AMENDMENT OF THE CENTRAL BANK OF NIGERIA ACT, CAP C4 LFN, 2007

PRESENTATION BY MR SEGUN AINA, OFR, FCIB PRESIDENT/CHAIRMAN OF COUNCIL, THE CHARTERED INSTITUTE OF BANKERS OF NIGERIA AT THE PUBLIC HEARING ORGANISED BY THE SENATE JOINT COMMITTEE ON BANKING, INSURANCE AND OTHER FINANCIAL ISTITUTIONS AND, JUDICIARY, HUMAN RIGHTS AND LEGAL MATTERS 28th MAY 2012 PREAMBLE We are very delighted for the invitation extended to The Chartered Institute of Bankers of Nigeria (CIBN) by the Senate Joint Committee on Banking, Insurance and other Financial Institutions and Judicial, Human Rights and Legal Matters to make presentations and input into the proposed Amendment of the Central Bank of Nigeria Act. Cap C4 LFN. 2007. The CIBN is a self regulatory banking professional body in Nigeria promoting banking and finance education, ethics and professionalism consistent with global best practices. It was incorporated as a Company Limited by guarantee in 1976. It attained its Chartered status through Act No 12 of 1990, which was re-enacted as Act No. 5 of 2007. One of its core statutory responsibilities is to ensure the furtherance, maintenance and observance of ethical standards and professionalism among practitioner of banking profession in Nigeria, who are individuals and corporate bodies, including all deposit money bank, Nigeria Deposit Insurance Corporation and Central Bank of Nigeria. This presentation represents the views and opinion of a wide spectrum of various categories members after extensive consultations. Our understanding of the main thrust of the proposed amendment is that is seek to enhance the powers of the Bank to prohibit transactions with Foreign Currencies in Nigeria; compel the Bank to submit its Annual Budget before the National Assembly; alter the governance structure of the Bank and for Related Matters. The presentation to this distinguished Joint Committee is categorized into five major parts. First, is the Introduction which expouses the concept of Central Banking and its roles and objectives in any economy. The second part examines in context the autonomy or independence and governance structure of Central Banks with highlights on International best practice and country experiences. In the third part of this presentation attempts

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are made to review the CBN Act 2007 while the fourth part highlights the implications of the proposed amendments. Finally, the fifth part provides recommendations and conclusions from the Institute representing the position of its members .i.e. the banking industry. ROLES AND OBJECTIVES OF CENTRAL BANKS Central Banks all over the world have the core mandate of ensuring monetary and price stability as well as a non-inflationary growth. They also have the responsibility of ensuring a sound and stable financial system, in addition to other developmental functions. These mandates and functions are peculiar to central banks, and no other institution performs such functions. These special responsibilities are enormous and have continued to pose increasing challenges to central banks, largely because developments in the domestic and international economies create significant intricacies and complexities in the financial systems. Indeed, the current trend of globalization exemplified by economic and monetary unions has increased the challenges to central banking. The effective discharge of these responsibilities requires that Central Banks be truly independent, shielded from political interferences, have administrative and budgetary independence and instrument autonomy. The role of the Central Bank as a regulator has been the focus of much public attention and debate, particularly in light of the increased pressure that the transformation of the financial services industry poses to the supervisory authority in achieving its goals of safety and soundness whilst facilitating market efficiency and effectiveness. The Central Bank primarily is and usually has important financial stability functions. The structure of those roles, the responsibilities given and the range of other functions allocated vary from countries. The monetary policy function clearly dominates the public perception of central banking activities, notwithstanding the continuation of numerous other functions of great significance to the effectiveness of financial systems and monetary exchange. The roles of the central bank can aptly be described in two broad ways i.e. monetary policy and others. Monetary policy decision-making and implementation are the defining characteristics of the central bank. However, there are differences between countries as to how extensive the central banks independent responsibilities are for these aspects of monetary policymaking. As well as setting monetary policy, a Central Bank concerns itself with other important functions. Encouraging and maintaining financial stability is high on a Central Banks objectives list, and there has been an especially keen focus and expansion on this remit in recent years, with the global financial crisis throwing many of the worlds largest economies into a period of unprecedented turbulence. A central bank also includes managing a countrys reserves as one of its responsibilities, essentially holding different currencies in its coffers to act as a buffer in-case of currency fluctuation. The Central Bank also acts as a lender of last resort to the government; this means the central bank has the capacity to provide financial assistance to the government in times of difficulty. This is a role that almost all central banks fulfil, with notable exception being the European Central Bank. Given the above, it is important for the Central Bank to have the authority and the ability to take effective actions to achieve its objectives. THE AUTONOMY, INDEPENDENCE & GOVERNANCE STRUCTURES OF CENTRAL BANKS Ojo (2000) posited that the role of an autonomous central bank in promoting macroeconomic stability has in recent years become a topical international economic

