Two economic consultants and newspaper columnists, Mr. Henry Olujimi Boyo and Adaighofua Ojomaikre have threatened to take legal action against the Central Bank of Nigeria (CBN) before a Federal High Court if it fails to explain within seven days why it is substituting foreign currencies paid into the Federation Account with Naira funds before distributing same to the three tiers of government.
In a letter dated March 5, 2012 and signed by their ’ lawyer, Mr. Femi Falana and made available to
journalists in Abuja , the duo declared that the action of the CBN runs contrary to section 162 of the 1999 constitution as amended.
Falana said that Section 162 mandated CBN to create a federation account into which all revenues collected by the Government of the Federation shall be paid except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.
“It is further stipulated that “any amount standing to credit of the Federation Account shall be distributed among the Federal and State Governments and the Local Government Councils in each State on such terms and in such manner as may be prescribed by the National Assembly.”
Mr. Falana alleged that “contrary to section 162, CBN has been substituting foreign currencies paid into the Federation Account with Naira funds before distributing same to the three tiers of government”
The adverse effects of the said substitution of revenues in foreign currencies with Naira funds on the national economy, Falana noted, included the creation of unemployment with the collateral risk of rising insecurity, weakening the Naira value and instigating high fuel prices.
The human rights lawyer further said that other ripple effects also include instigating national debt accumulations at exceedingly high cost projected at over N500 billion in the 2012 budget and creation of adverse economic ripple that deepens poverty, when dollar revenue increases.
Mr. Falana is also demanding from the CBN information on all dollar revenues, which have been substituted with naira in monthly allocations and the applicable rate for substitution in the past five years.Other requirements from the CBN is the monthly balances in the Excess Crude account, and the details of all withdrawals from the Excess Crude account
Nigeria’s external and domestic debt portfolio as well as the structure and yield on our foreign reserves and their current locations.
They went further to demand for information on total monthly profit made by CBN on all auction sales of dollars, total monthly credit balances in foreign reserves account, total value of fuel subsidies paid monthly for fuel imports and tabulation of annual budget deficits of the nation.