CBN Act: Reps consider bill to separate functions of governor, board chairman

The house of representatives, on Thursday, passed for second reading, a bill to amend the Central Bank of Nigeria (CBN) Act of 2004.  

The bill was by sponsor Francis Waive, a lawmaker representing Ughelli north, south, and Udu federal constituency of Delta state.

According to Waive, the proposed amendment seeks to address several critical aspects of the act to enhance the effectiveness, transparency, and accountability of the apex bank and its operations.

Leading the debate on the legislation, the lawmaker said it is important to amend section 6 of the CBN Act as it concerns the necessity of separating the chairman of the board of the apex bank from its governor.

“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,” he said.

“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.”

Waive also proposed an amendment to section 7 (1) of the CBN Act, which addresses the day-to-day management of the CBN.

“The 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,” he said.

“This is opposed to the current provision which gives the Governor the power to choose which of the Deputy Governor 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.

“Section 8 (3) The salaries or allowances including pension and other allowances payable to the Governor and to the Deputy Governors shall be as stipulated, from time to time, by the Revenue Mobilization Allocation and Fiscal Commission subject to approval of the President,” he said.

The politician added that the proposed amendments to the CBN Act collectively contribute to a more transparent, accountable, and effective operation of the financial regulator.