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policy issue although the empirical evidence on the relationship between central bank autonomy and macroeconomic stability proxied by price stability is not conclusive. The prevailing wisdom supports the need to accord a central bank a reasonable degree of autonomy that will give it substantial discretion to conduct its monetary policy in a manner that will help achieve its assumed central mandate of maintaining domestic price stability, defined as a regime of relatively low inflation rate and an environment free of inflation expectations. In the recent past, there have been conscious efforts by governments all over the world to ensure that their Central Banks are independent, not just by legal provisions but also by actions (Smaghi, 2007). This is to ensure that they are able to achieve their main object of price stability. More and more countries in the Organisation for Economic Cooperation and Development (OECD) and beyond have made their central banks independent. In the European Union, central bank independence is a precondition for European countries to be admitted into the Eurpean Union as enshrined in Article 108 of the Treaty establishing the European Community which states that: neither the ECB, nor a national central bank shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The ECB noted that the obligation of member states to ensure the independence of their central banks puts them in an exceptional position, since it obliges the member states to keep the assessment of the level of financial resources and the management of the capital of the national central banks at arms length. The national central bank should not be dependent for its finances on the government, the parliament or any other third party. Empirical evidences suggests that central banks independence is associated with better economic performance, not only in terms of lower inflation rates (which leads to price stability in the long run), but also in terms of less output variability. There exists a negative correlation between central bank independence and inflation. Countries with less independent central banks are more likely to develop high rates of inflation when hit by adverse economic shocks. According to Martnez-Resano (2004), central bank independence has been typically judged as characterizations of the following degrees of independence: 1. Legal independence 2. Goal independence 3. Operational independence 4. Financial independence Legal independence ensures that the establishment of the central bank is etched in law and is undisputed. In some countries, informal arrangements have worked well but most countries have found that stronger, more formal mechanisms work better. The European Central Bank and the Bank of England are two noteworthy examples of central banks that have anchored their monetary policy-making law in a manner that ensures continuity in policy-making. In Nigeria, the Central Bank of Nigeria Act 2007 established the Central Bank of Nigeria as an independent body. Goal independence refers to the central banks ability to determine the goals of policy without the direct influence of the fiscal authority. Section 2(a) of the CBN Act of 2007 dictates that the principal objects of the bank shall be to ensure monetary and price stability Operational independence refers to the central banks ability to freely adjust its policy tools in pursuit of the goals of monetary policy, thereby leading to operational effectiveness.

