The House of Representatives on Thursday advanced a major legislative effort aimed at improving transparency and accountability in the operations of the Central Bank of Nigeria (CBN). This followed the successful second reading of a bill seeking extensive amendments to the Central Bank of Nigeria Act, 1991. The proposed reforms, co-sponsored by House Leader Prof. Julius Ihonvbere and Lagos lawmaker Jesse Onakalausi, enjoyed unanimous support during plenary.
The bill, titled “A Bill for an Act to Amend the Central Bank of Nigeria Act, 1991… and for Related Matters, 2025,” was introduced in response to growing national concerns about weaknesses in the CBN’s corporate governance and oversight structure. These concerns came to the forefront after several controversies surrounding monetary policy decisions, foreign exchange management, and the widely criticised 2022 currency redesign exercise.
Critics have long argued that the central bank’s framework concentrates too much authority in the hands of the CBN Governor, who currently oversees both the bank’s daily operations and board-level oversight. This fusion of responsibilities, analysts say, contributed to years of opaque decision-making, inconsistencies in monetary policy, unchecked discretion in forex administration, and the controversial expansion of Ways and Means financing. The bill seeks to address such governance challenges.
Explaining the motivation behind the bill, co-sponsor Onakalausi said recent domestic and global economic realities have made it necessary to strengthen the CBN’s governance, autonomy, transparency, and accountability. He stressed that the central bank plays a critical role in stabilising the financial system, maintaining monetary credibility, ensuring price stability, and sustaining public confidence in the Nigerian economy.
However, he noted that developments in recent years have exposed serious shortcomings in the existing Act. According to him, recurring problems including foreign exchange distortions, inconsistent policy direction, governance lapses, weak oversight structures, and the chaotic handling of the currency redesign show deep structural gaps in the law regulating the apex bank.
A central feature of the proposed amendments is the separation of the roles of CBN Governor and Board Chairman. Onakalausi explained that in most advanced economies, the Governor handles day-to-day administration while an independent Board provides oversight, ensuring proper checks and balances. The current Act merges these two roles, creating what he described as “an unnecessary concentration of power.” The amendment aims to correct this by establishing a professional board chairperson independent of the Governor.
The bill also seeks to enhance the independence and competence of the Monetary Policy Committee (MPC). It proposes a restructured MPC with improved technical expertise and greater autonomy, aligning Nigeria with global best practices in countries such as the United Kingdom, the European Union, South Africa, and Brazil.
Another major issue addressed in the bill is the long-standing misuse of Ways and Means advances. Onakalausi noted that Section 38 of the current law has been repeatedly abused, contributing to inflationary pressures. The proposed amendments introduce a strict cap, limiting such advances to 10% of the previous year’s actual revenue to enforce fiscal discipline.
In addition, the bill introduces measures to safeguard the naira and improve transparency in foreign exchange management. It proposes mandatory 90-day notice periods, impact assessments, and compulsory National Assembly briefings before major monetary actions such as currency redesigns or demonetisation, to avoid sudden policy shocks.
To enhance accountability, the bill mandates that the CBN submit its audited annual accounts within two months, issue quarterly monetary policy reports, and maintain a publicly accessible website where all its publications will be available.
Other notable provisions include revising Section 6 to create a separate professional Board Chairman and amending Section 8 to introduce a single six-year term for the Governor and Deputy Governors. The bill also requires that at least two Deputy Governors be appointed from within the bank’s internal directorate to strengthen institutional continuity.
The reconstituted MPC would include the Governor, four Deputy Governors, two board members, and four external experts who must be independent and barred from holding any public office.
If enacted, the bill would represent one of the most significant overhauls of the CBN Act since its passage, carrying far-reaching implications for monetary policy, governance, and Nigeria’s broader financial system.
