Men that Shaped the Central Bank of Nigeria
THE story of the minds that shaped the Central Bank of Nigeria, the country’s foremost financial institution would be incomplete without highlighting the far-reaching contributions of Messrs G.D Paton.
Renowned for his incorrigibility, Mr. Paton has earned reputation as the last governor of the Central Bank under the colonial administration. Before the lowering of the Union Jack, Mr. Paton in 1948 conducted an investigation into banking practices in Nigeria, which was at that time largely uncontrolled.
His report, an offshoot of the inquiry later became the corner stone of the first banking legislation in the country – the banking ordinance of 1952. The ordinance was designed to prevent non viable banks from mushrooming, and essentially ensure orderly commercial banking. And beyond the rhetoric, the banking ordinance triggered a rapid growth in the industry but not without a tinge of disappointment.
By 1958, a few number of banks had failed. To curtail further failures and to prepare for indigenous control, a bill for the establishment of Central Bank of Nigeria was presented to the House of Representatives of Nigeria in 1958. It was the Paton Report that was sent to the House of Representatives. The Act was fully implemented on July 1, 1959, when the Central Bank of Nigeria came into full operation and the first indigenous governor was appointed for the Central bank.
Alhaji Aliyu Mai-Bornu (1963-1967)
Mallam Aliyu Mai Bornu subsequently became the first indigenous governor of the Central Bank of Nigeria. Born in 1919 and began his elementary school in 1932, Alhaji Mai Bornu was transferred to Yola Middle School from where proceeded to the then Kaduna College in 1938 and passed out in 1942 after qualifying as an English Language teacher. Mallam Mai Bornu taught English at his alma mater, Yola Middle School from 1942 to 1946 and then proceeded to Kaduna College where he served in the same capacity. In 1954, he served as House Tutor at the Veterinary School in Vom before proceeding to Bristol University that same year to study Economics. Upon graduation in 1957, he returned to Nigeria and served with the Northern Nigeria Public Service as an Administrative Officer where he held various positions before his secondment to the Central Bank of Nigeria in 1959 as an Assistant Secretary. At the CBN, Mallam Mai Bornu went on to become the Deputy Secretary and Secretary before his appointment as Deputy Governor in 1962.
He became the first indigenous Governor of the Bank in 1963 and retired from its service in 1967. He was thereafter appointed Director and General Manager of the Nigerian Tobacco Company (NTC). Although he resigned his appointment at the NTC in 1969, he continued to serve as a member of the Board of Directors until his death on the 23rd of February, 1970.
Dr. Clement Nyong Isong (1967-1975)
Dr. Clement N. Isong later became the second Nigerian to be governor of the Central Bank of Nigeria. A brilliant, industrious and highly talented Nigerian, Dr. Isong, like his predecessor started his career as a school teacher and later became a banker, economist, administrator and politician. He was born on 20th April, 1920 in Eket, Akwa Ibom State to Mr. and Mrs. Nathaniel Isonguyo. He attended University College; Ibadan He later won the Ford Foundation and Rockefeller scholarships to study Business Administration at Iowa Wesleyan College, Iowa, USA, where he graduated with first class honours (Sunma cum laude) in 1954.
Isong went further to the prestigious Harvard Graduate School of Arts and Science, Massachusetts where he obtained his Masters and Doctorate Degrees in Economics. At Harvard Graduate School of Arts and Science, he obtained Ph.D. in Economics.
Dr. Isong taught Economics in University of Ibadan. He was immediately employed as assistant economist at the Federal Reserve Bank, New York, but later returned to the University of Ibadan, where he lectured in Banking and Economics. He joined Central Bank of Nigeria as Secretary and later became Director of Research. He was seconded to the International Monetary Fund (IMF) as an Adviser in the African Department. He later served as the governor of the Central bank of Nigeria from 1967 to 1975 at a critical time in the history of Nigeria. After retirement, he joined politics. He was elected the first civilian Governor of Cross River State from 1979 to 1983. Dr. Isong was honoured with Commander of the Federal Republic of Nigeria (CFR) in 1982. He died on 29th May, 2000. His portrait appears on the N1000 Note.
However in 2006, a Non Governmental Organization was established in his memoriam. The foundation is dedicated to preserving the legacies of Chief (Dr.) Clement Nyong Isong, and evoking the highest echelon of excellence in human development.
The Foundation carries out economic, developmental and related studies for the benefit of humanity and public policy primarily research oriented, the Foundation additionally engages in quality life improvement service such as the provision of educational scholarships, free medical services to communities and literature development. To present and perpetuate the numerous legacies of Chief (Dr.) Clement Nyong Isong, CFR through becoming a research, service policy - oriented and internationally sought after Foundation.
Chief Ola Vincent (1977-1982)
Erudite banker and economist, Chief Ola Vincent was from 1977 - 1982, the governor of the Central Bank of Nigeria, the highest height he attained in the country’s public office. And since his retirement, Vincent has more or less maintained a low profile in public circles perhaps just content with occasional advocacy on matters of national debate. He would perhaps be remembered for recommending the establishment of Nigeria Deposit Insurance Corporation (NDIC) in 1983 to examine the operations of the banking system in Nigeria. The Committee in its Report recommended the establishment of a Depositors Protection Fund. Consequently, the Nigeria Deposit Insurance Corporation was established through the promulgation of Decree No. 22 of 15th June 1988. This was part of the economic reform measures taken by the then government, to strengthen the safety net for the banking sector following its liberalization policy and the introduction of the 1986 Structural Adjustment Programme (SAP) in Nigeria.
