Legislators in Nigeria want to create a new committee led by the minister of finance to determine interest rates in place of the central bank.
A set of three legislative proposals is currently progressing through the Senate, awaiting debate before they can proceed to President Bola Tinubu’s desk for his approval or rejection. These proposals aim to transfer the authority of determining interest rates from the central bank to a new team led by the minister of finance.
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The country’s financial sector concurs with the International Monetary Fund’s warning that legal changes could jeopardize central banks’ independence.
Nigeria is currently experiencing its highest rate of inflation in 28 years, and part of the issue is due to previous central bank policies that funded the government through money printing.
After the previous head of the central bank was arrested on suspicion of fraud, which he denies, Tinubu appointed Cardoso in September.
The drafts propose to create a coordinating committee for monetary and fiscal policies, led by the finance minister, and to include the head of the revenue agency and the auditor general on the bank’s board.
