Former President, Chartered Institute of Bankers of Nigeria (CIBN), Dr Segun Aina, on Saturday urged the Federal Government to review the tenure of Central Bank Governor from five to 10 years.
Aina, who made the suggestion while delivering his valedictory address in Lagos, said that the five-year tenure was inadequate for a serving governor to implement policies that would drive the banking sector.
According to him, frequent policy changes will hinder the growth of the nation’s ailing economy, adding that the CBN, as the apex bank with the mandate to ensure stability in the system, should be consistent in its operation.
Aina observed that any tenure for the CBN governor that was less than 10 years, could lead to inconsistency in policy implementation and unfavourable national development.
He said countries like Malaysia, whose Central Bank governor has a 14-year tenure, had recorded tremendous economic growth and development due to stability in the system.
“There is really nothing much a governor can achieve within five years because a lot of policies will be left halfway. 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 formulations,” Aina said.
He explained that five years were not enough to tackle major changes in the banking sector, adding that tenure elongation had the potential to stabilise the economy.
Aina said regulatory leadership was very essential, and called for the adoption of open, transparent and competitive process in the appointment of CBN governor, stressing that the system of appointment should be made more open so that interested candidates could apply.
The former CIBN president called on banks to pay more attention to risk management, adding that continuous review and evaluation of capital adequacy requirements was essential to absorbing shocks in the system.
He further said that banks must step-up efforts to educate customers on the various changes regarding their products, policies and technology.
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