Skip to content

History of Central Bank of Nigeria

History of Central Bank Of Nigeria. In Nigeria today, the role of Central Bank can never be over-emphasized as they provide financial services to most of the Nigerian banks. But what led to the establishment of this bank? What is their historical development/the history of central bank Of Nigeria? Do you want to know the answer to that? If yes, then read through our content and see what we have for you. Enjoy the read

The central bank did not just drop from the sky, they got history and that is what we want to share with you in this article. Here is how it was given birth to

History Of Central Bank Of Nigeria

  • Authorizing Legislation

The Central bank in Nigeria was given birth to as a result of an inquiry made under the leadership of G.D. Paton by the colonial administration in order to look into the banking practices in Nigeria. Before 1948 when the inquiry was made, there is lack of control in the Nigerian Banking Industry and as such, they resolve to restructure it.

The inquiry gave birth to the G.D Paton report which later became the cornerstone of the first banking legislation in the country called the Banking Ordinance of 1952. The Ordinance was done to prevent any non-viable bank from mushrooming, and to ensure that there is the establishment of orderly commercial banking. Even though there is also a disappointment after the growth, the banking ordinance succeeded in bringing rapid growth in the banking industry. The disappointment occurred as a result of the failure of some of the banks in the year 1958. This triggered the presentation of a bill for the establishment of a Central bank of Nigeria to the House of Representatives in Nigeria in the same year, 1958 as a result of the fact that they wish for no more failure and the need to prepare for indigenous control of the banks.

History Of Central Bank of Nigeria
History Of Central Bank of Nigeria

Fortunately, the act was fully implemented on July 1, 1959, making the Central Bank of Nigeria resume its full operation in Nigeria. Since then, the bank has been providing financial service as well as serving as the regulator of other banks in Nigeria. The major achievements of the bank since inception include

  1. In April 1960, the bank issued its first treasury bills
  2. In May 1961, the Central Bank of Nigeria launched its clearing house in Lagos called Lagos Bankers Clearing House. The role of the Lagos Clearing House is to provide licensed banks a framework in which they can exchange and clear checks rapidly.
  3. The CBN had then completely finished issuing the denominations of new Nigerian notes and coins and restored all the West African Currency Board’s previous money as at July 1, 1961.

The Central Bank Act, 1958

The CBN operates and regulates banks through the legal framework formed by the Central Bank Act, 1958 and the Banking Decree 1969. The BOFI, Banks and Other Financial Institutions Decrees 24 and 25 of 1991 were, therefore, enacted to extend and strengthen the powers of the Central Bank of Nigeria to cover the new institutions in order to enhance the effectiveness of monetary policy, regulation, and supervision of banks including non-banking financial institutions

Unfortunately, the Federal Government of Nigeria passes onto the law that the CBN in 1997 should have no independent autonomy.

  • The 1997 Amendments

The 1997 amendment of the Central Bank Act brought the CBN back to the supervision of the Ministry of Finance. The Decree gave the CBN the opportunity to be directly responsible to the Minister of Finance in term of supervision and control of the bank and other financial institutions, at the same time extending the supervisory role of the bank to other specialized Banks and financial institutions.

In the real sense, the amendment actually gave the Minister of Finance an enormous power, leaving the Central Bank of Nigeria with a paralyzed role in the monitoring of the financial institutions with little or no room for the Bank to exercise discretionary powers.


  • The 1998 amendments

After the 1997 amendment, comes the 1998 amendment which gave the Central Bank of Nigeria a measure of operational autonomy in order to carry out its traditional functions and enhances its versatility.

The Central Bank Act, 2007

Currently, the CBN operates with the Central Bank of Nigeria Act which repeals the CBN Act of the 1991 and its amendments. The Act gave the CBN the opportunity to 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 the economic management.

With respect to this, the Act also help in broadening the objectives of the CBN to include that monetary and price stability is ensured as well as rendering economic counsel to the Federal Government of Nigeria.

  • The BOFI Amended Decree, 1998

The CBN was given a better regulatory power by the BOFI Decree No 38 of 1998 which repealed the BOFI Decree No 4 of 1997. With the amendments, the Central Bank of Nigeria may revoke or vary any condition subject to which a license was granted or may even impose a fresh or additional condition to the granting of a license to transact banking business in the country.

Also, the CBN’s autonomous powers on other banks, most especially those relating to withdrawal of licenses of distressed banks and appointment of liquidators of these banks, including the NDIC was also restored.

  • The 1999 Amendments

The provision relating to failing banks made applicable to other financial institutions by Banks and Other Financial Institutions, BOFI Decree No 40 of 1999. In addition, there is the empowerment of the CBN’s Governor to remove any manager or officer of a failing bank or other financial institutions.


Central Bank of Nigeria Governors From First To Present

Governor Initial Position Since To
Roy Fenton Pentelow 24th July 1958 24th July 1963
Aliyu Mai-Bornu CBN Deputy Governor 25th July 1963 22nd  June 1967
Clement Isong Nyong Advisor, International Monetary Fund (IMF) 15th August 1967 22 September 1975
Adamu Ciroma 24th September 1975 28th June 1977
Ola Vincent CBN Deputy Governor 28th June 1977 28th June 1982
Abdulkadir Ahmed CBN Deputy Governor 28th June 1982 30th September 1993
Paul Ogwuma Agbai CEO, Union Bank of Nigeria 1st October 1993 29th May 1999
Joseph  Sanusi Oladele CEO, First Bank of Nigeria 29th May 1999 29th May 2004
Charles S. Chukwuma Chief Executive Officer, National Planning Commission (NPC) 29th May 2004 29th May 2009
Sanusi Lamido Sanusi CEO, First Bank of Nigeria 3rd June 2009 20th February 2014
Sarah Alade Deputy Governor, Central Bank of Nigeria 20th February 2014 3rd June 2014
Godwin Emefiele CEO, Zenith Bank 3rd June 2014 To date


Conclusion Of The History Of Central Bank of Nigeria

The Central Bank of Nigeria, CBN has over the years undergone series of developments in order to improve the quality of service that the bank offers. And till date, the bank remains the best regulatory bank for all other banks in Nigeria. That’s all about History of Central Bank of Nigeria.


Tags: History of Central Bank Of Nigeria