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According to Knight (2005), there are three aspects of operational independence: the decision-making process; the appointment of senior officials; and access to sufficient financial resources for the central bank to carry out its work. Best practices suggest that the decision-making process should be collegial so as to take advantage of a wider range of experience and expertise. Collegial decision-making also gives the decisions greater legitimacy. It is for all these reasons that the use of monetary policy committees has become the norm. To achieve operational independence, the board must be constituted in a manner that ensures its impartiality, continuity and competence. The procedures for appointing and dismissing policymakers are as important as the terms of office. Financial independence is vital to the effectiveness of a central bank. The central bank must have the full responsibility to conduct its financial affairs without interference from the government. This must include the formulation and execution of its own expenditure budget. Without this, it is much harder for a central bank to sustain the high level of performance that is desirable (Knight, 2005). Without proper financial means, a central bank cannot credibly operate independently; it would be under a sword of Damocles if it must source for the funding of its operating expenses from the government (Smaghi, 2007). Smaghi (2007)further identified four aspects of a central banks financial independence: 1. The right to determine its own budget 2. The application of central bank-specific accounting rules 3. Clear provisions on the distribution of profits 4. Clearly defined financial liability for supervisory authorities Where the above four aspects are absent, central banks are vulnerable to outside influence from the government. The credibility of the central bank will be at stake, which will erode the confidence of the public in its ability to maintain price stability. In the United States, the Federal Reserve System is self-financing, its earnings stemming principally from interest income on the portfolio of government securities it holds to conduct open market operations. Financing itself internally means that the Federal Reserve is not dependent on Congress for annual appropriations and is therefore insulated from pressures that might otherwise flow from the "power of the purse." McDonough (2002) After examining the role of central banks and the importance of independence; it is pertinent that a survey of selected central bank governance structures from around the world is made. The choice of countries is influenced by economic status and jurisdiction. A total of eight central banks has been deemed appropriate for this purpose with a split between advanced economies (USA, UK, Canada and Australia) and emerging /developing economies (Ghana, South Africa, Kenya and Nigeria). The Central Bank of Nigeria will be examined in more detail. United States of America The Federal Reserve is saddled with the central banking responsibility in the US. It was established by the Federal Reserve Act (1913). The Federal Reserve system is governed by a 7-man Board of Governors who are appointed by the President and confirmed by the Senate for a 14-year term each, while the Chairman and the Vice Chairman, who are selected from the Board serve 4 years each as appointed and confirmed by the President and Senate respectively.

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The Federal Reserve System consists of twelve Federal Reserve Banks operating independently from different districts across the country. Each Reserve Bank is owned by the member banks of the district that pay in capital which cannot be traded and cannot be pledged. A 9-member Board of Directors is appointed selected from each district's member banks, businesses, and the public, in a non-political process. The Board of Governors oversees the twelve federal Reserve Banks and their budgets. The Federal Reserve System consists of a Federal Open Market Committee (FOMC) in charge of monetary policy decisions. All seven members of the Board of Governors have voting rights, while 5 of the presidents of the 12 regional Reserve Banks have voting rights. The New York Federal Reserve Bank has permanent voting rights while the four outstanding voting rights rotate among the other 11 banks. All 12 bank are however part of monetary discussions, with majority maintained by the Board of Governors. It is important to note in the submission of McDonough (2002) that the debate surrounding the creation of the FOMC pitted some members of Congress who wanted only the Presidentially-appointed governors in Washington to set monetary policy against others who wanted the regional Reserve Banks to continue control of the Committee. The compromise reached allows all seven governors and the president of the Federal Reserve Bank of New York a permanent vote on the Committee but only four of the remaining eleven district bank presidents a vote at any time. This compromise reflects that delicate tension of checks and balances on centralized authority, which lies at the core of the Federal Reserve System today.

United Kingdom The central bank of the United Kingdom is known as the Bank of England (BoE), and the framework for its governance and accountability is contained in the 1998 Bank of England Act, amended in certain aspects in the 2009 Banking Act. At the top of the governance structure sits the Court of Directors, which is responsible for the overall objectives and strategy of the bank. The members of the Court are appointed by the Crown, and the Court is constituted of the Governor, two Deputy Governors and 9 nonexecutive directors. The directors are appointed for three years, while the governors are appointed for five years. One of the directors is designated Chairman of Court by the Chancellor of the Exchequer. The Governor oversees the Banks activities; while the Court, in addition to strategy, is responsible for the Banks budget, capital project, financial framework, management policies, management of the Banks balance sheet, succession planning, etc. Canada The Bank of Canada Act, as amended in 2008, sets the legislative framework for the Bank and spells out the governance of the Bank. The Board of Directors has the responsibility for the administration and management of the Bank with respect to strategic planning, budget matters, financial and accounting, risk management, human resources, and other internal policies. The Board is comprised of the Governor, senior Deputy Governor and 12 independent Directors. The Bank of Canada also has a Governing Council, which is in charge of policy formulation. Membership includes the Governor, Senior Deputy Governor and four Deputy Governors. Its mandate includes strategy, monetary policy and the promotion of a sound and stable financial system. The bank is not a government department and conducts its business with considerable independence. Australia

