Nigerian human rights activist and lawyer Femi Falana has pointed fingers at the International Monetary Fund (IMF) and the World Bank, accusing them of sabotaging the currency swap agreement between Nigeria and China. He alleges that collusion between the Nigerian central bank and these global financial institutions is responsible for the continued dominance of the US dollar in Nigeria’s economy.
Federal government’s role in dollarizing the economy
Falana, who advocates for Nigeria to join the BRICS bloc of Brazil, Russia, India, China, and South Africa, has accused the Nigerian federal government of encouraging the dollarization of the economy while other countries promote their currencies. This accusation comes after revelations that the currency swap agreement with China has not yielded the expected benefits for Nigeria.
Nigerian economic experts argue that the five-year-old currency swap agreement with China has not alleviated pressure on Nigeria’s local currency, the naira. They attribute this failure to a trade imbalance between the two nations.
Collusion and consequences
In his statement, Falana acknowledges that the currency swap arrangement has not lived up to the expectations of Nigerian officials. However, he insists that the alleged collusion between the IMF, the World Bank, and the Central Bank of Nigeria (CBN) has rendered the currency swap arrangement ineffective. He states:
“The International Monetary Fund and the World Bank, which superintend the Central Bank of Nigeria, have colluded with the Central Bank of Nigeria to frustrate the currency swap. The economic sabotage aims to promote the dominance of the United States Dollar in Nigeria. Even though Nigeria has since become an important source of oil and petroleum for China’s rapidly growing economy, the Federal Government has continued to demand payment in dollars instead of nairas.”
Femi Falana
The Call for Joining BRICS and renewing currency swap arrangements
Falana criticizes the Nigerian government for not following the example of other countries that have expressed their intentions to join the BRICS bloc. Furthermore, he condemns the CBN’s controversial currency redesign policy, which has led to a widespread shortage of naira banknotes in the country.
The activist lawyer argues that the Nigerian government should prioritize renewing the currency swap agreement with China rather than pursuing the problematic naira redesign policy. Additionally, he suggests establishing similar swap agreements with other friendly nations to promote economic growth and diversification.