The Chartered Institute of Bankers of Nigeria (CIBN) has advocated for upward review of the tenure of governor of the Central Bank of Nigeria (CBN) from five to 10 years.
Speaking while presenting a valedictory address, Friday, the outgoing President and Chairman of Council, CIBN, Dr. Segun Aina, said, the present five year term causes frequent changes in policy that are unfavorable to the nation’s economy.
According to him, CBN is a special and a unique organisation that requires stability and consistency in its operations and any tenure that is less than 10 years is too short for a governor to make meaningful long-term impact on the overall economy of the country.
Aina gave the example of Malaysia which he said had a CBN governor whose tenure in office lasted for 14 years.
“There is really nothing much a governor can achieve within five years because a lot of policies would be left halfway and a new person might likely have a new approach in solving similar problem which creates distortions in the economy.
“We need to ensure that there is consistency in policy formulation, so that every 5 years we will not be having major changes in the banking industry which has the potential to destabilize the economy,”Aina stated.
According to him, regulatory leadership is very essential for now and the future, and various countries have in recent times appointed the Head of their financial sector regulatory institutions such as Central Bank Governor through an open, transparent and competitive process.
“In future , it is recommended that we should consider drawing up a thorough job and person profile and advertising vacant regulatory leadership positions to allow internal, local and international candidates to apply for the job as is done in other jurisdictions like the United Kingdom”, Aina said.
While also giving recipe on how to safeguard banks from crisis and collapse, the CIBN president whose tenure ended over the weekend called on banks in Nigeria to pay more attention to risk management.
According to him, continuous review and evaluation of capital adequacy requirements is essential to ensure there is enough cushion to absorb shocks when they occur.
He further said that Banks in Nigeria have to step up their efforts in educating their customers on the various changes regarding their products, policies and even the use of technology in order to be able to meet up with new developments in the world of banking.
“it is strongly recommended that banks should double their efforts in the capacity development of their staff and employees of banks must be encouraged to be professionally qualified and licenced in their various fields so they can be subjected to the self-regulatory and disciplinary mechanisms of the professional bodies,” he suggested.