By Chinwendu Obienyi and Chukwuma Umeorah

The embers around the proposed Central Bank of Nigeria (CBN) amendment Act by the Federal Government have continued to heat up, resulting in the naira remaining unchanged at $1,339/$1 at the close of business on Tuesday.

The naira had at exactly 11am stood at N1,448/$1 as against N1,339/$1 traded on Monday. However, the local currency reversed to the rate ($1,339.33/$1) at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

The proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007 has been reported to be progressing through the legislative process with a public hearing slated for May 30th. It aims to secure National Assembly’s approval for the CBN’s budget and to create a Coordinating Committee for Monetary and Fiscal Policies.

This, according to financial market experts could hamper the apex bank’s ability to manage the economy effectively and objectively.

Although, the nation’s stock market had been on a bearish run, some investors adopted risk-sentiments by trading on bellwether stocks. As a result, the market capitalisation of the Nigerian Exchange Limited (NGX) have risen by N436 billion in two consecutive trading sessions even as the All Share Index gained 0.53 per cent to close at 98,383.04 points at the close of transactions yesterday.

While there have been calls for the suspension of the CBN Act, analysts believe that it would not be long before investors retreat with their profits.

According to them, this could dampen foreign inflows into the country.

Specifically, President and Chairman of the Council of CIS, Oluropo Dada, emphasized the pivotal role of the central bank in maintaining economic stability and preserving international credibility.

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“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.

Also speaking, Sam Onukwue, Chairman of ASHON, highlighted the potential impact on investor confidence.

“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,” Onukwue cautioned.

For his part, Chief Economist and Partner at SPM Professional, Paul Alaje said, “The independence of the at the Central Bank of Nigeria should not be touched or changed. For no reason should the national assembly subject the central bank to the authority of the Minister of Finance. That will be a big error.

We must condemn the recent decision to revise the CBN act for this purpose.

What we need is a joint commitee between the fiscal and monetary authorities for policy review and convergence. It is to subject that the CBN will be under the finance ministry. Who says you can not have over-ambitious Ministry of Finance in future? Check and balance is important but not at the expense of the CBN. But let the fiscal and monetary authorities be separate and interdependent”.

As the public hearing approaches, financial market participants, economists, and analysts will closely monitor the proceedings and subsequent legislative actions.

The outcome will have far-reaching implications for Nigeria’s economic policy framework and its position in the global economic landscape.


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