Renowned human rights lawyer Femi Falana has launched legal action against the Central Bank of Nigeria (CBN) over its recent decision to float the Naira currency.
Falana revealed this during an exclusive interview on Channels Television last Friday.
The CBN’s directive, issued in June, instructed Deposit Money Banks to allow the Naira to freely fluctuate against the US Dollar and other international currencies. This move came as the Naira was trading at an exchange rate of 730 to 755 against the Dollar at the Investors and Exporters (I&E) window.
However, Falana strongly criticized the CBN’s decision, deeming it ‘illegal,’ and confirmed that the matter is being challenged in a court of law.
He said, “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.”
“I’ve had to sue the Central Bank of Nigeria at the Federal High Court because Section 16 of the Central Bank Act has imposed a duty on the Central Bank to fix and determine the rate of the Naira vis-a-vis other currencies,” he added.
As of the latest update, the CBN sets the exchange rate between N744 and N746.
Falana, a Senior Advocate of Nigeria (SAN), stated that the CBN Act mandates the apex bank to establish the exchange rate. He pointed to Section 20(1) of the Act, which designates the currency notes issued by the Central Bank as the sole legal tender in Nigeria, explicitly stating “only the Naira.”
Further elaborating, Falana cited Section 20 (5) of the Act, which considers the use of any currency other than the Naira in Nigeria without the central bank’s approval as an offense, subject to prosecution. “The penalty is six months’ imprisonment,” he underscored.
Expounding his argument, Falana contended that without a strong commitment from government officials to bolster the Naira’s position as the exclusive legal tender, the nation’s progress would remain stymied.
“As long as government officials are not prepared to strengthen the Naira and make it the only legal tender in Nigeria, ‘we’re not going to go far’,” he asserted.
On the subject of the Federal Government’s allocation of N5 billion to each state and the Federal Capital Territory (FCT) for the acquisition of food items aimed at aiding the vulnerable population, Falana dismissed these measures as diversionary.
He opined, “They are temporary measures. Some of them are quite diversionary and the people in government have not addressed the root of the crisis, which is the dollarization of the economy.”
He went on to explain that, “Whatever palliatives that are announced will be eaten up by dollarization of the economy.”
Femi Falana’s legal challenge to the CBN’s currency floating decision is poised to spark a significant legal debate on the interpretation of the Central Bank Act and its implications for Nigeria’s economic landscape.
