Banking & Finance

Central Bank of Nigeria (Establishment) Act 2007

Operational independence for CBN — sets the bank's mandate, governance, and Ways and Means framework.

Signed
2007-05-25
Status
In force

1 Background

The CBN Act 2007 modernised the central bank's governance — granting operational independence, codifying the Monetary Policy Committee's mandate and structure, and setting the Ways and Means lending framework (advances to the federal government). Section 38 of this Act has been politically contentious — it caps Ways and Means advances at 5% of prior-year federal revenue, a limit the previous administration repeatedly exceeded before the 2023 securitisation.

2 Key provisions (5)

01
Operational independence of CBN from political interference
02
MPC mandate and composition codified
03
Ways and Means cap at 5% of prior-year federal revenue (Section 38)
04
Currency issuance authority
05
Bank-resolution framework (later expanded by BOFIA 2020)

3 What changed in practice

Ways and Means was massively exceeded 2015-2022; securitised to long-term bond in 2023
2025 Tinubu administration has so far stayed within the Section 38 limit

4 Who it affects

CBNFederal governmentBanks

5 What it repealed / replaced

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