Prominent human rights activist and senior lawyer, Mr. Femi Falana, has taken the Central Bank of Nigeria (CBN) to court, alleging the dollarization of Nigeria’s economy and seeking to address the negative consequences of this trend. The Senior Advocate of Nigeria (SAN) filed a lawsuit marked FHC/L/CS/476/23, before the Federal High Court in Lagos, with the aim of addressing what he sees as the CBN’s non-performance of its statutory obligations, which has led to the dollarization of the country’s economy.
In his lawsuit, Falana questions whether the exchange rate of the naira, as dictated by Section 16 of the Central Bank Act, should be determined by a mechanism established by the Bank. He argues that the failure to fulfill these obligations has resulted in the dollarization of the economy, adversely impacting Nigeria’s economic stability, in contradiction to the objectives outlined in Section 2 of the CBN Act.
The lawsuit also highlights instances of landlords and institutions collecting rents and fees in dollars, contrary to the naira being recognized as the legal tender. Falana asserts that this failure to enforce the use of naira has contributed to the depreciation of the currency, citing examples of the naira’s decline against the dollar from 2015 to 2022.
Falana’s written address, presented by Mrs. Funmi Falana, argues that the CBN has failed in its duty to ensure the exclusive recognition of the naira as legal tender by permitting the widespread use of the dollar. This, he claims, undermines the fundamental responsibilities of the CBN to uphold monetary stability and promote a sound financial system in Nigeria.
The lawsuit seeks several declarations, including that the naira and kobo remain the legal tender in Nigeria, that currency notes issued by the CBN are the legal tender, and that the exchange rate of the naira should be determined by a suitable mechanism established by the CBN. Falana also demands that the CBN be prohibited from allowing multiple exchange rates for the naira against foreign currencies and that the CBN is legally obligated to prosecute those who refuse to accept the naira as a means of payment.
As the legal battle unfolds, the case could have significant implications for Nigeria’s monetary policy and economic landscape. The court’s decision will likely shape the future approach of the CBN to exchange rate policies and its role in maintaining the stability of the country’s currency.
