Falana Challenges CBN’s Naira Floating Policy in Court

Human rights lawyer Femi Falana, has revealed that legal action has been taken against the Central Bank of Nigeria (CBN) over its recent move to float the Naira currency.

Speaking in an interview on Channels Television, Falana labeled the CBN‘s decision to float the Naira as ‘illegal’ and shared that this matter is currently being challenged in court.

The CBN had instructed Deposit Money Banks to allow the Naira to freely float against international currencies, such as the US dollar, in June. This move came at a time when the Naira was trading between 730 and 755 to the dollar at the Investors and Exporters (I&E) window.

Falana pointed out that the policy lacked a legal foundation, stating, “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.” He emphasized that he had filed a lawsuit against the CBN at the Federal High Court, citing Section 16 of the Central Bank Act, which mandates the Central Bank to fix and determine the exchange rate of the Naira against other currencies.

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The Senior Advocate of Nigeria (SAN) referred to Sections 20(1) and 20(5) of the CBN Act, which state that the only legal tender in Nigeria is the currency notes issued by the Central Bank and that anyone who uses other currencies without the central bank’s approval commits an offense.

Discussing the Naira’s current exchange rate, Falana explained that the CBN’s own data placed it between N744 and N746 against the dollar as of Friday.

Falana also criticized the government’s response to economic challenges, particularly the recent approval of N5 billion for each state and the Federal Capital Territory to purchase food items for distribution to the poor. He deemed these measures as temporary and diversionary, arguing that they fail to address the root of the crisis – the dollarization of the economy. Falana highlighted the need for a stronger Naira and the discontinuation of the practice of using other currencies within the country.