National Assembly Proposes Major Overhaul for CBN: N1 Trillion Capital Base, Single Term for Leadership

CBN Building with logo 2

The National Assembly is advancing a groundbreaking proposal that could revolutionize the Central Bank of Nigeria (CBN), elevating its capital base to an unprecedented N1 trillion.

Led by Senator Adetokunbo Abiru, alongside the support of 41 other Senators, the bill titled “Bill for an Act to Amend the Central Bank of Nigeria Act, 2007” aims to fortify the CBN and enact substantial changes to enhance its effectiveness in Nigeria’s economic ecosystem.

Key Provisions of the Proposed Bill:

  1. Capital Base Enhancement: The bill seeks to bolster the CBN’s capital base from the current N100 billion to N1 trillion. This substantial increase is deemed necessary to maintain the CBN’s resilience amid economic fluctuations.
  2. Leadership Tenure Restructuring: It proposes a single, non-renewable term of six years for both the CBN Governor and Deputy Governors, replacing the current provision allowing for reappointment. This adjustment aims to streamline governance dynamics within the apex bank.
  3. Currency Replacement Process: The bill advocates for a meticulous transition period during currency replacement, where both old and new currency notes would be accepted as legal tender for two years. This phased approach aims to ensure a smooth transition and preserve economic stability.
  4. Stricter Financial Discipline: To enforce financial discipline within the federal government, the bill mandates repayment of loans obtained from the CBN under Ways and Means advances within a three-month window from the issuance date. This measure aims to prevent inflationary pressures and distortions in economic management.

Senator Abiru’s Perspective:

Senator Abiru highlighted the erosion of the CBN’s capital base due to currency devaluation and emphasized the need for a robust framework to empower the CBN in fulfilling its mandates. He underscored the bill’s potential to strengthen Nigeria’s financial system integrity and stability.

Conclusion:

The proposed amendments represent a significant step towards enhancing the CBN’s capacity to navigate complex economic challenges and drive sustainable growth. As the bill progresses through the legislative process, it signals a commitment to fortifying Nigeria’s financial institutions and fostering a conducive environment for economic prosperity.