By Linus Aleke, Abuja
A bill to take away the powers of the Chairman of the Board of the Central Bank of Nigeria (CBN), from the Governor, has passed a second reading in the House of Representatives.
Francis Waive, who initiated and sponsored the Bill, said that there was a need to amend Section 6 of the Central Bank of Nigeria Act, to separate both positions so that the Governor can be checked and not have all the powers.
He said the provision ensures that the exchange rates will remain uniform throughout the country, regardless of the entity involved in currency exchange, adding that the move will also foster economic predictability and prevent distortions.
The Bill is titled, “A 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)”.
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The proposed legislation also envisioned that in the event of the need for a currency swap or Naira redesign, as witnessed from late last year to early this year, the Bank would be directed to call in its notes or coins, subject to a notice of not less than one year.
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 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. Secondly, the amendments also provide for the separation of the Chairman of the Board from that of the Governor. Importance of a Distinct Chairman”.
Waive, who represents Ughelli North/South/Udu federal constituency of Delta state, said the 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 APC lawmaker, said the proposed amendment to Section 6 of the Central Bank of Nigeria Act, represents a significant step toward strengthening the governance structure of the CBN.
Waive, who is also a clergy, noted that the amendment which seeks the differentiation between the Chairman of the Board and the Governor of the Bank introduces a level of independence, oversight, and accountability that is essential for the effective functioning of the CBN.
The ongoing amendment of the legal instruments, he said, aligns with international best practices and demonstrates a commitment to transparent and prudent monetary policy management.
Pointing out other areas that the amendment intends to remedy, Waive, said, “Amendment to Section 7 (1): Day-to-Day Management and Accountability. The proposed amendment to Section 7 (1) of the Principal Act addresses the day-to-day management of the Central Bank of Nigeria (CBN).
“This amendment states that ‘Section 7 (1), the Governor or in his absence the most senior Deputy Governor shall be in charge of the day-to-day management of the Bank and shall be answerable to the Board for his acts and decisions.
“This is opposed to the current provision which gives the Governor the power to choose which of the Deputy Governors to act in his absence. This amendment clarifies the chain of command within the CBN, ensuring that the Governor or the most senior Deputy Governor takes on the role of managing the bank’s daily operations.
“This allocation of responsibility minimizes ambiguity and ensures efficient decision-making. The provision that the Governor or Deputy Governor is accountable to the Board for their actions strengthens oversight. It enhances the Board’s role in reviewing operational decisions and ensures that such decisions are aligned with the broader objectives of the CBN.”
The proposed amendment to Section 8 (3) of the Principal Act, he said, addresses the Governor and Deputy Governors of the CBN subject to the approval of the Revenue Mobilization and Fiscal Commission and not the Board of the Bank.
This amendment, he said, empowers the Bank to devise a suitable mechanism for determining the Naira’s exchange rate, adding that it emphasizes stability and consistency in exchange rates across the country.
He further averred that the amendment also introduced Section 48 on the budgetary process.
