Renowned human rights lawyer, Femi Falana, has initiated legal action against the Central Bank of Nigeria (CBN) in response to its decision to float the Nigerian Naira. Falana confirmed this development during an interview on Channels Television held on Friday.
The CBN’s directive, issued in June, instructed Deposit Money Banks to allow the Naira to float freely against the US Dollar and other international currencies. At the time of the policy’s announcement, the Naira was trading between 730 and 755 to the Dollar at the Investors and Exporters (I&E) window.
Femi Falana denounced the CBN’s move to float the Naira, terming it as ‘illegal’ and asserting that it is being contested in a court of law. He stated, “There’s no provision for floating the Naira. It’s illegal. You say, ‘The value of the Naira will be determined by market forces.’ That is not there in the law.”
Falana explained that he has filed a lawsuit against the Central Bank of Nigeria at the Federal High Court. He pointed to Section 16 of the Central Bank Act, which imposes the responsibility on the Central Bank to establish and ascertain the Naira’s exchange rate in relation to other currencies.
As of Friday, the CBN reported the exchange rate to be between N744 and N746 for one US Dollar. Falana underscored that the CBN Act explicitly mandates the apex bank to set the exchange rate. He referred to Section 20(1) of the CBN Act, which designates the currency notes issued by the Central Bank, specifically the Naira, as the sole legal tender in Nigeria.
Additionally, Section 20(5) of the Act stipulates that utilizing any currency other than the Naira in Nigeria without the central bank’s endorsement constitutes an offense punishable by imprisonment of up to six months.
Falana went on to argue that the government’s reluctance to strengthen the Naira as the exclusive legal tender in Nigeria hampers progress. He voiced his skepticism towards the effectiveness of the Federal Government’s recent decision to allocate N5 billion to each state and the Federal Capital Territory for purchasing food items to distribute to the poor. Falana deemed these measures diversionary and emphasized that they do not address the core issue of the economy’s increasing dollarization.
In light of these legal proceedings, the matter of the Naira’s floatation remains a subject of significant concern and discussion, with Falana’s intervention spotlighting the legal and economic complexities surrounding the CBN’s decision.