Business

May 29, 2024

CIS, ASHON express concerns over proposed CBN amendment bill

CBN act

CBN

By Nkiruka Nnorm

Stakeholders in the capital market have voiced their reservations over the proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007, warning of potential adverse economic consequences. 

The Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON) noted that the bill could undermine the independence of the CBN.

The legislation, which has passed its second reading and is scheduled for a public hearing tomorrow, seeks to modify the CBN’s autonomy by subjecting its budget to National Assembly approval and establishing a new Coordinating Committee for Monetary and Fiscal Policies. 

Critics argue that these changes could introduce political interference in monetary policy decisions, hampering the central bank’s ability to manage the economy effectively and objectively.

Oluropo Dada, President/Chairman of the Council of CIS, emphasized the pivotal role of the Central Bank in maintaining economic stability and preserving international credibility. 

“Safeguarding the independence of the Central Bank of Nigeria is crucial for aligning with global economic best practices and ensuring decisions are driven by sound financial principles, free from undue influence,” Dada stated. 

Sam Onukwue, Chairman, ASHON, highlighted the potential impact on investor confidence, saying: “An independent central bank is a cornerstone for maintaining the country’s standing in the global financial community, which directly affects investor confidence, credit ratings, and the overall economic outlook.”

While both organizations acknowledged the merit of some proposed amendments aimed at enhancing corporate governance and compliance, they stressed the importance of considering the broader ramifications. “It is imperative to ensure that fiscal authorities do not encroach upon the central bank’s operational independence, as this is vital for effective and timely monetary policy responses,” Dada emphasized.