A bill aiming to prevent the Central Bank of Nigeria’s serving Governor from engaging in partisan politics and to improve the bank’s efficiency successfully passed its second reading in the Senate on Wednesday. Another bill, which focuses on prohibiting the use of foreign currencies for local transactions, was also discussed.
One of these combined bills, known as the “Central Bank of Nigeria (Establishment) (Amendment) Bill 2023,” was introduced by Senator Steve Karimi from the All Progressives Congress representing Kogi West.
The second bill, titled “A Bill to Amend the Central Bank of Nigeria Act 2007, and for Matters Connected Therewith, 2023,” was sponsored by Senator Darlington Nwokocha from the Labour Party, representing Abia Central.
This legislative action was prompted by the controversial attempt of the former CBN governor, Godwin Emefiele, to run for the 2023 presidential primaries of the APC while holding his position, a move that received widespread criticism from Nigerians due to its violation of the constitution’s provisions.
Karimi’s bill, as outlined in its explanatory memorandum, aims to amend the CBN Act to enhance transparency and accountability in the management of the apex bank and to restrict the use of foreign currency in local transactions within Nigeria.
Karimi’s proposed modification to Section 9(2) of the CBN Act states: “Despite the provisions of this Act or any existing written law, the Governor and Deputy Governor of the bank shall not directly or indirectly participate in partisan politics or contest any election during their tenure in office.
Furthermore, Senator Karimi’s bill seeks to prohibit the use of foreign currency for domestic transactions in Nigeria through an amendment to Section 20 of the CBN Act, introducing Section 20(a).
This proposed amendment stipulates that “No individual or corporate entity shall use foreign currency for goods, services, and other transactions in markets, supermarkets, hotels, restaurants, airports, and other places of business in Nigeria except through a bank, a licensed Bureau De Change, or other authorized financial institutions sanctioned by the Central Bank of Nigeria for such currency dealings.
Additionally, no individual or business entity in Nigeria shall advertise, denominate, or price their goods or services in any currency other than the Nigerian Naira and Kobo.”
Senator Nwokocha, in his lead debate, explained that his bill aims to address the existing shortcomings that have hindered the Central Bank’s ability to manage the nation’s economy effectively.
The central focus of this amendment is to transform the Central Bank into an institution that prioritizes the interests of the people, ensuring price and financial system stability while fostering sustainable economic development.
In light of the nation’s economic challenges, the bill seeks to reposition the Central Bank to stimulate economic growth, regulate exchange rates, oversee financial transactions, and reduce the dollarization of the economy.
The proposed legislation also strives to separate the head of management from the head of the governing board in line with national and international corporate governance standards, establish real-time controls and enhance accountability in the central banking conduct in Nigeria.
Ultimately, this bill is designed to reposition the Central Bank, emphasizing its core mandates and the pivotal role it plays in the economy.
It aims to make the Central Bank an apolitical entity, setting an example in national and international monetary policy, banking sector regulation, currency management, and supervision.
