Senate moves to prohibit CBN governor from partisan politics

The Senate passed a bill for a second reading on Wednesday, aiming to amend the Central Bank of Nigeria (CBN) Act and restrict the serving governor from engaging in partisan politics.

The bill, titled the “Central Bank of Nigeria (Establishment) (Amendment) Bill 2023,” was introduced by Senator Steve Karimi (APC – Kogi West).

Another related bill, titled “A Bill to amend the Central Bank of Nigeria Act 2007, and for matters connected therewith, 2023,” was sponsored by Senator Darlington Nwokocha (LP – Abia Central).

This legislative move comes in response to the former CBN governor, Godwin Emefiele, who attempted to participate in the 2023 presidential primaries of the All Progressives Congress (APC) while holding office, a move that garnered significant public criticism.

Senator Karimi’s proposed amendment to the CBN Act is designed to enhance accountability and transparency in the Bank’s operations and prohibit the use of foreign currency in local transactions within Nigeria.

He also proposed an amendment of section 9(2) of the  CBN Act reads: “Notwithstanding the Provisions of this Act or any written law in existence, the Governor and the Deputy Governor of the Bank shall not participate directly or indirectly in partisan politics, nor contest any election, during their tenure in office.”

Furthermore, Senator Karimi’s amendment seeks to prohibit the use of foreign currency in domestic transactions within Nigeria.

The proposed change involves inserting Section 20(A) immediately after the existing Section 20 in the CBN Act.

The proposed amendment reads: “20(A) Prohibition of the use of foreign currency in democratic transactions:
“(1) No person or body corporate shall use any foreign currency as a means of exchange for goods,
services and other transactions in markets supermarkets, hotels, restaurants, airports and other places of business in Nigeria except by a Bank, licensed Bureau De Change and other financial institutions duly authorized by the Central Bank of Nigeria to trade, deal and use such currency and no individual or business entity in Nigeria shall advertise, denominate or price
its goods or services in any currency other than the Nigerian Naira and Kobo.

“(2) Any person who contravenes subsection (1) of this section commits an offence and shall be liable on conviction to: (a) in the case of an individual, to a fine of N250,000.00 or a term of imprisonment not exceeding six months or both such fine and imprisonment;

“(b) in the case of a corporate entity to a fine of N1,000,000 and a conviction of
three months to its officers or directors who authorized or undertook the transaction.”

On his part, Senator Nwokocha in his lead debate, said the amendment seeks to address all anomalies that has hindered the advancement of the apex bank to handle the ailing economy of the nation.

He said, “The thrust of this amendment is to create a people-centered Central Bank by delivering price and financial system stability and promoting sustainable economic development.

“As the nation grapples with economic issues, we need to reposition the CBN to grow the economy, regulate the exchange rate unauthorize financial transactions and dollarizing the economy.

“This bill seeks to provide for among other things: Separate the head of Management from the head of the governing Board in line with national and international good corporate governance practices;

“Establish a proper governance architecture for the monetary authority for optimal policy and operational effectiveness;

“Enshrine real-time controls and effective accountability in the conduct of central banking in Nigeria

“Reposition the CBN towards pursuit and advancement of its core mandates given the Bank’s pivotal role in the economy; and

“Position the CBN as an apolitical entity that will become a worthy example in national and international monetary policy, banking sector regulation, currency management, and supervision.”