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Expert seeks legal action against CBN for currency devaluation

By Michael Eboh

Following the persistent decline of the value of the naira against major international currencies, an expert in economic matters, Dr. Mashhud Fashola has called on Nigerians to institute legal actions against the Central Bank of Nigeria (CBN) for failing in its duty to ensure stability of the country’s currency and also for its failure to adequately manage inflation.

Speaking in an interview with Vanguard, Fashola, who is a Senior Lecturer in the Department of Economics in the University of Lagos and Head, Ahmadiyya Muslim Community in Nigeria, disclosed that the roles of the CBN include supervising banking operations, guaranteeing the value of the country’s currency over time and ensuring price stability. He noted that if the CBN has failed in the discharge of any of its roles, the Governor of the apex bank and other officials should be made to resign or dragged before the courts for acts of irresponsibility.

Sanusi, CBN Governor
Sanusi, CBN Governor

He said, “CBN is the monetary authority that checks price stability, control of money supply among others. It is also the role of the CBN to supervise banking operations, for when the banks violate the rules and there is no one to call them to order, they will end up destroying the economy, causing the whole Nigerians to pay for it. It is important to note that if the CBN is not doing well, it can be challenged in the law court.

“The CBN is saddled with the responsibility of guaranteeing the value of our money. That is, the N100 is a promise that the value of the N100 will be given to one. If after one year, the value of N100 reduces to N70, the CBN would be seen to have failed in guaranteeing its promise. It is a promise that should be valid for many years.

“If one has N100 and it is worth 100 kilograms of a particular food stuff, then I should be able to get that same quantity of food stuff 10 to 20 years after, that is what is meant by guaranteeing the value of money. If my N100 is worth two ounces of gold, I should be able to get it any time I come to the CBN. It is a pity that we can’t take them to court. If my money becomes worthless,  I should be able to take them to court.

“Because Nigerians have folded their hands, taking things for granted, CBN has been failing in his duty to protect the value of the domestic currency and ensure price stability. Inflation has been growing rapidly for decades, the CBN said it is there, it cannot maintain price stability. What I am saying is that, you are a Governor of CBN or one of the Directors, and you are supposed to maintain price stability, and inflation is very rapid, then you have achieved nothing, you have failed in your duty, your monetary policy duty of promoting price stability.”

Fashola called on the regulatory authorities in the Nigerian capital market to take drastic actions to ensure sanity in the market, especially in this period of tough economic conditions.
He noted that there are lots of infractions going on in the capital market, needing the attention of the regulatory authorities so as to forestall a loss of confidence and erosion of investors’ funds in the market.

“CBN is doing its work, but there are other sectors of the economy that will help promote sound economic development, such as the capital market. There are a lot of corrupt practices going on in the stock exchange and those who are the authorities of the stock exchange need also to come and do something to sanitise the system, so that the public is not cheated out.

“As it is presently, the public is being cheated by make-believe value of stocks – stocks that have no value. People manipulate and present them as valuable stocks, businesses that have not been performing anything, producing nothing, not contributing to development and their shares are highly priced, only for it to crash and those who put their money there be made to suffer.
The managers of Nigerian Stock Exchange should not allow that type of speculation and manipulation in the stock market, and that will make it impossible for the innocent, for the lay men and women to be exploited,” he noted.


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