Nigeria’s Central Bank Governors: The Good, The Bad & The Horrible


Apart from being the appending his signature to every denomination of Nigeria’s currency, the Governor of the Central Bank of Nigeria functions as the overseer of the country’s banking sector. He sits atop the apex bank which has the mandate of ensuring monetary and price stability and also issues legal tender currency. The Central Bank also maintains the country’s external reserve to safeguard the international value of the legal tender.  The Governor of the Central Bank is also in charge of the official bank of the Federal Government, with the bank allowed to provide economic advice to the Federal Government.

In the course of performing these duties, Nigerians have had reasons to rate the performance of Governors of the Central Bank. Whether the office is jinxed or not has also been a matter of debate on several occasions, especially with reference to how past Governors of the bank fared in office.

Over the years, it has been found out that every CBN Governor resumes office with his own reform process. Many still remember that the cleanup of Nigeria’s banking sector started with Paul Ogwuma who resumed as the Governor of the Central Bank of Nigeria in October, 1993. Ogwuma spent the first three years liquidating over 20 distressed banks in the bid to restore confidence in the financial sector.

He was however not without some shortcomings. He has been accused of complicity in the grand looting that took place while General Abacha ruled the country. Then, it was said that Abacha had the CBN as his honey pot and he used the country’s treasury as a personal purse. Under Paul Ogwuma’s watch as CBN Governor, in the first few months of the Abdulsalami Abubakar administration, Nigeria’s foreign reserves fell from $ 7.1 billion to $ 4 billion.

Financial crimes also gained more ground during that period. A major one was committed by con men who duped a Brazilian bank of a whopping $ 242 million with one of the fraudsters posing as the Governor of the Central Bank of Nigeria.

When a new civilian administration came to power in 1999, Joseph Sanusi was appointed as the CBN Governor. He developed on the works of his predecessor and also embarked on a currency restructuring exercise. Not long afterwards, Nigeria had bigger currency denominations of N 100, N 200 and N 500 notes, as against the N 50 which was until then the biggest currency denomination.

Joseph Sanusi took decisive steps some of which earned him knocks from critics. One of his first was the introduction of foreign exchange controls which he believed would reduce the drain on foreign reserves which had grossly depleted to $ 4 billion from $ 7.1 billion two years before then. While that was hailed by many, Sanusi’s reputation became a subject of major discussions when he announced the revocation of the operating license of Savannah Bank on the claims that the bank did not comply with the CBN’s obligations. He claimed the revocation was necessary in order to prevent further deterioration of the situation. The matter eventually became a matter of litigation with the courts ruling in Savannah Bank’s favour years after.

It is still believed in some quarters that Joseph Sanusi left his job mainly because he fell out with his employers in the course of discharging his duties. His undoing was thought to be the fact that he linked Nigeria’s rising debts then to a number of activities including the Federal Government’s borrowing from the Central Bank, which caused inflation and exchange rate problems thus hindering economic growth on the long run.  He recommended productive use of borrowed funds so that returns would be optimized and of course problems would not be created for the future generations. He eventually quit the job in 2004.

By the time Prof Charles Chukwuma Soludo resumed as Nigeria’s number one banker, he saw what many believed was a rot in the banking industry. With his experience and wisdom as a Professor of Economics, Soludo saw it as a misnomer that many of the companies Nigerians called commercial banks were nothing more than merchandising agencies. Bank executives knew that a wind of change was blowing when Soludo started the bank consolidation exercise. The serious clampdown that followed affected a lot of mushroom investments and finance houses that fleeced Nigerians. Banks were directed to increase their shareholders’ funds from N 2 billion which was the minimum before Soludo took over to N 25 billion. Though the directive generated a lot of noise, Soludo had his way at the end of the day.  Many of the 85 banks that operated in Nigeria soon fused to become 25.

Like his predecessors, Soludo’s time as CBN Governor was not devoid of controversies. The CBN Governor’s autocratic powers became more pronounced in Soludo’s time as the Monetary Policy Forum underwent metamorphosis to become the Monetary Policy Committee. The Committee is headed by the CBN Governor and it has his deputies as members as well as others within the CBN circle. Ordinarily, the committee would work well in a setting where views of the shareholders in the industry are taken into consideration both in the conception and implementation of policies. What however obtains now is that policies are formulated without carrying shareholders along.

One of the other things that placed Soludo at the receiving end of criticisms was his decision to redesign the Naira. For the first time, Nigeria had polymer banknotes, which unfortunately failed to endure more than the paper notes they were meant to replace.

Sanusi Lamido Sanusi was nominated in 2009 by Late President Umar Musa Yar’ Adua to bring about more stringent controls on the financial sector. Not quite three months after he assumed office, Sanusi Lamido Sanusi made his first move. With N 400 billion, the CBN bailed out 4 banks, Afribank, Intercontinental Bank, Oceanic Bank and Union Bank. The chief executives of the banks were also dismissed. The move according to Sanusi Lamido Sanusi was to show that “recklessness on the part of bank executives would no longer be tolerated.”

To many, Sanusi Lamido’s reforms targeted the “Banking Industry Mafia” that held sway in the days of his predecessor. Sanusi’s vituperation s went beyond the banking sector as he took on Nigeria’s National Assembly when he claimed that its members accounted for 25 % of the country’s budget.

While the CBN Governor was hailed by a number of Nigerians for his strategies and many activities aimed at bringing sanity back into the banking sector, he put himself up for criticism when he stated that in line with the currency restructuring plan, he announced that a N 5,000 note will be introduced while N 5, N 20 and N 50 will become coins. Nigerians, especially those who believe the new denomination will cause inflation have continually fired criticisms at Sanusi Lamido. The CBN Governor has however put up very stern defense of his actions.

Some Nigerians now see the office of the CBN Governor as one that has been jinxed. The many flaws from the CBN have been cited as reasons. Those flaws have continually generated questions.

For instance, with the Money Laundering Act in place, banks have the statutory responsibility of reporting transactions involving more than N 5 million to the Central Bank and the Economic and Financial Crimes Commission. The question being asked however remains that “how has millions of Naira been laundered without the Central Bank’s knowledge?” This has proved to be an indication of a corrupt system as well as the CBN’s failure at performing its duties of supervising operations in banks.

Street Journal’s investigations have also revealed that book checking, a major function of the apex bank has become more of a ritual which is merely done to “fulfill all righteousness” and no longer done as appropriate. The fact that bank chiefs were able to “steal” and launder billions of Naira before the Central Bank of Nigeria made discoveries of such has confirmed the investigation’s findings. How the Intercontinental Bank ended up being bought by people on its debtors’ list is also an indication that the CBN might not have been discharging its duties as appropriate.


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