Business News

National Assembly proposes N1 trillion capital base for CBN, single term for CBN Governor, deputies 

The National Assembly has made strides with a proposal that could see the Central Bank of Nigeria’s (CBN) capital base soar to a whopping N1 trillion.

This proposition was part of a broader legislative effort encapsulated in a bill that recently advanced to its second reading in the Senate. 

This bill, titled “Bill for an Act to Amend the Central Bank of Nigeria Act, 2007 to strengthen the Bank, and for other related matters thereto, 2024 (SB. 325),” is spearheaded by Senator Adetokunbo Abiru (APC, Lagos East), alongside the robust support of 41 other Senators, to amend various facets of the existing CBN Act, 2007. 

Key among the proposed changes is a dramatic increase in the CBN’s authorized capital from the current N100 billion—a figure that legislators argue has been significantly diluted over time due to the naira’s devaluation.

This financial bolstering is seen as a crucial step in ensuring the CBN remains a formidable pillar in Nigeria’s economic landscape. 

Senator Abiru, in his lead debate, underscored the bill’s potential to significantly empower the CBN in fulfilling its core mandates, marking a pivotal step towards enhancing Nigeria’s financial system integrity and stability. 

He said: 

Another aspect of the bill is the restructuring of the CBN’s leadership tenure. It seeks to amend the apex bank’s law to introduce a single, non-renewable term of six years for both the governor and deputy governors, a move that could significantly influence the bank’s governance dynamics. 

Senator Abiru said: 

Additionally, the bill proposes a meticulous overhaul of the country’s currency replacement process. Specifically, it advocates for a transition period where both old and new currency notes would concurrently serve as legal tender for two years. 

This strategy is designed to mitigate any potential economic disruptions, stipulating that the CBN must retain at least 70% of the new currency stock before phasing out the old notes.

This phased approach aims to ensure a seamless transition that preserves economic stability.  

Moreover, the legislative proposal includes a measure to enforce stricter financial discipline within the federal government, compelling it to repay loans obtained from the CBN under Ways and Means advances within a three-month window from the issuance date. 

Senator Abiru said: