By Babajide Komolafe

President, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Segun Aina has advocated the appointment of the governor of the Central Bank of Nigeria based on competitive process.

Aina also said that CBN governors should be allowed to serve for a minimum of two terms of five years each to enhance stability and policy continuation.
He made this call while delivering the 2014 Presidential Address of the Institute in Lagos.

Aina noted that the use of competitive process for appointment of the leadership of financial sector regulatory bodies is becoming the global trend.

He said, “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. We must continuously strive to get the best qualified individual for such sensitive and very important positions like the CBN Governor, and Deputies, MD/CEO of NDIC etc.

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.

“We now have a situation in the UK where its Central Bank is headed by a Canadian national, the first time in the 319 year history that the Bank of England will be headed by a non-UK citizen.   This process should surely produce the most suitably qualified candidate. Other considerations can still be applied at the last stage of the appointment process from the short list of qualified candidates.

“Additionally, in order to enhance stability and continuity in leadership, it is recommended that a CBN Governor should be allowed to serve for a minimum of     two  terms of five years each as obtains in developed economies. The last three CBN Governors served for only a term of five years which does not augur well for stability and continuity.”

Aina also predicted the introduction of more reforms in the banking industry aimed at making the banks stronger.

He said, “Although there have been significant major reform measures undertaken by the regulatory agencies in the country, such as the banking consolidation, establishment of the Asset Management Corporation of Nigeria (AMCON), risk-based supervision for banks, introduction of the International Financial Reporting Standards (IFRS), transformation of the payment system through the cashless policy, adoption of a common year end, issuance of codes in corporate governance, and review of the universal banking model.”