CEI and ASHON express concern over the bill that seeks to modify the autonomy of the CBN

Capital market stakeholders have expressed reservations over the proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007, warning of possible adverse economic consequences.

In a corporate presentation to the NGX on Tuesday, the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON) expressed concerns that the bill could undermine the independence of the CBN.

The legislation, which has passed its second reading and is scheduled for a public hearing on May 30, seeks to modify the autonomy of the CBN by submitting its budget to the approval of the National Assembly and establishing a new coordinating committee for monetary and fiscal policies.

Critics argue that these changes could introduce political interference into monetary policy decisions, hampering the central bank’s ability to manage the economy effectively and objectively.

The President and Chairman of the CIS Council, Oluropo Dada, highlighted the critical role of the CBN in maintaining economic stability and preserving international credibility.

“Safeguarding the independence of the Central Bank of Nigeria is crucial to aligning with global economic best practices and ensuring that decisions are driven by sound financial principles, free from undue influence,” Dada said.

Likewise, ASHON Chairman Sam Onukwue highlighted the potential impact on investor confidence.

He said: “An independent central bank is the cornerstone of maintaining the country’s position in the global financial community, which directly affects investor confidence, credit ratings and the overall economic outlook.”

While both organizations acknowledged merit in some proposed amendments aimed at improving corporate governance and compliance, they emphasized the importance of considering the broader ramifications.

“It is imperative to ensure that fiscal authorities do not encroach on the operational independence of the central bank, as this is vital for effective and timely monetary policy responses,” Dada emphasized.

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.”