*Says Section 16 of CBN Act makes floating of Naira illegal, heads to court
By BASHIR ADEFAKA
“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.
Popular human rights lawyer Mr. Femi Falana (SAN) says the decision of Central Bank of Nigeria (CBN) under President Bola Ahmed Tinubu to float the Naira is illegal and, for that reason, he informs that it is being challenged in court.
On June 14, at a time when the naira traded between 730 and 755 to the dollar at the Investors and Exporters (I&E) window, the apex bank reportedly told Deposit Money Banks to freely float the Naira against the Dollar and other international currencies.
As of today that is Friday August 18, 2023, the CBN’s website puts the exchange rate between N744 and N746 although in the reality (black) market patronised by the ordinary man on the street in need of foreign exchange, the rate has gone N1,000 to $1.
Mr. Falana, while featuring as a guest on Channels Television’s Sunrise Daily Friday morning, said the CBN Act made it compulsory for the apex bank to fix the exchange rate.
“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,” he said.
Falana continued, “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.”
He noted that 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”, he explained, adding, “The penalty is six months’ imprisonment.”
Falana argued further that as long as government officials are not prepared to strengthen the naira and make it the only legal tender in Nigeria, “we’re not going to go far”.
The Senior Advocate of Nigeria also commented on the Federal Government’s approval of N5 billion for each state and the Federal Capital Territory (FCT).
While the National Economic Council (NEC) said this enabled them to procure food items for distribution to the poor in their respective states, Falana argued that the measures were diversionary.
“They 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 dollarisation of the economy,” he said.
“Whatever palliatives that are announced will be eaten up by dollarisation of the economy.”
