HUMAN Rights Lawyer Femi Falana has sued the Central Bank of Nigeria (CBN) over its decision to float the country’s currency, which he described as illegal.
Falana condemned the Apex Bank during an interview with Channels Television on Friday, August 18, saying the CBN Act made it mandatory that exchange rates be fixed.
“There’s no provision for floating the naira. It is illegal. You say, ‘The value of the naira will be determined by market forces.’ That is not there in the law.
“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-à-vis other currency,” Falana said.
He added that some economic challenges in Nigeria resulted from the dollarisation of the economy, as some domestic payments were made in dollars, putting pressure on the naira.
“Section 20(1) of the CBN Act provides that the only legal tender in Nigeria shall be the currency notes issued by the Central Bank: only the 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. The penalty is six months’ imprisonment,” he said.
Falana recommended that strengthening the naira and making it the only legal tender in the country would help address the problems with the economy.
Nigeria officially floated the naira after years of having different exchange rates on Wednesday, June 14.
This would allow buyers and sellers of foreign currency in the official FX market to determine rates they find comfortable rather than sticking to a capped price fixed by the CBN.
While the floating has been described as a step in the right direction by economic analysts, there has been no immediate relief for citizens, and the plunge in the value of the naira has led to an increase in cost of imported goods and declining purchasing power.
Ijeoma Opara is a journalist with The ICIR. Reach her via vopara@icirnigeria.org or @ije_le on Twitter.