Prominent human rights lawyer, Femi Falana, SAN, has strongly criticized the decision by the Central Bank of Nigeria to allow the naira to float freely against international currencies, a move he deems illegal.
Falana has taken legal action to challenge this decision, asserting that it goes against the provisions outlined in the CBN Act.
On June 14, the naira’s value was reportedly allowed to fluctuate between 730 and 755 against the dollar at the Investors and Exporters window.
This alleged instruction from the CBN prompted commercial banks to enable the free float of the naira. Presently, the CBN’s official website lists the exchange rate as N744 to N746.
During a recent appearance on Channels Television’s Sunrise Daily, Falana argued that the CBN’s mandate, as stipulated by the CBN Act, includes the responsibility to set the exchange rate.
He emphasized that the concept of allowing market forces to determine the naira’s value is absent from the law.
Falana is currently pursuing legal action against the Central Bank of Nigeria in the Federal High Court, citing Section 16 of the CBN Act, which explicitly places the duty of determining the naira’s exchange rate on the central bank.
He also pointed out Section 20(1) of the Act, which designates the official legal tender in Nigeria as the currency notes issued solely by the Central Bank, specifically referring to the naira.
Highlighting Section 20(5) of the CBN Act, Falana noted that using any currency other than the naira within Nigeria without the central bank’s approval is considered an offense punishable by a six-month prison term.
Falana emphasized that the real solution lies in strengthening the naira’s status as the exclusive legal tender in Nigeria, expressing concern that temporary measures such as allocating N5 billion to each state and the Federal Capital Territory (FCT) as palliatives serve to divert attention from addressing the underlying issue.
In Falana’s view, these measures fail to address the core problem, which is the growing dollarization of Nigeria’s economy.
He cautioned that any palliatives announced would ultimately be consumed by the persistent dollarization trend, unless substantive steps are taken to reverse the situation.
