Falana Sues CBN Over Illegal Floating of Naira, Says It Violates CBN Act

A prominent Nigerian lawyer and human rights activist, Femi Falana, SAN, has filed a lawsuit against the Central Bank of Nigeria (CBN) for allegedly floating the naira illegally.

Falana argued that the CBN’s decision to allow the value of the naira to be determined by market forces is not backed by law and will worsen the economic crisis in the country.

Falana made this assertion on Friday during an interview on Channels Television, which was monitored by Newsflash Nigeria.

He cited Section 16 of the CBN Act as the portion of the country’s law that mandates the central bank to determine the rate at which the naira is exchanged with its foreign pairs.

“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,” Falana said.

“I have 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,” Falana added.

He also pointed out that Section 20 of the CBN Act provides that the only legal tender in Nigeria shall be the currency notes issued by the central bank, and that anyone who spends any other currency in Nigeria without the approval of the CBN has committed an offence and shall be prosecuted.

Falana lamented that Nigeria’s economy is in crisis because it has been dollarized, meaning that domestic transactions such as rent, school fees and others are being made in dollars, thereby putting pressure on the naira. He urged the government to strengthen the naira and make it the only legal tender in Nigeria.

“The major problem is the dollarisation of the economy. As long as the government is not prepared to strengthen the naira, to make the naira the only legal tender in Nigeria, we are going to go further,” Falana said.

Newsflash Nigeria recalls that the CBN floated the naira at the forex market in June, following a surge in demand for foreign exchange due to rising inflation and dwindling oil revenues.

The CBN website on Friday put the exchange rate between N744 and N746 to the dollar. However, some analysts have criticized this move as a devaluation of the naira and a sign of economic mismanagement.

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