Femi Falana, a Senior Advocate of Nigeria (SAN), human rights lawyer, and activist, has filed a lawsuit against the Central Bank of Nigeria (CBN) regarding the floating of the naira, asserting that it is unlawful.
Reportedly, on June 14, the CBN purportedly directed Deposit Money Banks to allow the naira to float freely against international currencies.
At present, the CBN website lists the exchange rate as ranging from N744 to N746.
Speaking on Channels Television’s Sunrise Daily, Falana argued that the CBN Act obligates the central bank to determine the exchange rate and that there is no provision for floating the naira. He asserted that the decision to allow the naira’s value to be determined by market forces is not supported by the law.
Falana mentioned that he has taken legal action against the CBN at the Federal High Court based on Section 16 of the Central Bank Act, which places the responsibility on the CBN to establish and regulate the naira’s exchange rate against other currencies.
He pointed out that Section 20(1) of the CBN Act designates the currency notes issued by the Central Bank, particularly the naira, as the exclusive legal tender in Nigeria. Additionally, he highlighted that Section 20(5) of the Act criminalizes the use of any other currency in Nigeria without the central bank’s approval, with a potential penalty of six months imprisonment.
Falana emphasized that unless proactive measures are taken by government officials to strengthen the naira and establish it as the sole legal tender, the country’s progress will be hindered.
He also expressed that the Federal Government’s allocation of N5 billion for each state and the Federal Capital Territory (FCT) as palliatives is a temporary strategy intended to divert public attention from the underlying issues.
Falana commented, “These 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. Whatever palliatives that are announced will be eaten up by the dollarization of the economy.”