nigerian Inter-Bank Settlement System

In March 1993, the Nigerian Inter-Bank Settlement System (NIBSS) was incorportaed to enhance the speed and effeciency of the national clearing system.

Magnetic Ink Character Recognition

The Magnetic Ink Character Recognition (MICR) which is an automated system for sorting cheques and other financial instrumenTS. This facility came into effect in the early part of 1995.

National Clearing System Re-Visited

In January 1995, a revised clearing rule became operational to facilitate effective clearing of financial instruments and shorten the period of clearing. Consequently, inter-state cheque clearing time was reduced from 21 days to 15 days, while intra-state clearing has been reduced from 12 days to 9 days.

The West African Monetary Institute (WAMI)

The West African Monetary Institute (WAMI) - http://www.wami-imao.org/ is saddled with the responsibility of facilitating the realization of the single monetary union of the WAMZ. The institute is located in Ghana.

The Cowry

The Cowry has, for centuries, served our people as an important form of currency. In 1860 the following system was in use: 40 Cowries formed a "String"; 50 Strings made a "head" and 10 heads comprised a "bag". In Lagos in 1865 one bag of 20,000 shells was exchanged for one or two English Pounds.

Nigerian Pound

First issued in 1959, the Nigerian pound had fixed parity with the British Pound while it enjoyed full Sterling backing. It remained in circulation until January 1973 when decimalised currency, the Naira was introduced with four denominations (fifty kobo, one naira, five naira, and ten naira).

Federal Reserve Bank

The Federal Reserve, the Central Bank of the United States was founded by Congress in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system. The Chairman and Vice Chirman of the Board are named by the President from among the members and are confirmed by the Senate.They serve a term of four years.The Federal Reserve System are also nominated by the President and confirmed by Senate. A full term is fourteen years. Alan Greenspan is the current Chairman

Payment Cards

Payment cards are paper based instruments which were introduced in 1933.

Black Thurday

Black Thursday was the first sign of the end of a great bull market. 12.9 million shares changed hands that day (4m shares was considered a busy day back then). Most of the panic started in the morning. The ticker tape machine fell behind by an hour and a half leaving investors madly scrambling to sell their investments without knowing the current prices. Panic set in. People gathered outside the exchanges and brokerages, police were dispatched to insure peace. Rumors were flying. By 12:30 pm, the Chicago and Buffalo Exchanges closed down, eleven well-known speculators had already committed suicide and the NYSE closed the visitor's gallery on the wild scenes below. The market moved up a bit afterwards, but the real recovery came at 1:30 pm, when self-confident Richard Whitney, vice-president of the NYSE and floor broker of J.P. Morgan and Company, walked into the exchange floor. The crowd went silent. Everyone expected an announcement that the NYSE would be closed. Instead, Richard Whitney surprised everybody by buying 10,000 shares of U.S. Steel (Bid at 109) at 205. He immediately received 200 shares and then left the rest of the order with the specialist. He continued to make similar orders for over a dozen more stocks. Fear evaporated as investors became worried that they would miss the new boom. Black Thursday was the worst day in the US stock market and the beginning of the Great Crash of 1929.

The World Bank

Esterblished July 1, 1944 during a conference of 44 countries in Bretton Woods, New Hampshire. The World Bank is made up of one hundred and eighty four (184) member countries of which Nigeria is a member. The Bank and the International Monetary Fund (IMF) introduced Poverty Reduction Strategy Paper (PRSP) as a condition for lending to developing countries, in order to ensure that the living standards of the poor are lifted by public expenditure. Nigeria entered the process but eventually ended with the National Economic Empowerment and Development Strategy (NEEDS).

International Monetary Fund

The International Monetary Fund (IMF) was established by an international treaty in 1945, to help promote the health of the world economy. The Headquarters is in Washington, D.C. It is governed by its almost global membership of 184 countries. The IMF is the central institution of the international monetary system, the system of international payments and exchange rates among national curries that enables business to take place between countries. It aims to prevent crises in the system by encouraging countries to adopt policies a fund that can be tapped by members needing temporary financing to address balance payments problems

The International Monetary Fund (IMF)

The International Monetary Fund, was established in December 1945 by the United States of America, and a group of forty four (44) governments based on a framework of economic cooperation. The IMF focuses mainly on Nigeria's macroeconomic policies.

Commercial Banking in Nigeria

In 1951, a Commercial Bank known as the Central Bank of Nigeria was created. However, this bank was not in any way related to the Central Bank of Nigeria established in 1959, which is the regulatory body for the Financial Industry.

CBN Board of Directors

In 1970, the First Board of Directors of the Central Bank of Nigeria, employed the services of W.H. Rozell (Jnr.), a Consultant, to, among other things, review the existing structure and size of the Banks departments. Precisely in March of the same year, Rozell recommended for the first time, a new organizational structure for the CBN.

Central Bank of Nigeria, Jos Branch

On June 15, 1972, the Jos branch of the Central Bank of Nigeria was commissioned by the then Police Commissioner and Governor, Benue Plateau State, late Joseph Deshi Gomwalk.

Decimal Currency

In 1973, the Nigerian pound was converted to decimal currency. The Naira was equvalent to two old pounds while the smallest unit was the kobo.

Staff Housing

The first phase of housing projects for CBN staff commenced on a large estate of land in what used to be known as Satellite village, situated on the outskirt of Lagos.

Refinancing and Rediscounting

The Refinancning and Rediscounting Facility(RRF) was introduced in April, 1987 to encourage banks to undertake export finance. The management of this service was transferred from Central Bank of Nigeria to Nigerian Export and Import Bank in 1991.

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