Senate to amend CBN Act, to reduce Governor’s powers

 

Senate has begun moves to whittle down the powers of the CBN Governor by removing him as Chairman of the Board of the apex bank.

The CBN Act No. 7 of 2007 makes any incumbent governor of the Apex bank to also serve as Chairman of its Board.

The proposed Amendment will separate the head of Management from the head of the governing Board in line with national and international governance practices.

The CBN Act also states that the Board of the Bank shall include the Governor as Chairman, 4 Deputy Governors, Permanent Secretary of the Federal Ministry of Finance, 5 Directors and the Accountant General of the Federation.

The Amendment seeks additional position of a Deputy Governor to represent the six geo-political zones in the country for robust engagements in the administration and policy of the CBN.

The Lawmakers also proposed an exclusion of the CBN Governor or the Deputy Governors from partisan politics or contest elections whilst in office to avoid conflict of interest.

The CBN has 12 members in its Board, out of which 10 are members of the Board’s management team.

The Senate through two separate Bills sponsored by Senators Sunday Karimi and Darlington Nwokocha which scaled second reading, seeks for the addition of the Auditor General of the Federation, the Chairman of the Federal Inland Revenue Service, Chartered Institute of Bankers, be included as Members of the Board of the CBN for synergy in fiscal and monetary policy.

In his lead debate the Lawmaker pointed out that a different person with requisite qualification and required knowledge on monetary and financial policies, should be made chairman of the Board.

He added that separation of the two positions will enable any sitting CBN Governor to focus more on fiscal and monetary policies than politics of the Institution.

The Amendment further proposes to allow the most Senior Deputy Governor act on behalf of the CBN Governor in circumstances stated in Section 7 and 13 of the Principal Act when the Governor is Absent.

The proposed legislation provides that the Salaries and Wages Commission shall examine, streamline and recommend salary scale and fix their emoluments and salaries for all CBN staff to ensure transparency and fairness.

The Bill also seeks to criminalize the use of foreign exchange for payment of goods and services in domestic trade in Nigeria except in foreign exchange transactions.

According to the senators, the amendments will ensure that the banking system is repositioned to play its primary role of financial intermediation for the benefit of investments and economic growth in Nigeria.

The bill which scaled second reading received diverse contributions from lawmakers with some for and some against, given recent narratives surrounding the activities of the CBN.

The bill is referred to the committee on Banking, Insurance and Other Financial Matters for further legislative input to report back in two weeks.