Economists, IMF Raise Concern Over Senate Move to Amend CBN Act

Economic experts have raised concerns over a bill before the Senate seeking to amend the Central Bank of Nigeria (CBN) Act, 2007, saying it may disrupt the apex bank’s power as a monetary regulator.

Senator Mukhail Tokunbo Abiru (Lagos-East) sponsored the bill and was co-sponsored by all 41 members of the Senate Committee on Banking, Insurance, and Other Financial Institutions.

The amendment sought to address the changing dynamics of the financial industry and align Nigeria’s regulatory framework to global standards.

“The bill seeks to amend the Central Bank of Nigeria Act to address the changing dynamics of the financial services industry and aims to enhance monetary policy, ensure financial stability, and foster a regulatory environment conducive to sustainable economic growth as well as align our regulatory framework with global best practices for the continued resilience of the financial services industry,” the bill read in part.

Meanwhile, the International Monetary Fund (IMF), in its recently released Article IV consultation with Nigeria, recommended caution regarding amendments to the CBN Act, stating that “it might weaken the Central Bank’s autonomy.”

Key Aspect the Legislators Seek to Amend

• The establishment of a 7-member Coordinating Committee for Monetary and Fiscal Policies to be chaired by the Minister of Finance
• Tenure of CBN Governor and Deputy Governors to be set at a single non-renewal term of six years for the Governor and the Deputy Governors
• Appointment of a minimum of one career staff of the Bank in the Committee of Governors and appointment of at least one female among the External Directors
• To establish the position of Chief Compliance Officer in the rank of a Deputy Governor, who reports directly to the Board and may occasionally be summoned to appear before the relevant committee of the National Assembly
• Limit to Temporary Advances to the federal government
• Issuance of New Legal tender to replace existing ones and because the Governor of the Bank also serves as the Chairman of the Board
• The bill proposes that the Board Committees should be headed by Non-Executive Directors instead of the Deputy Governors.

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