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Australias central bank, known as the Reserve Bank of Australia (RBA), was established by The Reserve Bank Act (1959). The Bank maintains two Boards: the Reserve Bank Board, responsible for monetary policy and financial stability, and the Payments System Board, with responsibility for matters relating to the payments system. The Reserve Bank Board has nine members: three ex officio members the Governor, the Deputy Governor and the Secretary to the Treasury and six non-executive members, who are appointed by the Treasurer. The Governor and Deputy Governor serves as Chairman and Vice-Chairman, and are appointed for terms of up to seven years, and are eligible for reappointment. The non-executive members are appointed for terms of up to five years. Bank of Ghana The Central Bank of Ghana was established in 1957. The governing body of the Bank is the Board of Directors as stipulated in the Bank of Ghana Act, 2002 (Act 612). The governing board of the Bank of Ghana is a Board of Directors consisting of 12 Members and made up of The Governor, 2 Deputy Governors, one representative of the Ministry of Finance and 8 other directors appointed by the President of the country in consultation with the Council of State. The Governor of the Bank is the Chairman of the Board. The Governor and the Deputy Governors are appointed by the President of Ghana in consultation with the Council of State for a term of four years each and are eligible for re-appointment; while the non-executive directors hold office for a period of three years and are also eligible for re-appointment. South African Reserve Bank The South African Reserve Bank opened for business on 30 June 1921, making it the oldest central bank in Africa. The first banknotes were issued to the public by the Bank on 19 April 1922. The SA Reserve Bank Act, 1989, as amended, provides for a Board of Directors consisting of 15 directors. Among them are the Governor and three Deputy Governors; who are appointed by the President of the Republic of South Africa, after consultation with the Minister of Finance and the Board, initially for 5-year terms. On reappointment, the terms may be less than five years. Four other directors are appointed by the President, after consultation with the Minister, for 3-year terms. The remaining seven directors, of whom one needs to have knowledge and skill in the field of agriculture, one in the field of labour, one in the field of mining, two in the field of industry and two in the field of commerce or finance, are elected by shareholders at an ordinary general meeting (OGM) of shareholders. The Chairman of the Board is the Governor of the Bank. The Governor and Deputy Governors manage the daily affairs of the Bank, since they have, in terms of the Act, been tasked with this responsibility. The Central Bank of Kenya The Central Bank of Kenya was established in 1966 through an Act of Parliament - the Central Bank of Kenya Act of 1966. Under the Central Bank of Kenya Act, the responsibility for determining the policy of the Bank, other than the formulation of monetary policy, is given to the Board of Directors. The Monetary Policy Committee of the Bank is responsible for formulating monetary policy. The Board of Directors of the Bank consists of eight members: the Governor, who is also its Chairman; the Deputy Governor, who is the deputy chairman; the Permanent Secretary to the Treasury who is a non-voting member; and five other non- executive directors.

