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Human rights lawyer Femi Falana has taken legal action to challenge what he considers the “illegitimate” decision by the Central Bank of Nigeria to allow the Naira to float freely.
In a recent move on June 14, when the Naira was trading at around 730 to 755 against the US Dollar at the Investors and Exporters (I&E) window, the Central Bank reportedly instructed Deposit Money Banks to permit the Naira to fluctuate against the US Dollar and other global currencies.
As of the most recent data available, the CBN website indicates an exchange rate ranging between N744 and N746 to the US Dollar.
Speaking on Channels TV on August 18, Falana argued that the CBN Act obligates the central bank to establish the exchange rate rather than allowing it to float freely.
“The notion of letting the Naira’s value be determined by market forces is not stipulated in the law. I’ve had to take legal action against the Central Bank of Nigeria in the Federal High Court because Section 16 of the Central Bank Act mandates the Central Bank to set and ascertain the Naira’s exchange rate relative to other currencies,” he stated.
He pointed out that Section 20(1) of the CBN Act designates the currency notes issued by the Central Bank, i.e., the Naira, as the only legal tender in Nigeria.
Furthermore, he explained that Section 20 (5) of the Act establishes an offense for anyone who uses a different currency in Nigeria without the central bank’s authorization. Such individuals “shall be prosecuted” and face a penalty of six months’ imprisonment.
Falana contended that unless government officials take concrete steps to strengthen the Naira and establish it as the sole legal tender in Nigeria, meaningful progress won’t be achieved.
The Senior Advocate of Nigeria also commented on the Federal Government’s allocation of N5 billion to each state and the Federal Capital Territory (FCT). Although the National Economic Council (NEC) stated that this funding would enable the procurement of food items for distribution to the impoverished within their respective states, Falana criticized these measures as diversionary.
“These measures are temporary and some are merely distractions. Government officials have failed to address the root cause of the crisis, which is the increasing reliance on the US Dollar. Any relief measures announced will essentially be eroded by the pervasive use of the US Dollar in the economy,” he contended.
