Human rights lawyer, Mr. Femi Falana (SAN), filed a suit before the Federal High Court in Abuja on Wednesday, praying for an order restraining the Central Bank of Nigeria from allowing market forces to determine the exchange rate of the naira.
The senior advocate also asked the court in his suit, FHC/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 was filed on behalf of Falana by a lawyer in his firm, Mr. Wisdom Elum.
The CBN is sued as the sole defendant in the suit, which has yet to be assigned to a judge.
Falana alleged in the suit 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.”
A supporting affidavit deposed to by another lawyer in Falana’s law firm, Mr. Femi Adedeji, stated, “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.”
The lawyer, therefore asked 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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