The International Monetary Fund (IMF) has called for a review of the Central Bank of Nigeria Act 2007 to enhance the bank’s autonomy and governance considering emerging problems and controversies around the Naira redesign policy of the Nigerian apex bank .
In a recent report of the IMF entitled ‘Nigeria: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nigeria released on its website, the CBN’s autonomy has been said to have been disputed due to the CBN’s naira redesign policy.
It is observed that the integrity and autonomy of the CBN needs to be reconsidered as some states’ governors challenge and issue counter-directives on the CBN’s pronouncement on the legal status of the old 1000, and 500 naira notes which is said to be in contrast with the subsisting ruling of the supreme court.
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The IMF, in its article, stressed the importance of maintaining the CBN’s autonomy to make price stability its primary objective. The International financial institution also urged the CBN to abide by international standards by publishing its annual financial statements, and pruning government officials’ presence on its apex board and committees.
According to legit.ng, the IMF also recommended modernizing the CBN Act 2007, strengthening the CBN’s autonomy, safeguarding the independence and tenure of central bank officials, and phasing out some quasi-fiscal activities that may worsen financial repression and weaken the CBN’s price stability mandate.
The IMF article reads in part: “The CBN Act should be updated to make price stability the main goal, improve the bank’s independence by decreasing the number of government officials on the board and committees, and protecting the tenure of central bank officials. Legal changes should establish independent oversight, including a non-executive board and independent audit committee.
“Financial autonomy should be safeguarded through clear statutory limits on credit to government and prohibition of quasi-fiscal operations and developmental lending activities, which need to be phased out.”