A financial expert, Dr. Folashade Adeyemo has advised the Central Bank of Nigeria (CBN) to submit itself to international organisations for regular monitoring, to be able to discharge its duty efficiently.
Adeyemo took this position in her new book, “Banking Regulation in Africa: The Case of Nigeria and Other Developing Economies” which is set for virtual launch next month.
According to her, where apex banks should ideally discharge their duties independently, the poor performance of CBN over time required that it should be watched and guided by external body.
Adeyemo in the book also faulted CBN’s reactive approach to solving crisis.
She said, “The regulators must pay closer attention to having a proactive approach to the act of regulation, rather than adopting a reactive measure for the instances of a banking crisis or failure”.
She also stressed the need for Nigerian regulators to cultivate a clear commitment to the ongoing improvement of the regulatory framework to allow for a sustainable and viable economy.
The author in the book detailed the historical analysis of Nigeria’s banking regulation trajectory, which included the creation of Nigeria’s first banking Act, Bank Ordinance in 1952, induced by the Paton Report and the deregulation of the Nigerian banking sector under the then President Babangida in 1986.
Others are the banking consolidation in 2004 which saw a substantial development to the Nigerian banking system; and the introduction of the Banks and Other Financial Institution Act 2020.
She also provided a holistic examination of banking regulation in Africa which she specifically explored the banking regulatory architectures of South Africa and Kenya, arguing that both have evolved over time.
“Similar to Nigeria, South Africa has an apex bank (South African Reserve Bank), and two other regulators: the Prudential Authority and the Financial Sector Authority. In the case of Kenya, this country has a fragmented framework as it comprises of several regulators, each having its distinct responsibility.”
She concludes that all the all three African regulatory models boast distinctive qualities which may be broadly categorized as important and necessary features of an effective regulatory model.
She however stressed the need for Nigeria to adopt a proactive regulation to boost efficiency.
She also posited that a specialist court be created to deal specifically with Nigerian banking law mattes.
“This proposed court would function similarly to the court established by the Failed Banks (Recovery of Debts) and Financial Malpractices Decree 1994”, she said.
