IMF Calls For Amendment Of CBN Act, Says Document Outdated

The International Monetary Fund has called for a review of the Act establishing the Central Bank of Nigeria.

The CBN Act was last amended in 2007 and empowers the apex bank to ensure monetary and price stability among others.

But the IMF in the Article IV Consultation on Nigeria seen by THE WHISTLER described the Act as outdated.

IMF said, “A safeguards assessment of the CBN was completed in April 2021 but progress on implementation of recommendations has been limited. The CBN’s internal and external audit mechanisms broadly adhere to international standards.

However, the lender said, “The CBN Act needs to be modernized to strengthen the central bank’s autonomy and governance, and to establish price stability as its primary objective.”

Nigeria’s Vice President Yemi Osinbajo had in 2021 accused the CBN of overstretching its functions by indulging in quasi-fiscal activities.

But the CBN Governor, Godwin Emefiele made an excuse for the apex bank, saying the unconventional approach was adopted to mitigate the shocks induced by the Covid-19 pandemic in 2020.

In the wake of the pandemic, the bank introduced a N300bn Targeted Credit Facility (TCF) for affected households and small and medium enterprises; introduced a N100bn intervention fund in loans to pharmaceutical companies and healthcare practitioners intending to expand and strengthen the capacity of healthcare institutions.

CBN also created a research fund designed to support the development of vaccines in Nigeria as well as a N1trn facility in loans to boost local manufacturing and production across critical sectors.

The IMF in the document advised, “The CBN’s involvement in quasi-fiscal operations and developmental lending activities should be phased out, and financial reporting practices bolstered through full adoption of International Financial Reporting Standards and resumed publication of annual financial statements.

The IMF said, ‘Limited traction has been seen on implementation of the recommendation and staff continues to engage with the authorities on these issues.”