The legal backing for monetary policy by the Bank derives from the various statutes of the bank such as the CBN Act of 1958 as amended in CBN Decree No. 24 of 1991, CBN Decree Amendments 1993,No. 3 of 1997,No. 4 of 1997,No. 37 of 1998,No. 38 of 1998,1999 and CBN Act of 2007.
Section 12 Sub-sections (1) to (5), CBN Act of 2007 (Ammended)
In order to facilitate the attainment of price stability and to support the economic policy of the Federal Government, there shall be a Committee of
the Bank known as the Monetary Policy Committee (in this Act referred to as "the MPC")
The MPC shall consist of -
the Governor of the Bank who shall be the Chairman
Naira notes and coins are printed/minted by the Nigerian Security Printing and Minting Plc (NSPM) Plc and other overseas printing/minting companies and issued by the Central Bank of Nigeria (CBN). At the currency printing works of the NSPM Plc, quality is meticulously controlled throughout every process of currency production. This guarantees that every note issued meets the required standard. The CBN maintains an office called Mint Inspectorate in the premises of the NSPM Plc to maintain security and quality of Naira notes and coins.
Currency is issued to deposit money banks through the branches of the CBN, and old notes retrieved through the same channel. Currency deposited in the CBN by the banks are processed and sorted to fit and unfit notes in line with the clean note policy. The clean notes are re-issued while the dirty notes are destroyed.
Development financing is one of the requirements for sustainable economic growth in any economy. The supply of finance to various sectors of the economy will promote the growth of the economy in a holistic manner and this, will make development, welfare improvement to proceed at a faster rate.
The Central Bank of Nigeria development finance initiatives involve the formulation and implementation of various policies, innovation of appropriate products and creation of enabling environment for financial institutions to deliver services in an effective, efficient and sustainable manner. The initiatives are mainly targeted at agricultural sector, rural development and micro, small and medium enterprises.
Financial inclusion has continued to assume increasing recognition across the globe among policy makers, researchers and development oriented agencies. Its importance derives from the promise it holds as a tool for economic development, particularly in the areas of poverty reduction, employment generation, wealth creation and improving welfare and general standard of living.
A survey conducted in Nigeria in 2008 by a development finance organization, the Enhancing Financial Innovation and Access revealed that about 53.0% of adults were excluded from financial services. The global pursuit of financial inclusion as a vehicle for economic development had a positive effect in Nigeria as the exclusion rate reduced from 53.0 % in 2008 to 46.3 % in 2010.
The payments system plays a very crucial role in any economy, being the channel through which financial resources flow from one segment of the economy to the other. It, therefore, represents the major foundation of the modern market economy. Essentially, there are three pivotal roles for the payments system, namely: the Monetary Policy role, the financial stability role and the overall economic role.
The Nigerian Payments System witnessed remarkable achievements in the recent past, with the introduction of a number of initiatives under the Payments System Vision 2020
Financial Policy and Regulation department develops and implements policies & regulations aimed at ensuring financial system stability. It also
licenses & grants approvals for banks and other financial institutions.
Banking Supervision Department carries out the supervision of Deposit money banks and Discount houses while Other Financial Institutions Supervision Department supervises other financial institutions.
The CBN in April 1994 undertook to facilitate a formal framework for the co-ordination of regulatory and supervisory activities in the Nigerian financial sector by establishing the Financial Services Coordinating Committee (FSCC) to address more effectively, through consultations and regular inter-agency meetings, issues of common concern to regulatory and supervisory bodies.
On 27th May, 1994, the name of the Committee was changed to Financial Services Regulation Coordinating Committee (FSRCC). The Committee was accorded legal status by the 1998 amendment to Section 38 of the CBN Act 1991 and formally inaugurated by the Governor of the CBN in May 1999. http://www.fsrcc.gov.ng/
The West African Currency Board was responsible for issuing currency notes
in Nigeria from 1912 to 1959. Prior to the establishment of the West African Currency
Board, Nigeria had used various forms of money including cowries and manilas.
On 31st March, 1971, the then Head of State, General Yakubu Gowon announced
that Nigeria would change to decimal currency as from 1st
January, 1973.The major currency unit would be called Naira which would be
equivalent to ten shillings: the minor unit would be called kobo; 100 of which
would make one Naira. The decision to change to decimal currency followed the
recommendations of the Decimal Currency Committee set up in 1962 which submitted
its report in 1964.
The change that took place in January,
1973 was a major one and this involved both currency notes and coins. The
major unit of currency which used to be £1 (one pound) no longer exists
and the one Naira which is equivalent to 10/- (Ten shillings) has become the major
(Twenty Naira) bank-note was the highest denomination to be introduced so
far, and its issue became necessary as a result of the growth of incomes in the
country; the preference for cash transactions and the need for convenience.
The N20 (Twenty Naira) bank-note
is the first currency note in Nigeria bearing the portrait of a Nigerian citizen,
in this case, the late Head of State, General Murtala Ramat Muhammed (1938-1976)
who was the torch bearer of the Nigerian Revolution of July, 1975.
He was declared a national hero on the 1st of October,1978. The note was issued
on the 1st Anniversary of his assassination as a befitting tribute to a most illustrious
son of Nigeria. On 2nd of July, 1979, new currency notes of three denominations,
N5, and N10
were introduced. These notes are of the same size i.e., 151 x 78 mm as the N20
note issued on the 13th February, 1977. In order to facilitate identification,
distinctive colors which are similar to those of the current bank-notes of the
various denominations have been used. The notes bear the portraits of three eminent
Nigerians who were declared national heroes on the 1st of October, 1978. The engravings
at the back of the notes reflect cultural aspects of the country. In 1992, both
the 50k and N1
Notes were coined. In response to expansion in economic activities and to
facilitate an efficient payments system, the N100,
bank-notes were introduced in December 1999, November 2000, April 2001 and
October, 2005 respectively.
Currency in Circulation
The above figures the last 12 captured months figures and are in millions