The Senate on Tuesday passed a legislation that would peg the tenure of the Central Bank of Nigeria Governor to six years single term into second reading.
The Senate decision was sequel to the motion sponsored by Senator Tokunbo Abiru.
The Lagos-APC representative proposed in an amendment to the CBN Act to give a one year notice before the Apex Bank can be able to change the currency in circulation.
The lawmakers also agreed that the budget of the CBN should no longer be shrouded in secrecy.
Leading the debate on the general principles of the bill, Abiru said the mandate of the CBN was derived from the 1958 Act of Parliament as amended in 1991, 1993, 1997, 1998 and 2007.
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Abiru said the current act of 2007, which empowers 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.
He said there were also challenges in monetary policy implementation occasioned by fiscal dominance and the rapidly changing financial landscape.
Abiru said the proposed amendments were therefore aimed at strengthening the bank to discharge its primary mandate of maintaining monetary and price stability in support of the government’s economic growth objectives.
He said the amendment was designed to align its governance mechanisms with global best practices.
According to him, the current act made no provision for coordination of monetary and fiscal policies which accounted for the reason monetary policies of the bank often diverge from fiscal policies to the detriment of the economy.
He said the bill introduces for the purpose of coordination of the monetary, fiscal and trade policies, a Coordinating Committee for Monetary and Fiscal Policies.
He listed the functions of the committee to include:
“Setting internally consistent targets of monetary and fiscal policies that are conducive to controlling inflation and promoting financial conditions for sustainable economic
“Applying caps to any fiscal deficit at a level that can be financed without having recourse to direct monetary financing from the Bank, that is Ways and Means.”
He said membership of the proposed committee shall consist of the Minister of Finance, who shall be the Chairman, Minister of Budget and Economic Planning,Minister of Industry Trade and Investment, Minister of Agriculture, Governor of the Central Bank of Nigeria.
Other senators like Adeola Olamilekan, Hassan Dankwambo and Victor Umeh supported the bill as proposed by Senator Abiru.
After extensive debate on the bill , the Deputy President of the Senate, Barau Jibrin, referred the bill to Committee on Banking Insurance and other Financial Institutions for further legislative inputs and to revert back to plenary in two weeks.