redesigned 500 naira note

Floating of Naira: Falana Sues CBN for Violating CBN Act

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Human rights lawyer Femi Falana has dragged the Central Bank of Nigeria (CBN) before a federal High Court over what he described as the violation of Section 16 of the Central Bank Act.

In an interview on Channels Television Sunrise Daily, Mr Falana, a Senior Advocate of Nigeria (SAN) said, “There’s no provision for floating the naira,” calling it “illegal”.

Barely a month after assuming office, Bola Tinubu-led government had floated the naira and announced an end to the multiple exchange rate, allowing the prevailing market forces to determine the price at the Investors and Exporters (I&E) window.

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But the Human Rights lawyer said the decision of the Nigeria’s apex bank to float the naira is not backed by law.

He said, “I’ve 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”.

At the close of trade on Thursday, August 18, 2023, I&E exchange rate was $/N740.67, the highest trade for the day was $/799.90 while the rate at the parallel market closed at $/870 (sell).

It is mandatory for CBN to fix exchange rate – Falana

Falana stated that the CBN Act made it compulsory for the apex bank to fix the exchange rate.

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Citing Section 20(1) of the CBN Act, the Senior Advocate of Nigeria the section provides that the only legal tender in Nigeria shall be the currency notes issued by the Central Bank, which is 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”.

Falana said instead of floating the naira, the government should roll out policies that will strengthen the Nigerian currency and make it the only legal tender instead of floating the local currency.

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