CBN Act amendments: Group warns against weakening CBN’s autonomy

Ahead of the planned amendment to the Central Bank of Nigeria CBN Act, 2007, the Conference of Civil Societies, on Tuesday in Abuja expressed concerns that the plan may weaken the autonomy of the apex bank.

Adams Otakwu, leader of the Conference, told newsmen that the plan will negatively impact of the bank’s ability to play it’s roles effectively, especially in the areas of regulating the economy and Nigeria’s monetary policy.

Aligning with the position of the International Monetary Fund (IMF), the Conference of Civil Societies said the proposed amendments of the Central Bank of Nigeria (CBN) Act will weaken the bank, while also threatening its autonomy.

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The group said their position, coming ahead of the Thursday, May 30 public hearing on the amendment, is to alert well meaning Nigerians on the ” dangers of removing the banks autonomy”.

“Without prejudice to the proceedings of the public hearing at the National Assembly, which we shall be part of on Thursday, May 30, 2024, we, in a rare move, align with the position of the International Monetary Fund (IMF) that many of the proposed amendments to the extant CBN Act will weaken the Bank as its autonomy will be severely threatened.”

The groups, while appealing to the National Assembly to resist the attempt to deliberately weaken the CBN, added “that attempting to take away the bank’s autonomy under any guise would be tantamount to throwing spanners into the effective management of the economy” .

He noted that Nigerians are desirous of having in place a vibrant economy supported by an independent Central Bank.

He urged the government to focus on fixing the economy and not creating confusion by amending sections of the CBN Act that might weaken the institution.

He said: “Nigerians in the past one year have had great expectations concerning a major turn around in the economy. Particularly of interest is the rate of inflation, which has continued to rise. Only last week, the Central Bank of Nigeria increased its Monetary Policy Rate to 26.25% to check inflation, which now stands at 33.69%.

“While we, as civil society groups, continue to engage the CBN and the fiscal authorities to improve the fortunes of the economy, we are of the view that having an independent central bank in place will help to put inflation under check.

“This is why we would like to sound a note of caution ahead of the proposed amendment to the CBN Act by the National Assembly, which we consider ill-timed.

“Studies worldwide show a direct correlation between independent central banks and adequate checks on inflation. We, therefore, urge the NASS to resist the attempt to deliberately weaken the CBN. Attempting to take away the bank’s autonomy under any guise would be tantamount to throwing spanners into the effective management of the economy.

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“In a few days, the current administration will be a year in office. We should focus on fixing the economy, not creating confusion by amending sections of the CBN Act that might weaken the institution. Now is not the time to push for an amendment to the CBN Act.

“Our advice is that an amendment to the CBN Act, if any, should wait and be well thought out. The present Act contains enough checks that the National Assembly can trigger, if it so wishes.”

Otakwu appealed to the media “to continue to flag issues around exchange rate pressures, rising input prices and security that still challenge the economy in your reports, thereby putting pressure on the fiscal and monetary authorities to play their constitutional roles in managing the economy.”