At the Senate’s plenary on 27th September 2022, a Bill to amend the Central Bank of Nigeria Act, 2007 was deliberated upon. As reported in the media, the Bill focused on three issues namely, 1) Appointment of an outsider as the chairman of CBN Board of Directors, 2) Fixing the remuneration of board members and 3) Approval of annual budget to be submitted to the National Assembly for consideration.
The executive duality nomenclature in the governance structure of central banks is not peculiar to the CBN. It is the feature of most central banks all over the world. The overriding objective is to insulate central banks from undue external pressure either from the political authority or industry players thereby preserving institutional independence. Since the enactment of CBN Act 24 1991, the bank had endeavoured to preserve its autonomy by resisting political pressure.
Sometimes in 1989, the Nigerian Security Printing and Minting Company submitted an application for banking licence which CBN rejected for being inconsistent with NSPMC’s mandate. The CBN was queried for rejecting the application by the Federal Ministry of Finance. There were other instances of divergent positions between the CBN and Federal Ministry of Finance over exchange rate and interest rate policies with FMF’s position prevailing.
The CBN currently exercises its regulatory and supervisory independence under the provisions of BOFIA, 2020 Institutional Independence: entails security of tenure of executive management, governance structure composed of experts, freedom to conduct monetary policy as well as open and transparent decision-making process while Budgetary Independence: involves insulation from political pressure, freedom to staff the agency and prompt response to imminent financial sector crisis but subject to...