FALANA: CBN Wrong To Allow Market Forces Determine Exchange Rate

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Femi Falana (SAN), the popular Nigerian human rights lawyer, has slammed the Central Bank of Nigeria (CBN).

He maintained his position that it is wrong of the federal government through the CBN to allow the international market determine the country’s exchange rate.

Experts have criticised President Bola Tinubu’s decision to float the naira, which forced it to plummet from 462 to a dollar to 920, as Nigeria’s economy remains a non-production-oriented one.

Falana said exposing the currency to market forces and the prescriptions of the International Monetary Fund (IMF) and the World Bank as well as the removal of fuel subsidy has contributed greatly to the harsh economic situation facing Nigerians.

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Speaking at the opening of plenary at the 2023 Annual General Conference of the Nigerian Bar Association (NBA), on Monday in Abuja, Falana, told the gathering of lawyers that the fixing of the exchange rate is the exclusive of the CBN.

“Section 16 of the CBN Act gives no room for market forces to fix the exchange rate,” he said.

As part of efforts at turning around the harsh economic situation in the country, Falana, also urged the government to begin trading in naira with countries like the People’s Republic of China.

He argued that if the about $22 billion import from China is transacted in naira, the high demand for dollar which put pressure on Nigeria’s economy would drop, if not stop.

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Falana had sent an FOI request to the CBN to disclose the details of the currency swap agreement.

In a response to Falana’s request, the apex bank said the swap deal, which commenced in July 2018, is renewable every three years, adding that the agreement was renewed after it expired in April 2021.

The CBN disclosed that the sum of 15 billion Chinese yuan renminbi (CNY) was the “amount usable within the year”.

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