Central Bank Of Nigeria: Five Historical Facts

The Nigerian apex bank, the Central Bank of Nigeria needs no introduction. The notes in your wallet or under the pillow or wherever you hide your loot is a product of the CBN. Your sweat, yes, but CBN minted. How well do you know the Central Bank of Nigeria? Godwin Emefiele, the governor, you know; their recent secret recruitment you might know as well, and their many policies; there might even be a CBN branch in your state capital.

Historically, you might struggle to have a steady conversation about the central bank, so here are five facts from the anal to keep you versed on the CBN.

1. The best Central Bank of Nigeria governor was a white man

The Central Bank was established by an act of the House of Representatives in 1958 which makes sense seeing a Briton on the helm since Nigeria hadn’t gotten independence. Roy Pentelow Fenton is the name and he served as the number one banker of the budding country beyond independence. He was in office until 1963.

Under the governorship of Fenton, the central bank took over the issuance of the Nigerian pound sterling from the West African Currency Board that served Ghana, Gambia and Sierra Leone as well. The bank issued its first treasury bill to the public and created the Lagos Bankers Clearing House that licensed commercial banks for the quick exchange and payment of the cheques.

Fenton was not the only British to manage a Nigerian organization beyond independence. The Nigerian Army had General Officers Commanding (the equivalence of chief of army staff) of British citizenship up to 1965. Major General Sir Christopher Welby-Everard was the last expatriate army chief, handing over to General Aguiyi Ironsi. Other non-Nigerian army chiefs post-independence include Major Generals Foster and John Alexander Mackenzie.

2. There has been only one woman head of CBN

Of the twelve people who have headed the central bank, eleven of them indigenous, only one of them, Sarah Alade, is a woman. Don’t be outraged, yet. Sarah Alade was on an acting capacity. Not time for outrage. She acted for a little over three months to fill in for Lamido Sanusi Lamido after he was suspended by President Goodluck Jonathan.

Sarah Alade is an Offa-born, the University of Ife and University of Melbourne (Australia) trained economist who had been a deputy governor of the Central Bank of Nigeria since March 2007. In late 2013, then governor Sanusi had raised an alarm that 20 billion dollars was missing in the account of the Nigerian National Petroleum Corporation under the supervision of Diezani Alison-Madueke. Sanusi himself and many Nigerians believe this was the cause of his suspension in 2014.

Sarah Alade completed Sanusi’s tenor and handed over to Zenith Bank CEO Godwin Emefiele in July 2014.

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3. The central bank of Nigeria preceded the naira

In fact, the CBN created the naira, thirteen years after independence and more fifteen years after the bank came to be. The naira came into use in January 1st, 1973, replacing the pounds at the rate of two naira for one pound, making Nigeria the last former British colony to replace the pounds as their legal tender. Half a kobo, 1 kobo, 5 kobo, 10 kobo and 25 kobo was issued as coins while 50 kobo, 1 naira, 2 naira, 10 naira and 20 naira came on as notes. These kobos in note ended in 1989. 50 naira note was issued in 1991, 100 naira in 1999, 200 naira in the year 2000, 500 naira in 2001 and 1000 naira notes showing the portraits of CBN first two indigenous governors Aliyu Mai Bornu and Clement Nyong Isong was issued in 2005.

4. Abdulkadir Ahmed is the longest-serving CBN governor

Sixth Central Bank of Nigeria governor Ahmed is the longest-serving governor, holding the office for more than eleven years between  27 June 1982 to the eve of 1993 Independence Day celebration. He outlived presidents and heads of state in both civilian and military regimes. He was appointed by President Shehu Shagari to replace Ola Vincent who served for five years. Ahmed’s previous fiscal experience was as Bauchi State commissioner of finance between 1976 and 77 and deputy governor of the CBN from 1977 to when he ascended the naira throne. He is a chartered accountant.

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Born in Bauchi State, on 31 October 1940, Ahmed had degrees from the University of Ife (now Obafemi Awolowo University) and the University of South West London. Ahmed is the first person to head the successful effort to reduce Nigerian foreign debts in the 1980s, saving Nigeria the sum of 5 billion dollars, about 13 billion dollars in today’s value of the dollars.

Ahmed’s headship of the CBN is not without controversy as he was a subject of inquiries by both Sani Abacha’s junta and the Senate in the year 2000. While the Senate cleared him of any wrongdoing, the Abacha regime was critical of his dealings especially the processes that led to the award of Kafin Zaki Dam project in his native Bauchi State.

5. The CBN mandate has undergone multiple amendments

The act that established the CBN was enacted in 1958. Since then, the Central Bank of Nigeria has undergone many amendments. The first amendment was in 1991. In this act, the CBN was vested with more power of supervising and ensuring financial stability and better practices by commercial banks. There were amendments in 1993, 1996, 1998, 1999 and 2007.

The 2007 CBN Act gave the Central Bank of Nigeria the sole power of controlling and administering all financial and monetary policies of the Federal Government of Nigeria. Charles Chukwuma Soludo was governor of the bank then and this might have influenced his decision to make 25 billion naira the minimum capital base for every bank in Nigeria.

In 2008, Soludo took this a little too far when he wanted to redenominate the naira which basically meant removing two zeros from the naira meaning that a dollar that was sold for 120 naira would now go for 1 naira 20 kobos. The plan was met with general scepticism and criticism. The Yar’adua government suspended this plan and it has never been raised again.