Reps mull law for uniform exchange rate

House of Representatives is expected to commence debate on a bill which seeks to ensure uniform exchange rate throughout the country both at the Bank, Commercial Banks, or any such persons licensed to carry on the business of Bureau De Change (BDC).

The proposed legislation seen by Nigerian Tribune, also seeks to regulate time stipulated for notice on change of the legal tenders, streamlining the CBN’s budgetary process and diversifying the Board of the Bank by including persons from outside the Bank so as to bring about a more accountable Board.

The proposed member bill, sponsored by Hon. Francis Waive seeks to amend Central Bank of Nigeria (CBN) Act, Cap. C4 Laws of the Federation of Nigeria, 2004 and for related matters.

Clause 1 of the bill amendment of the Principal Act, Hon. Waive proposed amendment to Section 6 subsection 2 of the CBN Principal Act, 2004.

He proposed that: “The Board shall consist of: Chairman who shall be a former Governor of the Central Bank of Nigeria (CBN) or a former Chairman of the Bank or a former Managing Director of a Bank; The Governor; The Permanent Secretary, Federal Ministry of Finance; The Accountant-General of the Federation; The Permanent Secretary, National Planning Commission; a Representative of the Federal Inland Revenue Service not below the rank of a Director; and a Representative of the Nigerian Deposit Insurance Corporation not below the rank of a Director.”

He also proposed amendment to Section 6 (3) of the Principal Act be amended by deleting paragraph (a) and amending Section 7 (1) of the Principal Act by replacing the section with the following new section; which states that “the Governor or in his absence the most senior Deputy Governor shall be in charge of the day-to-day management of the Bank and shall be answerable to the Board for his acts and decisions”.

He also proposed amendment to Section 8 (3) by replacing the section with the following new section, which provides that: “The salaries or allowances including pension and other allowances payable to the Governor and to the Deputy Governors shall be as stipulated, from time to time, by the Revenue Mobilization Allocation and Fiscal Commission subject to approval of the President.”

Hon. Waive who is the Chairman, House Committee on Rules and Business also proposed amendment to Section 16, which stipulates that: “the exchange rate of the Naira shall be determined, from time to time, by a suitable mechanism devised by the Bank for that purpose, provided that such rates shall at all times be uniform throughout the country both at the Bank, Commercial Banks or any such persons licensed to carry on the business of Bureau De Change.”

In the same vein, Clause 7 of the proposed bill which seeks to amend Section 20 (3) of the CBN Principal Act, by inserting the phrase ”Not less than 1 year’ and it will now read as follows:
“Notwithstanding sub-sections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice not less than 1 year on that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.

Hon. Waive also proposed introduction of a new paragraph be inserted into section 20 (3) which states that: “Where a new note is to be introduced to replace an old note, during the duration of the notice the old notes and new notes shall be used simultaneously as legal tenders pending the expiration of the notice for which any such notes cease to be a legal tender.”

Clause 9 of the proposed bill also seeks to introduce a new section – 48 and renumber the existing section 48-61 as 49-61 which provides that: “The Board shall prepare and submit to the National Assembly through the President not later than 30th September of each year an estimate of its expenditure and income during the next succeeding year.”