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All members are appointed by the President to hold office for a term of four years and are eligible for reappointment once, provided that a Board member shall hold office for not more than two terms. The executive management team comprises the Governor, the Deputy Governor and fifteen heads of department who report to the Governor. The Governor has the authority to incur expenditure for the Bank within the administrative budget approved by the Board. Within three months after the close of each financial year, the Bank is required to submit to the Minister a report on the Banks operations throughout that year, together with the balance sheet and the profit and loss account as certified by the auditors appointed by the Bank and approved by the Minister. OVERVIEW OF THE CBN ACT 2007 The CBN Act, 2007 confers legal autonomy on the Bank to achieve monetary stability. The Act also gives the CBN full discretion to implement its monetary policy without interference from the government. For instance, there is a clear limit placed on its lending to the government to a level that is consistent with its monetary policy and targets. Two other factors that ensure the Banks economic autonomy are its financial condition and accountability. It is imperative that for the Bank to act independently in the conduct of its monetary policy, it should not depend on the government for subvention or financial support of any kind. Section 6(3)(a) provides that the Board shall be responsible for the consideration and approval of the annual budget of the Bank. Budgeting is in the ordinary course of the Banks duties and the fact that there is no supervisory body to review the budget does not make the CBN unaccountable. The process of the appointment of the Governor of the CBN, its Deputy Governors and Directors go through the National Assembly for confirmation. It is therefore inappropriate to require that the Deputy Governors be excluded from membership of the Board. It is pertinent to note the following: a. Sections 6 (1) and (2) of the CBN Act 2007, provide for twelve (12) members of the Board; five (5) internal and seven (7) external. The Governor and the four (4) Deputy Governors comprise the internal membership. There are seven (7) external non-executive members, among whom there are two (2) institutional members. b. Consistent with the provisions of the CBN Act 2007, the non-executive members constitute a clear majority of the Board of the CBN. c. All members of the CBN Board are appointees of the President of the Federal Republic of Nigeria and are confirmed by the Senate. They conduct themselves with the requisite sense of responsibility d. The CBN Board is dominated by appointees from outside the Bank, who are appointed in strict compliance with the provisions of the CBN Act. IMPLICATIONS OF THE PROPOSED CBN (AMENDMENT) BILL 2012 The Central Bank of Nigeria Act (Amendment) Bill 2012 which is currently under discussion, seeks to amend some specific provisions of the Central Bank of Nigeria Act No 7 of 2007 (the Act) which relates to power on foreign currencies transactions, governance structure and the financial autonomy of the Central Bank of Nigeria (CBN) Prohibition on transactions in foreign currencies in Nigeria The Bill seeks to amend S.26 of the Act which relates the power to buy and sell Nigeria currency by prohibiting the use of foreign currencies as a means of exchange for goods and services and other transactions in market, supermarket, hotels, restaurants, airports and other places of business in Nigeria except by authorised dealers as duly licensed by the Central Bank of Nigeria. This implies that:

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The position of the Naira as the only legal tender in Nigeria will be strengthened. Monitoring and accountability of the foreign currencies in circulation will be enhanced It will reduce the pressure of inappropriate high pricing of goods which could be inflationary.

Composition of the Board and related Governance matters In particular, Section 2 of the Bill seeks to amend Section 6 (2) of the Act, which relates to the composition of the Board of Directors of the Central Bank of Nigeria by: a) Changing the current position under which the Governor of the CBN acts as Chairman of the Board. b) Excluding the Deputy Governors and other Directors from membership of the Board. In its place, the Bill seeks to constitute a Board comprised of: 1 A Chairman, who will be a former Governor of CBN or a Chairman of a Bank or a former Managing Director of a Bank. 2 The Governor. 3 The Permanent Secretary Ministry of Finance. 4 The Accountant General of the Federation. 5 The Permanent Secretary National Planning Committee. 6 A Representative of the Federal Inland Revenue Service not below the rank of Director. 7 A Representative of the Nigeria Deposit Insurance Corporation not below the rank of Director. This implies that, The composition of the Board proposed by the Bill effectively reduces the impact of the CBNs Management on board decisions , as it gives rise to a situation where only one member of its management; the Governor, sits on the CBNs 7member board. This can be distinguished from the current situation where five members of the Management of CBN, in the form of the Governor and Deputy Governors sit on a twelve 12-man board. The Board composition proposed by the Bill increases the number of government representatives on the CBN Board from two (2) to five (5) despite the almost fifty per cent reduction in the board size. Consequently the new composition could give rise to the perception that there is a government majority on the Board. It also effectively introduces a political element through its proposal in relation to the Chairman of the Board and could entrench a CBN that is, by and large viewed as a government agency controlled by government officials. This is capable of undermining the perceived independence of the Central Bank of Nigeria and may lead to unintended consequences. The situation where the Governor acts as Chairman of the Central Banks Board is aligned to international best practices and is designed to support the independence of the Central Bank, such independence, as mentioned previously, includes the authority of the Central Bank to run its own operations without excessive involvement of the government such as in Australia , Belgium, Canada, Germany, Japan and Netherlands, India, Korea and South Africa and also to emerging markets like Gambia, Ghana, Botswana, Zambia and Kenya A survey of 35 central bank boards, in countries at various levels of development revealed that, without exception, the Central Bank Governor act as Chairman of the Boards of these central banks. It is also pertinent that, in Mexico and Korea, there are no external directors, as their Central Bank Boards consist solely of the governor and a number of deputy governors. The proposed amendment will undermine the independence of the CBN in discharging its functions satisfactorily to achieve the desired macroeconomic stability for the growth and development of the economy. After consideration of

