CBN UPDATES

The mandate of the Central Bank of Nigeria (CBN) is derived from the 1958 Act of Parliament, as amended in 1991, 1993, 1997, 1998 and 1999 [link dates to the amendments].

The decree of 1991, now an Act of the National Assembly of the Federal Republic of Nigeria provides for the continuance of the CBN with a Board of Directors consisting of the Governor,four deputy governors and five non-executive directors. The Act charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government.

The statutory mandates of the CBN are as follows:

1. To issue legal tender currency
2. To maintain external reserves
3. To safeguard the international value of the legal tender currency
4. To promote monetary stability and a sound financial system in Nigeria
5. To act as banker and financial adviser to the Federal Government.

The Monetary Policy in Nigeria is best understood from the stance of the mandate set for the Bank, which includes:

• Maintenance of Nigeria’s external reserves to safeguard the international value of the legal currency.
• Promotion and maintenance of monetary stability and a sound and efficient financial system in Nigeria.
• Acting as banker and financial adviser to the Federal Government; and
• Acting as lender of last resort to banks.

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.

In addition to its core functions, CBN has over the years performed some major developmental functions, focussed on all the key sectors of the Nigerian economy (financial, agricultural and industrial sectors). Overall, these mandates are carried out by the Bank through its various departments.