From Ndubuisi Orji, Abuja
House of Representatives has passed for second reading a bill seeking to amend the Central Bank of Nigeria (CBN) Act to stop governors of the apex bank from chairing its board of directors.
The proposed legislation, sponsored by the Chairman, House Committee on Rules and Business, Francis Waive, also seeks to mandate the CBN to give one year notice to the public before change of currency.
Waive, in his lead debate, said the proposed amendment to the CBN Act is intended to enhance effectiveness, transparency, and accountability in the operations of the apex bank.
He explained that areas to be amended included Section 6 of the principal act to make the board of directors chairmanship distinct from the CBN governor.
The lawmaker explained that the essence is to enhance independence and oversight, as separating the role of the chairman of board from the governor (of CBN) would ensure a more effective system of checks and balances within apex bank’s governance structure.
According to him, “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. The proposed amendment adds a new paragraph, Section 6(2)(a), which mandates that the chairman of the board shall be a former CBN governor, a former chairman of a 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.
“This differentiation reduces the concentration of power, enhances accountability, and provides an avenue for unbiased oversight of the CBN’s operations. The presence of an independent chairman with experience in the financial sector but not directly tied to the bank’s current management will foster diverse perspectives in decision-making. This will discourage ‘groupthink’ and promote robust deliberations that lead to well-informed and balanced policies.”
Waive further stated that “amendment to Section 20 (3): Call-in of Notes and Coins rotect public interest in the event of the need for currency swap of naira redesign as witnessed from late last year to early this year.
“Direct the bank to call in its notes or coins, subject to a notice of not less than one year. This amendment reinforces the need for adequate time for the notice of change of the naira notes before exercising the power to call in the old notes.
“The provision that both old and new notes can be used as legal tenders during the notice period minimises disruptions in economic activities and ensures a smooth transition.”
He argued that “these amendments underscore the commitment to good governance, fiscal responsibility, and the prudent management of the Nigerian economy. It is recommended that the National Assembly carefully considers these amendments to promote the overall economic well-being of the country and the welfare of its citizens.”