Naira Depreciation: CBN Asks Court To Dismiss Falana’s Suit

The Central Bank of Nigeria (CBN) has urged a Federal High Court in Lagos to dismiss a suit filed by human rights lawyer, Femi Falana, seeking to compel the apex bank to stop the alarming depreciation of the Naira.

CBN, in its preliminary objection to the suit, is contending that Falana does not have legal standing to file the suit and that the court lacks the jurisdiction to entertain it.

The senior lawyer had filed the suit to challenge the falling rate of the Naira and dollarisation of the economy.

In the suit marked FHC/L/CS/470/23, Falana is seeking the order of the court to stop the CBN from allowing market forces to fix and determine the exchange rate of the Naira vis a vis other currencies in line with Section 16 of the Central Bank Act.

He is also asking the court to compel the CBN to stop the dollarisation of the economy since Section 20(1) of the Act stipulates that the Naira is the only legal tender in Nigeria.

The plaintiff has prayed the court for a declaration that by Section 16 of the Central Bank Act, the legal tender acceptable in Nigeria is Naira and kobo and that by the combined effect of Sections 15 and 20 (1) of the Central Bank Act, the currency notes issued by the Defendant shall be legal tender in Nigeria.

Falana is also urging the court for a declaration that by Section 16 of the Central Bank Act, the exchange rate of the Naira shall be determined, from time to time, by a suitable mechanism devised by the Defendant for that purpose, as well as declaring that the Defendant is not competent to allow multiple exchange rates of the Naira vis a vis the Dollars and other foreign currencies.

Plaintiff is further seeking a declaration that by Section 20(5) of the Central Bank Act, Defendant is legally obliged to prosecute any person who refuses to accept the Naira as a means of payment in Nigeria.

He, therefore, wants the Court to hold that in line with the CBN Act, the exchange rate of the Naira shall be determined, from time to time, by a suitable mechanism devised by the Bank for that purpose.

However, in the preliminary objections filed on behalf of the bank by Adeleke Agboola (SAN), the CBN contended that Falana has not in any way shown that he stands to suffer more than other citizens of Nigeria concerning the exchange rate policy of the CBN, adding that Falana has no locus standi to institute the case and that he has not reported those who are trading in dollars in Nigeria.

Other objections include that Falana has not shown that the CBN acted in bad faith and that the plaintiff has not disclosed a reasonable cause of action against the CBN.

The Bank is therefore urging the honourable court to dismiss the suit or, in the alternative, strike out the c on because of the jurisdiction to entertain it.

The Bank argued that the Honourable Court lacks the requisite jurisdiction to entertain the suit and that Plaintiff has not disclosed a reasonable cause of action against the CBN.

The Bank further submits that the action is statute-barred and that the step is not competent and maintainable against the Defendant.

In addition, it submitted that the substantive reliefs sought by Plaintiff had been overtaken by events following the Central Bank announcement of the unification of all segments of the foreign exchange market in its Circular of 14 June 2023.