Bill to review CBN Act scales second reading
By Felicia Nwosu
As part of plans to reposition the Central Bank of Nigeria (CBN) to enable it perform its functions as the apex bank, a bill titled, “Bill for an Act to Amend the Central Bank of Nigeria Act, Cap. C4, Laws of Federation of Nigeria, 2004 and for Related Matters (HB.16)” has scaled second reading in the House of Representatives.
The Bill, which is aims at creating the position of Chairman of the Board of the Central Bank of Nigeria, separate from the position of the Governor, also seeks to address several critical aspects of the Act to enhance the effectiveness, transparency, and accountability of the apex bank and its operations.
It was sponsored by Hon Francis Waive and presided over by Speaker Hon Tajudeen Abbas. Hon. Waive, while defending the Bill, revealed that it underscored the need to amend Section 6, to enable the separation of both positions, so that the Governor can be checked and not have all the power.
Leading the debate at a plenary session on the floor of the House, Waive, who represents Ughelli North/South/Udu Federal Constituency, Delta State emphasised the need to amend Section 6 of the CBN Act as it concerns the necessity of separating the Chairman of the Board of the apex bank from the CBN Governor.
According to the Ughelli North/South/Udu Federal Constituency representative, any Chairman selected from outside the current leadership of the bank diminishes the likelihood of conflicts of interest that could arise when the Governor also assumes the role of the Chairman. He maintained that this new move will help reduce the risk of policy decisions being influenced by personal or vested interests.
“The proposed amendment introduces a crucial change in the composition of the CBN’s Board of Directors as outlined in Section 6 of the Principal Act.
He further added, “The proposed amendment adds a new paragraph, Section 6(2)(a), which mandates that the Chairman of the Board shall be a Former Governor of the CBN, a former Chairman of the Bank, or a former Managing Director of a bank. This provision introduces an essential shift by requiring the Chairman to have a background outside of the current leadership of the CBN.”
He affirmed that separating the Chairman of the Board from the Governor, according to the lawmaker, would enhance independence and oversight and “Ensures a more effective system of checks and balances within the CBN’s governance structure. This differentiation reduces the concentration of power, enhances accountability, and provides an avenue for unbiased oversight of the CBN’s operations.”
The law-maker agreed that an independent Chairman can serve as a symbol of impartiality and transparency, thereby increasing public confidence in the CBN’s operations, which he noted is particularly important in preserving the integrity of monetary and financial policies.
“By requiring the Chairman to have experience as a former Governor, Chairman, or Managing Director of a bank, the amendment ensures that the Chairman possesses the necessary financial and economic expertise to provide effective leadership to the Board,” he added.
The bill is also seeking amendment to Section 7 (1) to enhance the operational efficiency and accountability of the apex bank to Nigerians.
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