Alhaji Abdulkadir Ahmed (1982-1995)
Paul Ogwuma (1995-1999)
Paul Ogwuma became governor of the Central Bank of Nigeria in 1995 at a time when the bank had numerous challenges including how to tackle the pervasive distress of managing the country’s foreign exchange resources. He was also saddled with the responsibility of formulating adequate monetary and fiscal policies to reduce inflation, promote growth and development, provide jobs and reduce the country’s debt portfolio. Ogwuma, for the first time in the country’s economic history addressed the issue of distressed banks by liquidating 20 banks over three years in an attempt to sanitise and restore confidence in the country’s financial system. He also presided over a revitalised finance system demanding for increased capitalisation to protect both depositors and investors.
Ogwuma started out his banking career in United Bank for Africa Plc before moving over to Union Bank Plc where he rose to the position of managing director/chief executive officer before retiring in the late 1980’s. He attended the Bradford Institute of Technology, Bradford University, US. He has fellowship of many institutes and was awarded honorary doctorate of the Imo State University.
Joseph Sanusi (1999-2004)
Joseph Sanusi was made the Central bank governor in late May 1999. Hand picked by President Obasanjo as a safe pair of hands, Sanusi was until then the managing director of one of Nigeria’s largest commercial banks. A conservative banker, Sanusi on June 21, 1999 introduced foreign exchange controls in an attempt to defend the naira and stem a continuing drain on foreign reserves. The reserves had fallen under Gen. Abubakar’s regime from $7.1bn in early 1999 to less than $4 bn. The country’s oil revenues, accounting for over 90 percent of export earnings, have been averaging about $160m per week. They are not sufficient to cover minimum debt servicing needs, cash calls to NNPC’s oil producing JVs and allocations to the weekly foreign exchange market.
In a circular to commercial and merchant banks, the Central Bank said all foreign exchange applications from June 23 were to be supported by an investment in non-discountable treasury bills. It also said: “Under this arrangement, any bank bidding for foreign exchange shall provide the initial cash backing while the amount demanded shall be collateralised 200 percent by treasury bills and held for a minimum of one month”.
This prompted concern among business leaders and bankers who believed the only long-term solution to the monetary crisis was devaluation, in concert with reforms to the foreign exchange market. They feared that failure to do so could jeopardise the chances of an early IMF loan. But Sanusi and other leaders in the new government were against devaluation. Sanusi also told an earlier bankers’ committee meeting that the foreign reserves were declining at an unsustainable rate, despite President Obasanjo’s suspension of all deals signed by the military regime since the beginning of 1999.
Charles Chukwuma Soludo (2004-Date)
Born 28 July 1960, Charles Chukwuma Soludo is a Nigerian economics professor and the incumbent governor and Chairman of the Board of Directors of the Central Bank of Nigeria (CBN). He has been Governor since 29 May 2004. He is also a member of the British Department for International Development’s International Advisory Group.
Dr Soludo has been visiting scholar at the International Monetary Fund, the University of Cambridge, the Brookings Institution, the University of Warwick and the University of Oxford and a visiting professor at Swarthmore College (USA). He has also worked as a consultant for a number of international organizations, including The World Bank, the United Nations Economic Commission for Africa, and the United Nations Development Programme. Soludo is a core professional in the business of macroeconomics. He obtained his three degrees and then professorship at the University of Nigeria in Nsukka, Enugu State. He graduated with a First Class Honors degree in 1984, an M.Sc. Economics in 1987, and a Ph.D. in 1989, winning prizes for the best student at all three levels.
He has been trained and involved in research, teaching and auditing in such disciplines as the multi-country macro econometric modeling, techniques of computable general equilibrium modeling, survey methodology and panel data econometrics, among others. Soludo studied and taught these courses at many Universities, including Oxford, Cambridge and Warwick. He has co-authored, co-edited and authored about ten books on this subject matter. In 1998 Soludo was appointed to the position of professor of economics at the University of Nigeria; the next year he became a visiting professor at Swarthmore College in Swarthmore, Pennsylvania, US.
Soludo joined the federal government in 2003. Prior to his May 2004 appointment to the bank chairmanship, he held the positions of Chief Economic Adviser to former President Obasanjo and Chief Executive of the National Planning Commission. In January 2008, in a speech to the Nigerian Economic Society, he predicted consolidation in the private banking industry, saying “By the end of 2008, there’ll be fewer banks than there are today. The restructuring of the banking industry has been attracting funds from local and foreign investors, which have increased banks’ ability to lend to customers”. He hopes to see Nigeria become Africa’s financial hub, and considers microfinance important to the federal government’s economic policies. It has been asserted that in April 2008, Soludo was accused of abuse of his position.
The Central Bank of Nigeria has come of age. It is a golden age of achievements accompanied by specific problems that are germane to the Nigerian operating environment. The CBN has much to do especially when it has committed itself to helping Nigeria launch herself into the Club of 20 most powerful economies by 2020. Can we achieve this goal? Let the CBN prove its mettle.