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the above salient points, such amendment can be deemed unnecessary and potentially harmful. Many central bank laws set out qualifications for Board members that are designed to reduce the risk of conflicts of interest. Board members can come from different backgrounds but they must not be delegates of special interest groups. Some countries have mechanisms which ensure that a wide range of political interests are involved in the appointment process and so enhance the legitimacy of the Board The ability of the Central bank to speak out, if needed, and possibly in critical terms with respect to economic and budgetary policies, might also be impaired if the Governors, or the other members of the Board are perceived to have a political affiliation, as this might be interpreted as political interference.

Section 3 of the Bill also seeks to amend Section 7(1) of the CBN Act, such that the Deputy Governor that will act for the Governor in his absence will be the most Senior Deputy Governor, rather than the situation under the current act where it is a Deputy Governor, nominated by the Governor. Even though it is appropriate, our view is that this internal mechanism should not be a subject for legislation. Section 4 of the Bill seeks to amend Section 8(3) of the Act which vests the Board with the authority to set the remuneration of the Governor and Deputy Governors, subject to the approval of the President and to replace it with a provision pursuant to which the such authority will no longer be vested in the Board but will now vest in the Revenue Mobilization Allocation and Fiscal Commission, subject to the approval of the President. This will negate the International experts opinions that, in order to attract and retain a corps of professionals to do this sophisticated work that is a part of its operations the Central Bank must be able to offer terms and conditions of employment that are comparable with those available in alternative jobs in both the public and private sectors. The use of a government organization to set salaries would also appear to be in conflict with the requirement for central bank independence and it could create the perception that the government, through that agency, is seeking to gain undue influence over the CBNs executive management. Section 2.2 of the Bill has removed the power of the Board of the CBN to approve the annual budget of the CBN while Section 5 of the Bill proposes the introduction of a new section 48 pursuant to which CBN will be required to prepare and submit its annual budget to the National Assembly. While the proposed clause does not, in its current form, specify that approval to such budget must be obtained from the National Assembly, however, this issue is implied. It is pertinent to note that; Accountability by the CBN goes much deeper than having its budget approved by an independent body. The danger in having a separate body approve the budget is that it would become highly politicized thus leading to adverse effects on the macroeconomic environment and monetary stability. The Central Banks right to determine its own budget was a particularly relevant consideration in determining whether a national central bank was vulnerable to outside influence . Malcolm D Knight of the Central Bank of Brazil, was also of the opinion that: A final precondition for the effectiveness of a central bank is its financial autonomy. This must include giving the central bank full responsibility for the

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formulation and implementation of its own budget. Without this it is much harder for a central bank to sustain the high level of performance that is desirable The central bank must be able to control the size and composition of its balance sheet in order to engage in the transactions needed to achieve its established monetary policy goals. Even where the Central Bank of Nigeria retains the right to approve its own budget, the requirements of Section 50 of the Act, will ensure that it is subjected to the requisite level of accountability, given the requirement that it should transmit its audited accounts to the National Assembly and to formally report thereon to the National Assembly, which Report is subsequently gazetted and made available to the general public. This will therefore ensure that it meets the requirements of accountability. OUR RECOMMENDATIONS Given the above, The Chartered Institute of Bankers of Nigeria on behalf of its members and the Nigerian Banking industry recommend that: The CBN Governor should remain the Chairman of Board of Directors in line with international best practices. The Deputy Governors should continue to be members of the Board of Directors for effective board deliberations on policies for the economy and financial system. This is also in line with international best practices. The diversity in the background of the current Board of the CBN will enhance the robustness of policy decision making process. It is therefore not necessary to reduce the number or populating it with government representatives which will connote undue interference. The Board of Directors of the CBN should continue to be responsible for the formulation its budget, while the CBN should be made accountable to the public through periodic rendition of its activities to the National Assembly. These activities will include its state of finances and its core mandates. This is also in line with international best practices. Since the CBN is required under the law (S.50) to issue reports on its operations to the President and the National Assembly, it remains accountable to Government and thus the status quo should be maintained.

