Experts Call For Amendment Of CBN Act

Experts Call For Amendment Of CBN Act

By ThisDay on March 5, 2014
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Central Bank of Nigeria, Tweet meet,
Central Bank headquarters in Abuja, Nigeria

Following the allegations of financial recklessness levelled against the suspended Governor of the Central Bank of Nigeria (CBN), some financial market experts have stressed the need for an amendment to the CBN Act 2007.

They argued that this is necessary so as to entrench the principles of corporate governance at the central bank.

Specifically, they called for an amendment of the Act such that the position of the CBN governor and the chairman of the board would no longer be held by an individual.

Section six of the CBN Act states that there shall be for the Bank a Board of Directors and the governor shall be the chairman.

President Goodluck Jonathan had in a media chat last week disclosed that the CBN Act might be amended to separate the powers of the chief executive and that of the chairman of the board. He however stated that the government would have to consult widely to ensure that what will be done is obtainable around the world.

He had also assured Nigerians that the CBN would retain its independence and power to take decision on monetary policies.

But speaking in an interview with THISDAY, the Chief Executive Officer, Institute of Credit Administrators, Dr. Chris Onalo, said such a legislation would be healthy for the economy.

Onalo said the central bank should not be different from institutions under its supervision where such positions are held by separate people.

He explained: “There is need to amend the lopsided provision in the CBN Act whereby the central bank governor doubles as the chairman of the board. There is no way you can establish a transparent corporate governance structure in that kind of situation.

“I think it is the right thing to do for the purpose of checks and balances, for the purpose of transparency and accountability and for the purpose of respect to the
CBN authority, the central bank stakeholders and the federal government.

“It is even very surprising that such a fault exists in the CBN Act and I think it needs to be amended with a view to correcting it quickly.”

On his part, the Registrar of the Institute of Certified Economists of Nigeria (ICEN), Mr. Peter Ikpamejo, noted that separating the position of the chairman of the board from the CBN governor would not in any way tamper with the independence of the CBN.

According to him, such legislation would bring about robust monetary policy for the country.

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