The Senate has successfully passed the second reading of a bill that aims to amend the Central Bank of Nigeria (CBN) Act of 2007. The bill was deliberated during the plenary session on Wednesday. Senator Dalington Nwaokocha (LP-Abia) presented the bill, which was first read on October 10th.
The proposed amendments seek to strengthen the bank by addressing various sections of the Act. Senator Nwaokocha explained that the bill aims to appoint a chairman of the board and provide for enhanced execution of the bank’s mandate. It also seeks to rectify anomalies that have hindered the progress of the apex bank in handling economic issues.
The main objective of this amendment is to establish a people-centered central bank that promotes financial system stability, sustainable economic development, and price delivery. In light of the current economic challenges faced by the nation, repositioning the CBN to stimulate economic growth, regulate exchange rates, monitor unauthorized financial transactions, and limit dollarization of the economy is crucial.
Furthermore, the bill proposes to separate the head of management from the head of the governing board, in line with national and international corporate governance practices. It also aims to establish a robust governance framework for the monetary authority to ensure optimal policy and operational effectiveness.
The amendment will introduce real-time controls and effective accountability in the conduct of central banking in Nigeria. By repositioning the CBN and reinforcing its core mandates, the bill aims to make the bank an apolitical entity that sets an example in monetary policy, banking sector regulation, currency management, and supervision, both nationally and internationally.
To achieve the aforementioned objectives, the bill proposes the establishment of a qualified and experienced Chairman of the Board of the CBN. It also advocates for the creation of an independent and neutral board that provides comprehensive policy and operational oversight. Additionally, the bill seeks to introduce a deputy governor position to ensure balanced geopolitical representation across all zones.
Moreover, the bill emphasizes the importance of internal and parliamentary oversight, as well as credible accountability to the Nigerian people. It underscores the responsibilities of the board and management of the CBN in terms of financial reporting and corporate governance.
Once the bill receives further legislative input from the committee on Banking, Insurance, and Other Financial Matters, it will move forward to the next stage after being read for the second time. Given recent discussions surrounding CBN activities, this bill is of significant importance in shaping the future of Nigeria’s banking system and its role in promoting investments and economic growth.