CBN Sued for Dollarizing Economy, According to Report

By: Henry Felix

CBN Sued for Dollarizing Economy, According to Report

August 30, 2023 8:14 AM

The Nigerian central bank is being sued by a human rights activist who claims it has done nothing to prevent the dollarization of the economy. The activist claims that the "constant devaluation, depreciation, and unending plunge of the naira" is due to the central bank's failure to prevent economic agents from seeking U.S. dollars for domestic business transactions.

Femi Falana, a lawyer and human rights activist in Nigeria, is filing a lawsuit against the CBN for "dollarizing" the country's economy. Moreover, Falana said in his lawsuit filed in a Lagos High Court that the CBN's failure to carry out its statutory tasks had "resulted in the constant devaluation, depreciation, and unending plunge of the naira."

The Nigerian naira has been steadily losing value against major currencies, as documented by News during the previous few months. Many Nigerian economic analysts blame the persistent lack of U.S. dollars for the steady decline of the naira.

The Nigerian human rights activist, according to a report→ on Arise TV, thinks the High Court has the power to require the CBN to enforce the relevant portions of the law.

In light of this, Falana urged the judge to order the defendant to stop using the dollar as legal cash by implementing regulations and penalties that would prevent this from happening in Nigeria.

A senior attorney of Nigeria (SAN), Falana argued that the country's central bank should be mandated to recognize only the naira and the kobo as legal tender in the West African nation. The attorney further argued that the court should order the CBN to prosecute anyone who refuses to accept the naira as payment.

While this was going on, Falana said in an affidavit presented in support of his complaint against the central bank that the apex bank did nothing to prevent universities and landlords from collecting U.S. money. The attorney further claimed that the CBN had broken its pledge to replace the multiple exchange rate regime with a sustainably regulated rate within 12 months.