By Becky Usman

The House of Representatives witnessed the successful advancement of a bill aimed at amending the Central Bank of Nigeria (CBN) Act during its second reading on Thursday. Sponsored by Hon. Francis Ejiroghene Waive, the proposed amendments to the CBN Act, Cap C4, were presented to address crucial aspects of the Act, focusing on enhancing the effectiveness, transparency, and accountability of the CBN and its operations.

In his lead debate, Hon. Waive emphasized the significance of amending Section 6 of the Principal Act, particularly highlighting the need for the Chairman of the Board of Directors to be distinct from the Governor of the Bank. The proposed changes in Section 6 pertain to the Composition of the Board of Directors, introducing a vital shift that mandates the Chairman to be a Former Governor of the CBN, a former Chairman of the Bank, or a former Managing Director of a bank, as outlined in the new paragraph, Section 6(2)(a).

The sponsor of the bill underscored that this alteration aims to introduce independence and oversight. By requiring the Chairman to have a background outside the current leadership of the CBN, the amendment aims to establish a more effective system of checks and balances within the CBN’s governance structure. This separation of roles is anticipated to reduce the concentration of power, enhance accountability, and facilitate unbiased oversight of the CBN’s operations.

Hon. Waive argued that the proposed bill would prevent groupthink and promote robust deliberations, attributing this to the presence of an independent Chairman with experience in the financial sector but not directly tied to the Bank’s current management. The separation of the Chairman from the Governor, he contended, diminishes the potential for conflicts of interest, ensuring that policy decisions are not unduly influenced by personal or vested interests.

Furthermore, the bill envisions a Chairman selected from outside the current leadership of the Bank, reducing the likelihood of conflicts of interest. This separation is seen as a measure to strengthen public confidence, as an independent Chairman can symbolize impartiality and transparency, thereby enhancing public trust in the CBN’s operations. The requirement for the Chairman to have experience as a Former Governor, Chairman, or Managing Director of a bank also ensures that the individual possesses the necessary financial and economic expertise to provide effective leadership to the Board.

Hon. Waive concluded by characterizing the proposed amendment to Section 6 of the Central Bank of Nigeria Act as a significant step toward fortifying the governance structure of the CBN. He emphasized that the differentiation between the Chairman of the Board and the Governor of the Bank introduces a level of independence, oversight, and accountability crucial for the effective functioning of the CBN. This amendment, he asserted, aligns with international best practices and reflects a commitment to transparent and prudent monetary policies.