Reps propose six-year tenure for CBN governor and ban foreign currency
The House of Representatives in Nigeria has moved forward with a bill proposing major reforms to the Central Bank of Nigeria (CBN) Act, including a single, non-renewable six-year tenure for the CBN governor and deputy governors and a ban on the use of foreign currency for domestic transactions. The bill successfully scaled second reading in plenary on Thursday, signalling strong parliamentary support for the changes.
Under the current CBN Act of 2007, the governor and deputies are appointed for a five-year term and may be re-appointed for another five-year term. The proposed amendment would replace that system with a single, non-renewable six-year tenure with the aim of reducing political interference, enhancing institutional stability, and aligning the bank’s governance with global central banking standards. Sponsors of the bill say the reform is designed to strengthen accountability and insulate the apex bank from undue partisan influence.
Another key provision of the legislation is a formal prohibition on using foreign currencies such as the US dollar — in domestic transactions unless done through authorised channels. Lawmakers argue this is necessary to curb the widespread dollarisation of Nigeria’s economy, boost confidence in the naira, and reinforce monetary sovereignty by limiting unofficial foreign exchange use in local trade and business.
Beyond the tenure and currency rules, the bill also proposes structural reforms to the CBN’s governance framework. These include separating the roles of the CBN governor and board chairman, limiting the central bank’s Ways and Means advances to government to a defined percentage of annual revenue, requiring advanced notice and impact assessments before currency redesigns, and improving transparency through enhanced reporting and stress testing. If passed into law, these changes could significantly reshape Nigeria’s monetary policy architecture and strengthen oversight of the nation’s financial system.
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