Human rights lawyer, Mr. Femi Falana (SAN), yesterday filed a
suit before the Federal High Court in Abuja praying for an order restraining
the Central Bank of Nigeria from allowing market forces to determine the
exchange rate of the naira.
Punch reports that Falana also asked the court in his suit, HC/ABJ/CS/146/16, to direct the CBN to stop the use of the United States of
America’s dollar as a legal tender in Nigeria.
The suit filed by a lawyer in his firm, Mr. Wisdom Elum is yet
to be assigned to a judge.
Falana lamented that the CBN’s monetary policy had led to a
situation where too much naira was made to chase a few dollars with an
attendant weaker naira and adverse multiplier effects such as rising inflation,
closure of factories and high level of unemployment.
He also alleged that the CBN had so “dollarised the economy”
that the foreign currency had become a legal tender, with school fees as well
as rents now being charged and paid in dollars “to the detriment of the
economy.”
He contended that while the CBN had fixed the exchange rate at
N198 to a dollar, and President Muhammadu Buhari had continued to restate his
promise not to devalue the naira, the apex bank “had allowed market forces to
increase the exchange rate to over N400 to a dollar.”
He said, “The devaluation of the currency and dollarisation of
the economy have made mockery of the yet-to-be-passed 2016 budget of the
Federal Government.
“The monetary policy of the defendant (the CBN) has led to a
situation whereby too much naira chase few dollars, thereby making the naira
weaker in relation to the dollar and instigating an adverse multiplier effect.
“The monetary policy of the defendant has also led to increasing
costs, rapidly rising inflation and interest rates, closure of factories and
the attendant high level of unemployment.”
Faland wants the court to determine, “whether the monetary
policy of the defendant, which allows market forces to fix and determine the
exchange rate of the naira is not a violation of Section 16 of the CBN
(Establishment) Act 2007 and Section 16 of the Constitution of the Federal
Republic of Nigeria, 1999 as amended.”
The SAN asked the court to determine whether the CBN decision to
allow the US dollar as a legal tender for payment of any amount in Nigeria was
not a contravention of Section 20 of the CBN Act.
He sought the following prayers: “A declaration that by virtue
of Section 16 of the CBN Act 2007 the defendant shall fix and determine the
exchange rate of the naira by a suitable mechanism devised for that purpose.
“A declaration that the monetary policy of the defendant, which
allows market forces to fix and determine the exchange rate of the naira, is
illegal and unconstitutional as it violates Section 16 of the CBN Act 2007.
“A declaration that the dollarisation of the economy through the
use of the US dollar as a legal tender in Nigeria is illegal and
unconstitutional as it violates Section 20 of the CBN Act, 2007.
“An order of perpetual injunction restraining the defendant from
allowing market forces to determine the exchange rate of the naira in any
manner whatsoever and howsoever.
“An order directing the defendant to stop forthwith the use of
the US dollar as a legal tender in Nigeria in any manner whatsoever and
howsoever.”
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