The House of Representatives has passed the second reading of a comprehensive bill that would limit the Central Bank of Nigeria (CBN) governor and deputy governors to a single, non-renewable six-year term, while imposing a strict prohibition on foreign currency transactions within the country.
The legislation, which garnered unanimous support through a voice vote under Deputy Speaker Benjamin Kalu, seeks to modernize the apex bank's operations amid lingering concerns over past governance lapses. Under the existing CBN Act of 2007, Section 8(2) allows the governor and deputies a renewable five-year tenure, a provision critics argue has enabled undue political entanglements and policy inconsistencies.
Sponsored by Rep. Jesse Okey-Joe Onuakalusi (Oshodi/Isolo Federal Constituency) and Majority Leader Julius Ihonvbere, the bill introduces a slew of reforms designed to bolster transparency, accountability, and economic stability. Among its standout measures:
- Foreign Currency Crackdown: A unified exchange rate regime would bar the use of dollars or other foreign currencies in local transactions, restricting such dealings to authorized channels only. This aims to stem dollarization and protect the naira from erosion.
- Leadership Overhaul: The roles of CBN governor and board chairman would be separated to prevent power concentration, with enhanced professional oversight to align with international best practices.
- Fiscal Guardrails: Ways and Means advances—short-term loans from the CBN to the federal government—would be capped at 10% of the prior year's actual revenue, curbing potential inflationary financing and fiscal excesses.
- Currency Redesign Safeguards: Any future naira redesign or demonetization would require 90 days' advance notice, a detailed impact assessment, and a briefing to the National Assembly, a direct response to the chaotic 2023 rollout under former Governor Godwin Emefiele that triggered widespread cash shortages and economic disruptions.
- Stability and Expertise Boost: The bill mandates regular stress tests and macro-prudential tools for financial oversight. It also reforms the Monetary Policy Committee (MPC) by incorporating independent external experts for more robust decision-making, alongside quarterly disclosures of policy rationales, economic outlooks, and stability reports.
- Political Neutrality: CBN leaders would be explicitly barred from partisan politics during their tenure, addressing allegations of Emefiele's rumored presidential bid that fueled public distrust.
Onuakalusi, leading the debate, hailed the proposals as "structural and forward-looking reforms" essential for safeguarding Nigeria's financial system. "The central bank is the heart of our financial system, yet certain provisions of the current Act no longer meet today’s governance and monetary policy realities," he told the house.
He stressed that the bill targets systemic weaknesses, not individuals, to foster sustainable governance and rebuild public confidence.
The reforms echo a similar Senate bill from February 2024, which also pushed for the six-year term limit, signaling growing bipartisan momentum for CBN independence.
If passed into law, these changes could mark a pivotal shift in how Nigeria manages its monetary policy, potentially stabilizing the economy amid ongoing inflation and currency volatility challenges. The bill now advances to the committee stage for further scrutiny.
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