The National Assembly is advancing a significant proposal aimed at fortifying the Central Bank of Nigeria (CBN), potentially elevating its capital base to a staggering N1 trillion. Spearheaded by Senator Adetokunbo Abiru (APC, Lagos East), the bill, titled “Bill for an Act to Amend the Central Bank of Nigeria Act, 2007,” has garnered substantial support and recently progressed to its second reading in the Senate.
If passed, the bill will introduce sweeping amendments to the existing CBN Act, 2007, with the primary objective of bolstering the central bank’s financial resilience and enhancing its effectiveness in regulating Nigeria’s financial system. Among the key provisions is a proposed increase in the CBN’s authorized capital from the current N100 billion to N1 trillion.
This significant capital infusion is deemed imperative to counteract the erosion of the CBN’s capital base over the years due to the devaluation of the naira. Senator Abiru emphasized the critical role of recapitalization in ensuring the CBN’s continued efficacy in navigating Nigeria’s economic landscape.
In addition to capital restructuring, the bill proposes reforms to the tenure of the CBN’s leadership. It advocates for a single, non-renewable term of six years for both the governor and deputy governors, aiming to enhance governance dynamics within the apex bank.
Furthermore, the proposed legislation includes provisions for the meticulous replacement of the country’s currency. It outlines a transition period during which old and new currency notes would coexist as legal tender for two years, ensuring a smooth and orderly transition process.
Another crucial aspect of the bill pertains to the management of Ways and Means advances provided by the CBN to the federal government. To enforce stricter financial discipline, the bill mandates the repayment of such loans within a three-month window from the issuance date and imposes limits on the amount of advances granted.
Senator Abiru highlighted the importance of these measures in preventing economic disruptions and ensuring prudent financial management within the federal government. The proposed reforms aim to strengthen the CBN’s regulatory capabilities and foster greater stability in Nigeria’s financial system.
As the bill progresses through the legislative process, stakeholders anticipate comprehensive discussions and deliberations to refine and enact reforms that will enhance the resilience and effectiveness of the Central Bank of Nigeria.
