A LEGAL APPRAISAL OF CENTRAL BANK OF NIGERIA AND THE UNDERPINNING OF ITS AUTONOMY PHILOSOPHICAL

The regulation of banking industry is becoming more justified as the most important sector of the economy. Since its inception, the Central Bank of Nigeria (CBN) being the regulator agency has grappled to become a powerful and semi-independent body in driving its statutory roles of ensuring monetary and price stability and the promotion of sound financial system. However, the Bank still contends with challenges associated with enforcement and political interference. The perennial attempt to strip it of certain powers by the National Assembly, the suspension of the erstwhile CBN governor, and the political pressure on management of Forex underscore the dangers it portends. The paper therefore, through doctrinal methodology, examines the laws of CBN, traces the underpinning philosophy behind its autonomy and determines how effective it has been positioning Nigeria’s financial system towards guaranteeing investments. The paper reveals that central banking is important for the purposes of uniform distribution of risk, over-issue of notes and excessive credit expansion, for rational monetary policy, and promoting sustainable economic development, as captured by its mission and vision statement. The philosophy guiding it largely determines its impact, efficacy, and the direction. The paper also exposes how this philosophy varied with enactments since colonialism and how it has been caught up in the web of power play between politicians in attempt to compromise its autonomy. The paper further argues that as-a technical body it must be insulated from political distractions, and to effectively pursue its mandate, it sometimes must take unpopular decisions. However, this quest for professionalism must not shield the institution from being accountable and transparent in the conduct of its affairs. The portion of the law ousting judicial review over its officials is therefore recommended for review. It is also recommended that in the light of its being overwhelmed as a result of its unwieldy nature, its supervisory function can be vested in another agency to be modeled after the United Kingdom’s Financial Service Authority (FSA), while it concentrates on monetary policy and other functions.