Central Bank of Nigeria

The Central Bank of Nigeria (CBN) is Nigeria’s central bank and apex monetary authority, established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are to: maintain the country’s external reserves; promote monetary stability and a sound financial environment; and act as a banker of last resort and financial adviser to the federal government.

The central bank’s role as lender of last resort and adviser to the federal government has sometimes pushed it into murky political controversies. After the end of colonial rule, the desire of the government to become proactive in the development of the economy became visible, especially after the end of the Nigerian civil war, the bank followed the government’s desire and took a determined effort to supplement any show shortfalls, credit allocations to the real sector. The bank became involved in lending directly to consumers, contravening its original intention to work through commercial banks in activities involving consumer lending.

However, the policy was an offspring of the indigenisation policy at the time. Nevertheless, the government through the central bank has been actively involved in building the nation’s money and equity centres, forming securities regulatory boards, and introducing treasury instruments into the capital market. The bank has thirty-six branches each in the 36 states of the federation and the headquarters in FCT.