The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1987.

The mandate of the Central Bank of Nigeria (CBN) 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.

The objects of the CBN are as follows:

• ensure monetary and price stability;
• issue legal tender currency in Nigeria;
• maintain external reserves to safeguard the international value of the legal tender currency;
• promote a sound financial system in Nigeria;
• act as Banker and provide economic and financial advice to the Federal Government.

History
The period 1892 - 1952, there was an inquiry by the then colonial administration to investigate banking practice in Nigeria. The G. D. Paton Report which emanated from the inquiry was the basis for the first Banking Ordinance of 1952. The ordinance was designed to ensure orderly commercial banking and to prevent the establishment of enviable banks. A draft legislation for the establishment of Central Bank of Nigeria was presented to the House of Representatives in March, 1958. The Act was fully implemented on 1 July, 1959 when the Central Bank of Nigeria came into full operations.

The Central Bank Act, 1958 (as amended) and the Banking Decree 1969 (as amended) constituted the legal framework within which the CBN operates and regulates banks. The wide range of economic liberalization and deregulation measures following the adoption, in 1986, of a Structural Adjustment Programme (SAP) resulted in the emergence of more banks and other financial intermediaries. The Banks and Other Financial Institutions (BOFI) Decrees 24 and 25 of 1991, which repealed the Banking Decree 1969 and all its amendments, were, therefore, enacted to strengthen and extend the powers of CBN to cover the new institutions in order to enhance the effectiveness of monetary policy, regulation and supervision of banks as well as non-banking financial institutions. Unfortunately in 1997, the Federal Government of Nigeria enacted the CBN (Amendment Decree No. 3 and BOFI (Amended)] Decree No. 4 in 1997 to remove completely the limited autonomy which the Bank enjoyed since 1991.

The 1997 amendments brought the CBN back under the supervision of the Ministry of Finance. The Decree made CBN directly responsible to the Minister of Finance with respect to the supervision and control of bank and other financial institutions, while extending the supervisory role of the bank to other specialised Banks and Financial Institutions. The amendment placed enormous powers on the Ministry of Finance while leaving the CBN with a subjugated role in the monitoring of the financial institutions with little room for the Bank to exercise discretionary powers.

The CBN (Amendment) Decree No. 37 of 1998 which repealed the CBN (Amended) Decree No. 3 of 1997. The Decree provided a measure of operational autonomy for the CBN to carry out its traditional functions and enhances its versatility.

The current legal framework within which the CBN operates is the CBN Act of 2007 which repealed the CBN Act of 1991 and all its amendments. The Act provides that the CBN shall be a fully autonomous body in the discharge of its functions under the Act and the Banks and Other Financial Institutions Act with the objective of promoting stability and continuity in economic management. In line with this, the Act widened the objects of the CBN to include ensuring monetary and price stability as well as rendering economic advice to the Federal Government.

Furthermore, the regulatory powers of the CBN were strengthened by the Banks and other Financial Institutions (Amendment) Decree No. 38 of 1998 which repealed BOFI (Amendments) Decree No. 4 of 1997. Through the amendments, the CBN may vary or revoke any condition subject to which a license was granted or may impose fresh or additional condition to the granting of a license to transact banking business in the country.

By the Decree, the CBN's powers on banks, specifically those relating to withdrawal of licenses of distressed banks and appointment of liquidators of these banks, including the NDIC was restored.

The BOFI (Amendment) Decree No. 40 of 1999 makes the provisions relating to failing banks applicable to other financial institution. It also empowers the Governor of the CBN to remove any manager or officer of a failing bank or other financial institution.

The CBN has also taken responsibility for nurturing the money and capital markets. In furtherance of this, the CBN introduced treasury bills in 1960, treasury certificate in 1968, and facilitated the establishment of Lagos Stock Exchange in 1961 and the capital issue committee now known as the Securities & Exchange Committee in the early 1970s.

