Stakeholders in Nigeria’s capital market have expressed 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) shared concerns that the bill could undermine the independence of the Central Bank of Nigeria (CBN).
If passed, the amendment 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.
The legislation has passed its second reading and is scheduled for a public hearing on May 30th.
The experts 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 and Chairman of the Council of CIS, emphasised the pivotal role of the central bank in maintaining economic stability and preserving international credibility.
He said, “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.”
Sam Onukwue, Chairman of ASHON, spoke on the potential impact on investor confidence, saying that “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.”
Both organizations acknowledged the merit of some proposed amendments which will enhance 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 emphasised.
Alleluia is the Assistant Editor and Content Writer at LagosPost.ng. She is a prolific writer and editor, she has written features and news stories on Lifestyle, Sports, Business, Politics and B2B marketing. She is also an event coordinator, host and social media content creator.
