Falana Takes CBN To Court For Floating Naira (DETAILS)

Falana Takes CBN To Court For Floating Naira (DETAILS)

Human rights lawyer Femi Falana has asserted that the decision made by the Central Bank of Nigeria (CBN) under President Bola Tinubu to float the naira is unlawful and is currently facing legal challenges.

Reportedly, on June 14, when the naira was trading at around 730 to 755 to the dollar in the Investors and Exporters (I&E) window, the central bank instructed Deposit Money Banks to allow the naira to float freely against the dollar and other foreign currencies.

As of a recent date, the CBN has stated that the exchange rate stands at approximately N744 to N746.

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However, Falana, who appeared as a guest on Channels Television’s “Sunrise Daily,” argued that the CBN Act mandates the central bank to set the exchange rate and that there is no provision for floating the naira.

He highlighted, “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.” He shared that he has taken the Central Bank of Nigeria to the Federal High Court due to Section 16 of the CBN Act, which requires the CBN to establish and decide the naira’s rate compared to other currencies.

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Falana pointed to Section 20(1) of the CBN Act, which designates the currency notes issued by the CBN as the sole legal tender in Nigeria, namely “only the naira.”

Furthermore, Section 20(5) of the Act outlines that anyone using any other currency within Nigeria without central bank approval is committing an offense and could face prosecution. The penalty for this is a potential six months of imprisonment.

Falana emphasized that unless government officials take steps to strengthen the naira and make it the exclusive legal tender in Nigeria, progress will be hindered.

He also commented on the Federal Government’s decision to allocate N5 billion to each state and the Federal Capital Territory (FCT). While the National Economic Council indicated that this funding was intended for purchasing food items to distribute to the impoverished within their respective areas, Falana argued that these measures are short-term and do not address the underlying problem of the economy’s dollarization.

He expressed, “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.” Falana added that any relief measures announced would be impacted by the economy’s dollarization.