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CONCLUSION In conclusion, it is generally agreed that the current CBN Act is a product of several rigorous efforts to review past policies and laws in other to align with international best practices. Nigeria as an emerging economy cannot afford to be economically retrogressive in its policies especially with the independence and autonomy of the Central Bank of Nigeria in order to guarantee financial stability. Furthermore, in this era of globalization, Nigeria cannot afford not to follow the global trend. A truly independent and autonomous Central Bank of Nigeria has become more imperative for the integration of the Nigerian financial system with the world economy in general. It should be emphasized that instrument autonomy without financial and budgetary autonomy, as obtained in other countries, is meaningless. What is required now is not to erode the financial autonomy of the Central Bank but rather to build and strengthen relationships that would enhance complementarities between the monetary and the fiscal authorities, and indeed, all arms of government. In the light of the foregoing, it is necessary to caution against subjecting the CBN annual budgets to the approval process of the National Assembly, so as not to encumber its operations and effectiveness. Thank you

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SEGUN AINA, OFR, FCIB PRESIDENT/CHAIRMAN OF COUNCIL THE CHARTERED ISTITUTE OF BANKERS OF NIGERIA 28TH MAY 2012

Acknowledgments & Reference Materials

Cukierman, A. 1992. Central Bank Strategy, Credibility, and Independence: Theory and Evidence. Cambridge, MA: The MIT Press. 2. Central Bank of Nigeria Act, 2007 3. Central Bank of Nigeria, Press Release dated May, 3rd 2012 4. Knight, Malcolm D (2005). Features of an effective central bank: some lessons of the past decade. Keynote speech delivered at the 40th anniversary celebrations of the Central Bank of Brazil 5. Lybek, Tonny (2004). Central Bank Autonomy, Accountability and Governance: Conceptual Framework, Occasion Paper number 2257103 v3, IMF. (Washington: International Monetary Fund). 6. Mahadeva L. and Sterne G, (2000). Monetary policy frameworks in a global context, Routledge, London. 7. Martnez-Resano J. Ramn (2004). Central Bank Financial Independence. Madrid: Banco de Espaa 8. McDonough W.J (2002) The Importance of Central Bank Independence In Achieving Price Stability, Remarks before the National Bank of Poland 9. Ojo, M.O. The Role of the Autonomy of the Central Bank of Nigeria in promoting Macroeconomic Stability. 10. Smaghi, Lorenzo Bini (2007). Central Bank Independence: from theory to practice. Speech delivered at the ECB conference on Good Governance and Effective Partnership, Budapest, Hungarian National Assembly 1.

Web References
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Bank of Ghana Act 2002 (Act 612): http://www.bog.gov.gh/index.php?option=com_content&view=article&id=130%3Abank-ofghana&catid=64&Itemid=137 http://www.bog.gov.gh/index.php?option=com_content&view=article&id=77&Itemid=138 South African Reserve Bank Amendment Act, 2010 http://www.resbank.co.za/AboutUs/History/Pages/History-Home.aspx http://www.resbank.co.za/AboutUs/Structure/Pages/BoardOfDirectors.aspx http://www.resbank.co.za/AboutUs/Mandate/Pages/Mandate-Home.aspx The Central Bank of Kenya Act as Amended 2011. CHAPTER 491 http://www.centralbank.go.ke/about/Default.aspx# http://www.federalreserve.gov/ http://www.bankofengland.co.uk/Pages/home.aspx http://www.bankofengland.co.uk/publications/Documents/annualreport/2011/2011full.pdf http://www.bankofcanada.ca/ http://www.rba.gov.au/ http://www.cenbank.org/out/Publications/efr/RD/2000/efrVol38-1.pdf

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