Nigerian lawyer Femi Falana (SAN) said he has sued the Central Bank of Nigeria (CBN) for alleged illegal floating of the naira.
Falana in an interview on Channels Television’s Sunrise Daily on Friday said that the decision of the CBN under President Ahmed Bola Tinubu to float the naira is illegal and being challenged in court.
He 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’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.
“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.”
CBN on June 14, 2023 reportedly told Deposit Money Banks to freely float the naira against the dollar and other international currencies. CBN website on Friday put the exchange rate between N744 and N746 to the dollar.
At the time the apex bank took that decision, the naira traded between 730 and 755 to the dollar at the Investors and Exporters (I&E) window.
Falana alleged that Nigeria’s economy is in crisis because it has been ‘dollarized’.
He questioned the reason why domestic transactions such as rent, school fees and others are being made in dollars, thereby putting pressure on the Naira.
“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.”