Falana: CBN Cannot Float Naira, Heads to Court

By Aduragbemi Omiyale

A legal luminary and human rights activist, Mr Femi Falana (SAN), has described the floating of the Naira by the Central Bank of Nigeria (CBN) in June 2023 as illegal.

Speaking on Friday on Channels Television’s breakfast programme, Sunrise Daily, the constitutional lawyer said the CBN Act only permits the apex bank to fix the exchange rate and not delegate this function to “market forces.”

Mr Falana cited Section 16 of the CBN Act as the portion of the country’s law that mandates the central bank to determine the rate at which the Naira is exchanged with its foreign pairs.

“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,” the respected lawyer said on the show monitored by Business Post.

“The exchange rate of the Naira shall be determined, from time to time, by a suitable mechanism devised by the bank (CBN) for that purpose,” Section 16 of the CBN Act stated.

About two months ago, the CBN unified the exchange rates of the Naira to the Dollar at the different segments of the foreign exchange (FX) market.

This action was taken after several analysts and global money lenders like the International Monetary Fund (IMF) and the World Bank advised Nigeria to toe this path.

But Mr Falana argued that this action is illegal, noting that he has made an effort to challenge this in court.

“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,” he disclosed.