The Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON) have raised concerns over the proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007.

The capital market stakeholders worry that the bill could undermine the Central Bank of Nigeria’s (CBN) independence, warning of potential adverse economic consequences.

The legislation, which has passed its second reading and is scheduled for a public hearing on May 30, 2024, seeks to modify the CBN’s autonomy by subjecting its budget to National Assembly approval and establishing a new coordinating committee for monetary and fiscal policies.

Critics argue that these modifications could introduce political interference in monetary policy decisions, hampering the CBN’s ability to manage the economy effectively and objectively.

President and chairman of the council of CIS, Oluropo Dada emphasised the pivotal role of the Central Bank in maintaining economic stability and preserving international credibility.

He said: “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.”

However, Dada stressed the imperativeness of ensuring that fiscal authorities do not encroach upon the Central Bank’s operational independence, noting, “This is vital for effective and timely monetary policy responses.”

ASHON Chairman, Sam Onukwue 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.

Although both organisations acknowledged the merit of some proposed amendments aimed at enhancing corporate governance and compliance, they underlined the importance of taking into account the wider implications.

Economists, analysts, and participants in the financial markets meanwhile, will be keenly following the proceedings and any legislative moves that ensue as the public hearing draws closer.

The result will profoundly impact Nigeria’s economic policy framework and its standing in the global economic landscape.