ABUJA, Nigeria — Human rights lawyer Femi Falana has declared the Central Bank of Nigeria’s (CBN) decision to float the naira under President Bola Tinubu’s administration as unlawful, revealing that the move is currently facing legal challenge.
On June 14, amidst fluctuating naira rates between 730 and 755 against the dollar in the Investors and Exporters (I&E) window, the CBN reportedly advised Deposit Money Banks to freely peg the naira against the dollar and other global currencies.
As of the last update on the CBN website, the exchange rate settled between N744 and N746.
Falana on Friday, August 17, 2023, asserted that the Central Bank Act necessitates that the CBN set the exchange rate.
“There’s no provision in the law allowing for a floatation of the naira. Declaring that ‘Market forces will influence the value of the naira’ is not legally supported,” Falana emphasized.
Falana revealed that he has taken the legal battle to the Federal High Court, referencing Section 16 of the Central Bank Act which mandates the CBN to define and fix the naira’s rate against other currencies.
Further elaborating on the legal provisions, Falana cited Section 20(1) of the CBN Act, which states that the sole legal currency in Nigeria is the naira as issued by the Central Bank.
He also brought attention to Section 20(5) of the Act, which decrees that unauthorized usage of foreign currency within Nigeria constitutes an offense punishable by a six-month prison term.
Falana stressed that the country’s economic challenges will persist until there’s a committed effort by government officials to bolster the naira and solidify its status as Nigeria’s only legal tender.
Regarding the Federal Government’s recent approval of N5 billion for each state and the Federal Capital Territory, FCT, aimed at alleviating food scarcity, Falana described such interventions as temporary and diversionary.
He emphasized the fundamental issue being the “dollarisation of the economy,” concluding, “No matter the nature of economic relief measures, they’ll be overshadowed by the economy’s pervasive dollarisation.”
