The Senate has set a machinery in motion for amendment of the Central Bank of Nigeria ( CBN ) Act 2007, which will among others, make tenureship of Governor of the apex bank, a six year single term as against renewable five years in the extant Act.
It also proposes N1trillion recapitalization for commercial banks which presently stands at N100billion.
As the Senate moves for sweeping reforms in the organisation, administration and function of CBN through an amendment bill read for second reading in plenary, its committee on Banking, Insurance and other Financial Institutions, screened nominees for board of Directors of the Bank.
Proposal for six year single term for CBN Governor, Deputy Governors and members of board of Directors, is contained in a bill seeking for amendment of the CBN Act 2007, sponsored by Adetokunbo Abiru, Chairman Senate Committee on Banking.
Abiru in his lead debate on the bill co – sponsored by 41 other members of the committee, said six years single term for the CBN Governor, Deputy Governors and board of Directors, was geared towards reducing political influence on them.
“The Bill proposes to amend this provision to provide a single non-renewal term of 6 years for the Governor and the Deputy Governors.
“Empirical evidence shows that a single term for the members of the Executive and Board members of central banks helps to reduce political influence on monetary policy decisions and the time inconsistency problem associated with non-independent central banks’, he said.
On the N1trillion recapitalization, Abiru in the bill said the proposal seeks to provide that, the paid-up capital of the Bank shall be 1 Trillion Naira and may be increased from time to time as the Government may approve either by way of transfers from the General Reserve Fund or by such other means as the Government, in consultation with the Board.
The bill also seeks for creation of a
Coordinating Committee for Monetary and Fiscal Policies since the extant act made no provision for such .
He said : “The current Act made no provision for coordination of monetary and fiscal policies which is the reason that monetary policies of the Bank often diverge from fiscal policies to the detriment of the economy”.
” To this end, the Bill introduces for the purpose of co-ordination of the monetary, fiscal and trade policies, a Coordinating Committee for Monetary and Fiscal Policies.
In another development, the Senate screened
members of Board of CBN Directors.
Those screened by the red chamber are: Mr. Robert Agbede, Mr. Ado Yakubu Wanka and Mrs Muslimat Olanike Aliyu.
James Itodo, Edited By Grace Namiji
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