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Mon, Aug 28, 2023 10:05 PM

Femi Falana Takes on the Federal Government Over Foreign Exchange Rate Policy

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Femi Falana Takes on the Federal Government Over Foreign Exchange Rate Policy
Legal luminary and activist Femi Falana has criticized the Federal Government's reliance on market forces and international financial institutions to determine Nigeria's foreign exchange rate. He emphasized that the Central Bank of Nigeria (CBN) should have the exclusive authority to fix the exchange rate. Falana also called for Nigeria to carry out trade transactions with China in Naira to reduce the demand for the US dollar. Additionally, he urged the Nigerian Bar Association (NBA) to monitor the nation's refineries and advocated for greater transparency in government spending.

Lagos lawyer and renowned human rights activist, Mr Femi Falana (SAN), has taken a strong stance against the Federal Government's approach to determining Nigeria's foreign exchange rate. Falana has criticized the government for allowing market forces, the International Monetary Fund (IMF), and the World Bank to have significant influence over this crucial economic indicator.

In his address at the opening plenary of the 2023 Annual General Conference of the Nigerian Bar Association (NBA) in Abuja, Falana highlighted that Section 16 of the CBN Act explicitly assigns the responsibility of fixing the exchange rate to the Central Bank of Nigeria. He emphasized that it is the CBN's prerogative, not that of market forces or international financial institutions, to determine the exchange rate to protect the nation's economic interests.

Expressing concern over the adverse effects of the current exchange rate policy, Falana suggested a viable solution to alleviate pressure on Nigeria's economy. He called on the government to explore the possibility of conducting trade transactions with China using the Naira instead of the US dollar. Falana argued that if the approximately $22 billion worth of imports from China were transacted in Naira, the demand for dollars would decline, thereby easing the strain on Nigeria's foreign exchange reserves.

Furthermore, Falana urged the Nigerian Bar Association and its member branches located in regions where the country's refineries are situated to actively engage in monitoring the developments within these facilities. Notably, the government has allocated a substantial sum of $1.4 billion to revamp the refineries. By monitoring the progress of these projects, the NBA can contribute to ensuring accountability and successful outcomes.

Addressing the need for transparency in government spending, Falana advocated for the regular publication of detailed information on the allocation and disbursement of funds among the federal, state, and local administrations. He underscored the importance of citizens having access to this information, as it enables them to scrutinize spending decisions and demand accountability from state executives.

The theme of the plenary session at the NBA conference revolved around "Getting the Economy Right: Decoding Nigeria's Strategy for Growth, Diversification, Inclusivity, and Sustainability." The session's speakers acknowledged that Nigeria heavily relies on the oil sector, which accounts for 95% of the country's earnings and 87% of its budgetary revenues. To achieve economic prosperity, they stressed the necessity of diversifying Nigeria's economy by investing in sectors such as agriculture, manufacturing, and tradeable services.

Moreover, the session emphasized the importance of involving professionals, including lawyers, in facilitating the shift from an oil-dependent economy to a more diversified one. They also underlined the significance of attracting investments from Nigerians residing abroad, as it could significantly contribute to the country's economic development.

Femi Falana's critical remarks reinforce the urgent need for the Nigerian government to reconsider its approach to foreign exchange rate policies, prioritize economic diversification, and improve transparency in public spending. By doing so, Nigeria can achieve sustainable economic growth and alleviate the hardships facing its citizens.

Source of content: OOO News 2023-08-28 News

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