The Senate on Tuesday passed for second reading a bill seeking to amend the Central Bank of Nigeria (CBN) Act to provide for single non-renewal term of six years for the governor and the deputy governors of the apex bank.
The bill, sponsored by Senator Mukhail Adetokunbo Abiru (APC, Lagos) and all the 41 others, seeks to amend Section 8 (2) of the CBN Act.
The section currently grants the governor and deputy governor of the CBN tenure of five years and they are eligible for re-appointment for another term not exceeding five years.
Daily Trust reports that the 2007 CBN act, which charges the bank with the overall control and administration of the monetary and financial sector policies of the federal government, has not been amended for over 16 years despite growing changes to the bank’s balance sheet as well as challenges in monetary policy implementation occasioned by the rapidly changing financial landscape.
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The proposed legislation states that where a vacancy is created by the death or resignation of a CBN governor or deputy governor, the President can appoint an acting governor in the interim pending the appointment of a substantive governor or deputy governor.
It also proposed that where a substantive appointment is made, such appointment will be for a fresh term rather than serving the tenure of the previous governor or deputy governor of the CBN.
The bill also seeks the establishment of the office of a Chief Compliance Officer for the apex bank, of the rank of a deputy governor, who reports directly to the board and may occasionally be summoned to appear before the relevant committee of the National Assembly.
“The current Act gives the bank the power to restructure the domestic currency and issue new legal tender but has not specified a time frame within which the old currency ceases to be a legal tender. This lacuna contributed to the confusion that characterized the last currency redesign exercise and the resultant huge economic loss to the nation until the intervention of the Supreme Court.
“In order to prevent a repeat of this experience and consistent with global practice, the bill proposes that before the bank can replace an old legal tender with a new one under any restructuring, redesigning, redenomination or any similar arrangement, the bank should give reasonable notice of at least one (1) calendar year of its intention to replace the existing legal tender.
“The entire programme should last at least two years from the date of the announcement of its intention. Throughout the duration of the programme, both the old and new currency notes and coins are expected to serve as legal tender simultaneously.
“The bill if passed into law will further strengthen the bank to carry out its principal objectives in line with Section 2 of the Act which is to ensure monetary and price stability, issue legal tender currency in Nigeria, maintain external reserves to safeguard the international value of the legal tender currency, promote a sound financial system in Nigeria; and act as banker and provide economic and financial advice to the federal government,” Senator Abiru said in his lead debate.
