By Emmanuel Nduka
The Nigerian Senate in a significant move to reshape the country’s financial landscape, has proposed a bill to strip the Central Bank of Nigeria (CBN) of its final decision-making power in setting interest rates.
According to the provisions of the bill, authority is to be transferred to a newly proposed Coordinating Committee for Monetary and Fiscal Policies, which will be headed by the Minister of Finance.
The bill, titled “An Act to Amend the Central Bank of Nigeria Act No. 7 of 2007,” is sponsored by Senator Tokunbo Abiru, lawmaker representing Lagos East, along with 31 co-sponsors.
The lawmaker emphasised the necessity of the amendments, stating: “This bill is a pivotal step towards modernising our financial regulatory environment. By aligning the CBN’s operations with contemporary best practices, we aim to foster a more robust and transparent economic framework for Nigeria”.
He added that the primary objective of the amendment was to enhance the effectiveness of the CBN in line with current realities and best practices.
Also, one of the significant amendments proposed is the recapitalisation of the CBN from its current capital of N100 billion to N1 trillion, a change which aims to strengthen the financial stability and operational capacity of the Bank.
Under the new provisions, the CBN’s budget will be subject to the approval of the National Assembly, aligning with the Fiscal Responsibility Act, 2007. This move is aimed at increasing transparency and accountability in the Bank’s financial management.
Sen. Abiru said a new position, Chief Compliance Officer (COO), will be introduced, and would be charged with the responsibility to prepare quarterly reports on the Bank’s compliance with the Act’s provisions.
These reports will be submitted to the Board, the President, and relevant committees of the National Assembly.
Also in the bill, the CBN Governor, Deputy Governors, and Chief Compliance Officer will now be appointed for a single term of six years with no possibility of reappointment.
The bill also calls for gender balance in the composition of the CBN Board and mandates a one-year notice before any changes to Naira notes are implemented.
Additionally, the bill mandates severe penalties for those who refuse to accept the Naira as payment or engage in the buying or selling of Naira notes at a markup.
These penalties include a minimum prison term of six months or a fine of no less than N500,000 (five hundred thousand naira).
