Naira Appreciates as CBN Limits Tenure of Banks’ Chiefs

The Nigerian Naira appreciates moderately at investors’ and exporters’ foreign exchange window on Friday following the Central Bank of Nigeria (CBN) review of local banks’ executive and non-executive tenures.

In a circular obtained by MarketForces Africa, the apex bank said its decision is to strengthen corporate governance practices in the banking sector amidst uncertainties in the implementation of its new naira redesign policy.

At the close of business on Friday, the Naira was exchanged at N416.17 to the United States (US) dollar at the Investors and Exporters window.  The FX spot represented a 0.03 per cent gain when compared with the N461.33 it exchanged on Thursday.

The open indicative rate closed at N461.25 to the dollar on Friday. An exchange rate of N462.03 to the dollar was the highest rate recorded within the day’s trading before it settled at N461.17.

The Naira sold for as low as N446 to the dollar within the day’s trading. A total of 153.30 million dollars was traded at the official Investors and Exporters window on Friday.

In a related development, the CBN has capped the cumulative tenure limit of executive directors/ Deputy Managing Directors, Managing Directors and Non-executive directors across the banking industry at 20 years.

Recall that in 2010, the erstwhile governor of the CBN, Sanusi Lamido Sanusi, had set 10 years limit for Nigerian banks’ top executives. Many bank MDs whose tenure elapsed the 10-year stipulation as of July 31, 2010, were sacked.

According to the circular, the apex bank said it revised the regulatory requirement for the tenure of executive and non-executive of deposit money banks and other financial holding companies as part of efforts to strengthen corporate governance practices in the sector.

It said the tenure of EDs, DMDs and MDs shall be in accordance with the terms of their engagements approved by respective banks’ boards of directors. With the reviewed tenure, no bank executive is expected to surpass 20 years from the time of appointment as an executive or non-executive director to deputy managing director and managing director