CBN Vision - By 2015
"Be THE MODEL CENTRAL BANK delivering PRICE and FINANCIAL SYSTEM STABILITY and promoting SUSTAINABLE ECONOMIC DEVELOPMENT".

Mission Statement
"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".

Values
Values of the Central Bank of Nigeria are: Meritocracy, Leadership, Learning and Customer-Focus are to guide the behavior of both management and employees of CBN towards the achievement of the Bank's vision. It should be these shared standards that are dear to us, which guide our daily interactions, decisions, plans and implementations. No one, from Governor to Office-Assistant should be in doubt as to what our values are and every execution of their duties should fully reflect those values.

Payment Systems
The payments system plays a very crucial role in any economy, being the channel through which financial resources flow from one segment of the economy to the other. It, therefore, represents the major foundation of the modern market economy. Essentially, there are three pivotal roles for the payments system namely; the Monetary Policy role, the financial stability role and the overall economic role.

Given the important role that well functioning payment systems has on monetary policy, financial stability and overall economic activity, the Central Bank of Nigeria has put in place a set of national payment systems policy objectives as a broad guideline and framework for all payment systems initiatives. In setting out the objectives of the National Payment Systems (NPS), the goal is to ensure that the system is available without interruption, meet as far as possible all users' needs, and operate at minimum risk and reasonable cost.

During the course of the past ten years the Central Bank of Nigeria (CBN), in collaboration with the Bankers Committee, launched the first major initiative to modernize the payments system. The starting point was to automate the cheque clearing system and making it a veritable platform for development of electronic payment channels. Hitherto cheques processing and computations of the net settlement position of banks were done manually.

The implementation of the new procedures and rules based on MICR technology revolutionized the cheque clearing system. Consequently, a Centralized Automated Clearing process was established in Lagos clearing zone, whereby with MICR Reader Sorters, necessary information on cheques are captured, built into clearing files and electronically transmitted to the clearing house, from where the net settlement position of participating banks are automatically computed and also electronically transmitted to the Central bank for final settlement. The clearing cycle was subsequently reduced from 5 days to 3 days for local instruments and from 9 days to six days in respect of up-country instruments.

International Development
Nigeria is an active member of a number of Multilateral and Regional Organisations such as the IMF, World Bank, NEPAD, ECOWAS, e.t.c. It also has Bilateral Agreements and Memorandum Of Understanding (MOU) with some Countries on economic and other issues. The Central Bank of Nigeria is an important agency of Government in the conduct of economic policies and economic diplomacy between Nigeria and other countries. This page seeks to explain economic developments in the international scene that could impact on the Nigerian economy and Monetary Policy formulation.

The International Monetary Fund
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.

The World Bank
The World Bank Nigeria 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.

The 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.

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).

The Economic Community of West African States (ECOWAS)
The Economic Community of West African States (ECOWAS) was established on May 28, 1975 and is made up of Sixteen (16) countries. The major objective of ECOWAS is to establish a common market and create a monetary union. Its mission is to promote economic integration in all fields of economic activity, particularly industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial questions, social and cultural matters.

The New Economic Partnership for African Development (NEPAD)
The New Economic Partnership for African Development (NEPAD) is a continental idea conceived by Nigeria and the Republic of South Africa and adopted by African leaders at the African Union summit in Lusaka, Zambia, in July 2000.

The New Economic Partnership for Africa's Development (NEPAD) is a continental idea conceived by Nigeria and the Republic of South Africa and adopted by African leaders at the African Union summit in Lusaka, Zambia, in July 2000. The goal of NEPAD is to eradicate poverty in Africa and to place African countries both individually and collectively on a path to sustainable growth and development to halt the marginalization of Africa in the globalization process.

Useful links

Currency of Nigeria:

Nigerian naira

List of Central Banks:

Central Banks

Official website of Central Bank of Nigeria:

www.cenbank.org

Fiscal Policy:

www.cenbank.org

CBN Community:

www.cenbank.org