The Senate has initiated steps to amend the Central Bank of Nigeria (CBN) Act of 2007, with proposed changes including extending the tenure of the CBN Governor to a single six-year term instead of the current renewable five-year term. Additionally, a recapitalization plan of N1 trillion for commercial banks, which currently stands at N100 billion, has been put forward.
The proposed amendment bill, discussed during a plenary session on Tuesday and spearheaded by Senator Adetokunbo Abiru (APC Lagos East), aims to introduce significant reforms in the structure, administration, and operations of the CBN. One of the key provisions is the establishment of a six-year non-renewable term for the CBN Governor, Deputy Governors, and Board of Directors, aimed at reducing political interference.
Senator Abiru, supported by 41 other committee members, emphasized that aligning with international best practices observed in institutions such as the US Federal Reserve and the European Central Bank, a single term for these positions would enhance the independence of monetary policy decisions and mitigate issues of political influence.
Furthermore, the bill proposes a substantial increase in the paid-up capital of commercial banks to N1 trillion, subject to governmental approval. It also introduces the creation of a Coordinating Committee for Monetary and Fiscal Policies, addressing the lack of coordination between monetary and fiscal policies which has often led to economic imbalances.
Another significant aspect of the proposed amendments concerns the regulation of CBN’s issuance of Ways and Means to the Federal Government. The bill suggests limitations on such advances to prevent inflationary pressures and economic distortions, with stipulations including repayment within three months and excluding proceeds from asset sales in revenue calculations.
During the same session, nominees for the Board of Directors of the CBN, including Mr. Robert Agbede, Mr. Ado Yakubu Wanka, and Mrs. Muslimat Olanike Aliyu, underwent screening by the Senate Committee on Banking, Insurance, and other Financial Institutions.