Human rights lawyer Femi Falana has revealed that the Central Bank of Nigeria (CBN) is currently facing a legal challenge for its decision to float the Naira currency. Falana made this revelation during an interview on Channels Television on Friday.
The apex bank had instructed Deposit Money Banks to allow the Naira to freely fluctuate against the dollar and other international currencies back in June.
This move was introduced when the Naira’s exchange rate ranged from 730 to 755 against the dollar at the Investors and Exporters (I&E) window.
Falana has criticized the CBN’s decision to float the Naira, labeling it as ‘unlawful’ and subject to court scrutiny.
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,” he said.
“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 currency,” he added.
As of Friday, the exchange rate set by the CBN stands at N744 to N746.
The Senior Advocate of Nigeria (SAN) pointed out that the CBN Act mandates the central bank to establish the exchange rate.
He highlighted that Section 20(1) of the CBN Act specifies that the official legal tender within Nigeria must be the currency notes issued by the Central Bank, exclusively the Nigerian naira.
Section 20 (5) of the Act also provides that anybody who spends any other currency in Nigeria without the approval of the central bank has committed an offence “and shall be prosecuted”, he explained, adding, “The penalty is six months’ imprisonment.”
Falana expanded on his point, stating that unless government officials are committed to bolstering the Naira and establishing it as the sole official currency in Nigeria, progress will remain limited.
Regarding the Federal Government’s endorsement of a N5 billion allocation for each state, along with the Federal Capital Territory (FCT), to acquire food items for distribution to the underprivileged in their respective regions, Falana remarked that these actions are intended to divert attention.
He said, “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 dollarisation of the economy,” he said.
“Whatever palliatives that are announced will be eaten up by dollarisation of the economy,” he added.
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