Femi Falana, SAN, a human rights attorney, has criticised the Central Bank of Nigeria’s flotation of the naira.
Falana also revealed that he is filing a lawsuit over the decision to flog the naira on the grounds that it is “illegal.”
The CBN allegedly gave deposit money banks the order to let the naira float freely against foreign currencies on June 14, when it was trading at a range of 730 to 755 against the dollar at the Investors and Exporters window. The current exchange rate is stated as N744 to N746 on the CBN website.
However, Falana stated that the CBN Act requires the central bank to fix the currency rate in a speech on Channels Television’s Sunrise Daily on Friday.
There is no provision for the naira to float. It’s forbidden. You state, “Market forces will determine the value of the naira. The law says nothing about that.
“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-à-vis other currency,” he stated. “I’ve had to sue the Central Bank of Nigeria at the Federal High Court.”
Falana asserts that the naira-denominated currency notes produced by the Central Bank of Nigeria are the only ones recognised as official legal money in Nigeria under Section 20(1) of the CBN Act. He continued by citing Section 20(5) of the Act, which makes it illegal to use any other currency in Nigeria without the central bank’s permission and carries a six-month prison sentence.
Our growth will be constrained, according to Falana, unless government authorities take steps to strengthen the naira and make it the only legal tender in Nigeria.
The Federal Government’s approval of N5 billion for each state and the FCT as palliatives, he added, is merely a short-term fix meant to deflect attention.
They are only temporary solutions. Some of them are pretty pointless, and those in power have not addressed the dollarization of the economy, which is what is causing the issue.
Whatever palliatives are offered, he said, “the dollarization of the economy will eat them up.”
