In a significant move, a proposed bill aimed at establishing a distinct role of the Chairman of the Board of the Central Bank of Nigeria , CBN, separate from the position of the governor, has successfully passed its second reading in the House of Representatives.Â
The sponsor of the Bill, Hon Francis Waive, emphasized the need to amend Section 6 for a clear separation of both positions to enhance checks and balances, preventing excessive power concentration in the Governor.
The bill is named “A Bill for an Act to Amend the Laws of Federation of Nigeria, 2004 and for Related Matters (HB.16) and to Amend the Central Bank of Nigeria Act, Cap. C4″.
According to Waive, the Central Bank of Nigeria Act’s proposed Section 6 amendment is a major step in the right direction toward fortifying the CBN’s governance framework.
According to him, the amendment that aims to distinguish between the Governor of the Bank and the Chairman of the Board adds a degree of accountability, oversight, and independence that is necessary for the CBN to operate effectively.
He discussed additional amendments, saying that “Amendment to Section 7 (1): Day-to-Day Management and Accountability” was one including. The day-to-day operations of the Central Bank of Nigeria (CBN) are covered by the proposed amendment to Section 7 (1) of the Principal Act. The Governor, or the most senior Deputy Governor in his absence, will be in charge of the day-to-day operations of the Bank and will be accountable to the Board for his actions and decisions, according to this amendment’s Section 7 (1).
This runs counter to the existing clause, which grants the Governor the authority to designate which Deputy Governor will preside over in his absence. The CBN’s chain of command is made clearer by this amendment, which guarantees that the Governor or the most senior.
The daily management of the Bank’s operations is the responsibility of the Deputy Governor. This division of labor reduces uncertainty and guarantees effective decision-making.
“Oversight is strengthened by the provision requiring the Governor or Deputy Governor to answer to the Board for their actions. It strengthens the Board’s oversight of operational decisions and guarantees that they are in line with the CBN’s overarching goals.
The proposed amendment aligns with international best practices and aims to introduce transparency and accountability to the CBN’s governance structure. The Bill also addresses issues related to currency swap and introduces measures for effective budgetary processes within the CBN.
Modification to Section 8(3): Salary Calculation. The Governor and Deputy Governors of the CBN are mentioned in the proposed amendment to Section 8(3) of the Principal Act, which is subject to approval by the Revenue Mobilization and Fiscal Commission rather than the Bank Board.
Section 8(3): Subject to the President’s approval and the Revenue Mobilization Allocation and Fiscal Commission’s periodic recommendations, the salaries and benefits, including pensions and other allowances, payable to the Governor and Deputy Governors shall be as specified.
“Correspondence Rate Mechanism Amendment to Section 16.” The calculation of the Naira’s exchange rate is the subject of the proposed amendment to Section 16 of the Main Act. According to the amendment, ” “A suitable mechanism developed by the Bank for that purpose shall periodically determine the exchange rate of the Naira; provided, however, that such rates shall at all times be uniform throughout the country, both at the Bank and Commercial Banks, or at any such persons licensed to carry on the business of Bureau De Change.”
The amendments, if passed, are expected to contribute to a more transparent, accountable, and effective operation of the Central Bank, fostering good governance and prudent management of the Nigerian economy.
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