Finance

Femi Falana Launches Landmark Legal Battle Challenging CBN’s Naira Float Decision: A Clash over Currency Authority

Published

1 month ago

August 19, 2023

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.

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Finance

Nigeria’s Tax Revolution: Shifting Burden to the Wealthy and Streamlining the System

Published

2 days ago

September 29, 2023

Samed Olukoya

President Bola Tinubu’s administration is set to revolutionize the nation’s tax system.

The ambitious plan seeks to redistribute the tax burden, making the wealthy pay their fair share while stimulating business growth through corporate tax cuts.

The cornerstone of this tax reform initiative is a push to increase Nigeria’s tax revenue from 11% to 18% of Gross Domestic Product (GDP) within three years.

Spearheading this transformation is Taiwo Oyedele, who leads a panel appointed by President Tinubu.

Oyedele articulated the primary objectives of the reform, saying “We aim to make the rich pay what is fair and protect those in poverty.”

This move is crucial in a country where extreme wealth disparities persist, with only a small fraction of the population enjoying immense riches.

Notably, the plan also includes a reduction in the corporate income tax rate, which currently stands at an effective rate of over 40%.

The aim is to benchmark this rate against Nigeria’s international peers, fostering a more business-friendly environment.

Nigeria’s tax system has long been plagued by complexity, with nearly 70 different taxes and overlapping jurisdictions.

The reform initiative seeks to simplify this by streamlining tax structures and drastically reducing the number of taxes to single digits.

Also, a tax amnesty is under consideration, aimed at encouraging tax compliance and offering relief for past debts. The hope is that by fostering transparency and accountability, more Nigerians will willingly contribute to the country’s fiscal health.

In a nation where government debt has surged dramatically in recent years, this tax revolution is seen as a pivotal step towards reducing the deficit and ensuring sustainable economic growth.

Finance

Federal Government’s $3 Billion Rescue Plan to Bolster Naira Stability

Published

2 days ago

September 29, 2023

Samed Olukoya

The National Economic Council (NEC) has confirmed the deployment of the $3 billion emergency loan-for-crude oil, secured by the Federal Government in August, for the stabilization of the national currency.

The naira’s value has been under siege, with fluctuations in the Investors & Exporters’ window and a parallel market rate that briefly hit N1000/$ this month.

Addressing reporters following the 136th NEC meeting at the Aso Rock Presidential Villa, Nasarawa State Governor Abdullahi Sule expressed confidence in the plan.

He stated, “With the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”

The emergency loan, secured from Afrexim Bank, was initially intended to relieve pressure on the naira, facilitate the settlement of taxes and royalties in advance, and provide the Federal Government with vital dollar liquidity for naira stabilization.

The recent nomination of Olayemi Cardoso as the new Central Bank of Nigeria (CBN) governor by President Bola Tinubu has already shown promise.

The naira experienced a boost in the black market, strengthening by N10 against the dollar, closing at N990/$1.

Governor Sule indicated that the implementation of the intervention would require careful planning and time.

He emphasized the need for the new CBN team to devise effective strategies. In response to inquiries about a supplementary budget, Sule stated that there is no immediate need for one, as the situation does not warrant it.

As Nigeria’s economic landscape faces evolving challenges, the NEC’s decision to harness the $3 billion loan offers a glimmer of hope for a more stable naira in the near future.

Finance

Former FIRS Chairman Muhammad Nami Accused of Controversial N6 Billion Payments After Sudden Exit

Documents reveal questionable approvals and alleged backdating, raising concerns over financial misconduct

Published

3 days ago

September 28, 2023

Samed Olukoya

Muhammad Nami, the former chairman of the Federal Inland Revenue Service (FIRS), is under scrutiny for approving payments totaling N6 billion to contractors and consultants just days after his abrupt removal from office.

Documents obtained by TheCable shed light on these controversial transactions.

Nami, who was succeeded by Zacchaeus Adedeji, greenlit the payments on September 16, two days after his removal on September 14.

Sources privy to the situation, although not authorized to speak publicly, claim that Nami directed staff to work over the weekend to finalize these transactions.

Additionally, files were allegedly moved from the FIRS headquarters to his residence, where they were purportedly “backdated and signed.”

Perhaps the most eyebrow-raising revelation is that Nami transferred approximately N5 billion from the FIRS account to the Joint Tax Board (JTB) without apparent justification.

It is reported that the FIRS director of finance and accounts reluctantly approved these payments after warning Nami about potential repercussions.

Nami allegedly reassured his subordinates that the incoming FIRS chairman would remain oblivious to these approvals.

Also, documents indicate that Nami approved significant payments, including N1.4 billion for a ‘Business Case for Strategic Leadership’ retreat, N250 million for FIRS Data Mining Management and Analytics in Taxation Course, and N221 million for a ‘Skill Development and Management Improvement Workshop Training.’

Curiously, Nami also appropriated over N81 million for a study visit to the Inland Revenue of Malaysia.

The FIRS, when contacted for comment, remained tight-lipped about the situation. Spokesperson Abdullahi Ismaila stated that he had no knowledge of the payments, while Tobi Johannes, Nami’s former media aide, distanced himself from the matter, emphasizing that his role ceased when Nami’s tenure ended.

These revelations have ignited concerns about financial misconduct within the FIRS and have raised questions about the oversight and accountability of government agencies. The full extent of these allegations is yet to be determined as investigations into the payments and their legitimacy continue.