The Central Bank of Nigeria (CBN) Act, 2007 is scheduled to be amended by the Senate. Among other changes, the governor of the top bank would have a six-year term, instead of the current act’s five-year renewable term.
Additionally, N1 trillion in recapitalization for commercial banks—whose current value is N100 billion—was suggested.
The Senate’s Committee on Banking, Insurance, and Other Financial Institutions vetted candidates for the bank’s board of directors as it moved towards broad reforms to the structure, operations, and role of the CBN through an amendment bill read aloud for second reading in plenary on Tuesday.
A bill to amend the CBN Act of 2007 included a proposal for a six-year single term for the CBN Governor, Deputy Governors, and Board of Directors. The bill was sponsored by Senator Adetokunbo Abiru (APC Lagos East), who serves as the chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions.
In the lead argument on the measure, which is co-sponsored by 41 other committee members, Senator Abiru stated that the bill’s goal is to reduce political influence on the CBN Governor, Deputy Governors, and Board of Directors by giving them a single six-year tenure.
“The bill proposes to amend this provision to provide a single non-renewal term of six years for the Governor and the Deputy Governors.
“This is the practice adopted by many independent banks such as the US Federal Reserve and the European Central Bank, where their Chief Executive Officers serve only one non-renewable term.
“Empirical evidence shows that a single term for the members of the Executive and Board members of central banks helps to reduce political influence on monetary policy decisions and the time inconsistency problem associated with non-independent central banks,” he added.
cc: Daily Post Ng
