The decision of the Central Bank of Nigeria, CBN, to relocate certain departments from its Abuja headquarters to Lagos has given rise to intense debates and controversies in recent weeks. While opinions regarding this move vary, with some, including the former Emir of Kano Sanusi Lamido, viewing it as a wise choice due to Lagos’ superior infrastructure capacity, others, primarily from the Northern political class, express concerns about potential disparities between the North and South.
Lagos is the 19th best city in the world, according to the latest report of the world’s 50 best cities, which is based on the Time Out Index, created from a survey of more than 20,000 city dwellers around the world, along with its own network of editors. Given the significance of relocating a government institution, it is essential to carefully examine the legal implications of this decision and ensure compliance with existing laws and regulations.
Advantages of Relocating the Central Bank of Nigeria to Lagos:
Strengthening Nigeria’s Financial Sector: The CBN is currently located in the nation’s capital, Abuja. However, there are compelling reasons why the central bank should be relocated to Lagos, the commercial, business, and financial capital of Nigeria. This relocation would align Nigeria with global best practices and provide numerous benefits for the country’s financial sector. To substantiate the argument for moving the CBN to Lagos, we can refer to several examples from around the world. In the United States, Washington D.C., serves as the capital, while New York City is recognised as the commercial and financial capital. Similarly, Ottawa is the capital of Canada, but Toronto holds the title of business and financial capital. These examples demonstrate the rationale behind separating the administrative and commercial functions of a nation.
Even within Africa, we find instances where the commercial centre differs from the capital. In South Africa, Pretoria is the capital, while Johannesburg is the commercial capital. In Cote d’Ivoire, Yamoussoukro is the capital, but Abidjan holds the status of the commercial and business capital. Similarly, in Benin Republic, Port-Novo is the capital, while Cotonou serves as the commercial centre. Applying this logic to Nigeria, it becomes evident that the CBN should be located in Lagos, given its position as the commercial, business, and financial hub of the country. Lagos is home to a significant portion of Nigeria’s banking industry and hosts numerous financial institutions. According to a report by the African Development Bank, Lagos accounts for over 50% of Nigeria’s commercial banks and has the highest concentration of financial institutions in the country. This concentration creates a robust ecosystem for the financial sector, allowing for enhanced collaboration and growth.
Moreover, Lagos houses Nigeria’s largest stock exchange, the Nigerian Stock Exchange, NSE. The NSE plays a crucial role in capital mobilisation and trading securities, making it an integral part of the country’s financial landscape. By locating the CBN in close proximity to the NSE, better coordination and synergy can be achieved between the two entities. This would result in more efficient regulation and monitoring of the capital markets, leading to increased investor confidence and economic growth. In addition, Lagos carries significant economic clout, contributing a substantial portion to Nigeria’s GDP and acting as a driver of job creation.
With a population of over 20 million people, Lagos serves as a vibrant and dynamic city that attracts both domestic and foreign investment. By relocating the CBN to Lagos, the central bank would be at the centre of Nigeria’s economic activity. This proximity would facilitate better monitoring of economic developments and enable the CBN to respond swiftly and effectively to emerging challenges and opportunities. Furthermore, the CBN already has a significant presence in Lagos, with several operational offices and branches situated in the city. Consolidating the central bank’s operations in Lagos would streamline its activities and reduce the administrative costs associated with maintaining separate offices in Abuja and Lagos.
Legal Considerations for Relocating the Central Bank of Nigeria from Abuja to Lagos: Relocating the CBN from the nation’s headquarters in Abuja to Lagos would have legal implications that need to be carefully considered. As with any significant decision involving the movement of a government institution, a thorough analysis of the legal framework is necessary to ensure compliance with existing laws and regulations. One of the main legal considerations pertains to the establishment of the CBN itself.
The CBN Act of 2007 provides the legal framework for the operations of the central bank in Nigeria. Section 1(1) of the Act defines the establishment of the nation Apex bank as “the central bank of Nigeria”. Furthermore, Section 3 states that the “head office of the bank (CBN) shall be located anywhere in the Federal Capital Territory (Abuja).” Relocating the CBN to Lagos would involve amending the CBN Act to officially recognise Lagos as the new principal office location of the bank. This would require a legislative process involving the National Assembly to enact the necessary amendments. The proposed amendments would need to clearly state the reasons for the relocation and address any potential legal issues that may arise from the move.
Additionally, the relocation would raise questions regarding the interpretation of the provision in the Nigerian Constitution that designates Abuja as the nation’s capital. Section 298 of the 1999 Constitution states that “the Federal Capital Territory, Abuja shall be the Capital of the Federation and seat of the Government of the Federation.” Any relocation of a major government institution like the CBN would need to be consistent with this constitutional provision.
Furthermore, the CBN Act provides guidelines for the governance and management of the central bank, including the structure and functions of its board of directors. Section 6 of the Act outlines the composition of the board, which includes the governor of the CBN, the deputy governors, and other appointed members.
Relocating the CBN to Lagos would necessitate potential changes to the composition of the board, including the appointment of new members who are located in Lagos or nearby areas. Legal implications would also extend to the staff of the CBN, particularly those who might face challenges with relocation or commuting between Abuja and Lagos. Employment contracts, compensation packages, and other related legal matters would need to be reviewed and potentially renegotiated to accommodate the changes resulting from the relocation.
Moreover, the existing legal framework may also have provisions related to the physical infrastructure and security arrangements of the CBN. Relocating the central bank would require assessing the adequacy of the existing facilities and the infrastructure in Lagos to ensure the smooth functioning and security of the institution.
In conclusion, it is evident that relocating the Central Bank of Nigeria to Lagos is a logical and beneficial move for Nigeria’s financial sector. Lagos serves as the commercial, business, and financial capital of the country, and locating the CBN in this vibrant city would align Nigeria with global best practices and foster better coordination between the central bank and financial institutions. The concentration of financial institutions, the presence of the Nigerian Stock Exchange, and Lagos economic significance all contribute to the compelling case for moving the CBN to Lagos. It is a strategic step that would enhance the central bank’s ability to promote price stability, regulate the financial sector, and drive economic growth in Nigeria.
Additionally, relocating the Central Bank of Nigeria from Abuja to Lagos would entail careful consideration of the legal implications. Amendments to the CBN Act and compliance with the Nigerian Constitution would be necessary. Furthermore, the composition of the board, employment contracts, and infrastructure considerations would also need to be addressed. It is crucial that thorough legal analysis and due diligence take place to ensure a seamless transition while complying with the legal framework in place.
Source | Vanguard
