IMF WARNS NIGERIA AGAINST WEAKENING CBN’S AUTONOMY

The International Monetary Fund has warned the Nigerian government against the ongoing attempts to weaken the autonomy of the Central Bank of Nigeria (CBN).

The IMF issued the warning in a report of its latest executive board’s report, highlighting points of discussion and recommendations with Nigerian officials.

On November 9, 2023, a bill to amend Section 6 of the CBN Act to create the position of Chairman of the Board of the CBN, separate from the governor for checks and balances, scaled second reading at the House of Representatives.

However, in its latest report, the IMF expressed some concerns.

“There is a risk that ongoing work by members of the legislature to amend the CBN Act could weaken the central bank’s governance and autonomy,” said IMF in the report. 

It added, “Several elements in the current draft Bill as disclosed in the public domain would, if enacted, significantly weaken the institutional framework and its independence, e.g., the envisaged ‘Coordinating Committee for Monetary and Fiscal Policies’ chaired by the Minister of Finance, could undermine the autonomy of the CBN and its Monetary Policy Committee, which is separately chaired by the governor of the CBN.”

The global financial organisation also lamented that the draft bill  does not include the “safeguards assessment,” saying, “Progress on implementing recommendations from the 2021 Safeguards Assessment of the CBN has been limited.”

The IMF stressed that “while the CBN has published recent annual financial statements and announced plans to phase out development lending and monetary financing, other recommendations remain outstanding.”

Urging the CBN to adopt International Financial Reporting Standards to fully enhance transparency, the IMF assured that its officials would continue to engage with the Nigerian government on the outstanding recommendations, including those regarding the CBN Act.

According to Francis Ejiroghene Waive, the bill’s sponsor, the proposed amendment adds a new paragraph, section 6(2)(a), which mandates that the chairman of the board shall be a former governor of the CBN, a former chairman of the bank, or a former managing director of a bank.

Mr Waive also proposed an amendment to section 7 of the CBN Act.