Naira redesign controversy: Kudos, knocks as Supreme Court halts policy
The Supreme Court has temporarily halted the move by the federal government to ban the use of the old naira notes with effect from February 10, 2023.
A seven-member panel led by Justice John Okoro, gave the ruling following an exparte application brought by three northern states of Kaduna, Kogi and Zamfara Wednesday.
The CBN had extended the lifespan of the old naira notes from January 31, 2023 following hues and cries from Nigerians from all sections of the country.
It also became a campaign issue between two top presidential contenders in this month’s general elections.
While the All Progressives Congress (APC) flag bearer, Asiwaju Bola Ahmed Tinubu, faulted the deadline and timing of the change in the N200, N500 and N1000 notes redesigned, his Peoples Democratic Party (PDP) counterpart, former Vice President Atiku Abubakar called on the CBN not to extend the deadline.
And as a climax, a Federal Capital Territory (FCT) High Court Abuja ruled that the apex bank should not extend the January 10 deadline, a development the federal government described as ploy to sabotage the Muhammadu Buhari administration.
The ruling of the lower court followed a motion by four opposition political parties who asked that the CBN be allowed to operate independently.
Prayers of the states
The states had specifically applied for an order of Interim Injunction restraining “the federal government through the Central Bank of Nigeria (CBN) or the commercial banks from suspending or determining or ending on February 10, 2023, the time frame with which the now older version of the 200, 500 and 1,000 denomination of the naira may no longer be legal tender pending the hearing and determination of their motion on notice for interlocutory injunction.”
While moving the application, Wednesday, counsel to the applicants, A. I. Mustapha, SAN, urged the apex court to grant the application in the interest of justice and the well-being of Nigerians.
He stated that the policy of the government had led to an “excruciating situation that is almost leading to anarchy in the land.”
While he referred to a Central Bank of Nigeria (CBN) statistics which put the number of people who don’t have bank accounts at over 60 percent, Mustapha lamented that the few Nigerians with bank accounts can’t even access their monies from the bank as a result of the policy.
The senior lawyer further argued that unless the Supreme Court intervenes the situation would lead to anarchy because most banks were already closing operations.
Ruling on the motion, Justice Okoro held that “after a careful consideration of the motion exparte, this application is granted as prayed: “An order of Interim Injunction restraining the federal government through the Central Bank of Nigeria (CBN) or the commercial banks from suspending or determining or ending on February 10, 2023, the time frame with which the now older version of the 200, 500 and 1,000 denomination of the naira may no longer be legal tender pending the hearing and determination of their motion on notice for interlocutory injunction.”
Subsequently, the apex court adjourned hearing of the main suit for February 15, 2023.
Tinubu hails govs
Reacting to the ruling, Asiwaju Tinubu lauded governors of the 36 states for standing on the side of the Nigerian people.
He said, the governors, especially the APC governors who instituted the suit against the CBN and federal government, acted well on behalf of the hapless Nigerians made to bear the brunt of the policy that had been poorly implemented.
In a statement signed by the Director, Media & Publicity APC Presidential Campaign Council, Bayo Onanuga, Tinubu said the Supreme Court’s ruling coincided with the advisory of the International Monetary Fund urging for the extension of the deadline.
He said: “I want to salute the courage of our Governors and most especially the Progressives Governors in APC who acted to save our country from avoidable and dangerous political crises and social unrest which the Central Bank policy on new Naira notes has brought on our country.
“Our country was dangerously careering toward anarchy and political and economic shutdown. But with the Supreme Court interim ruling, our country has been pulled back from the precipice. We thank our Supreme Court Justices for ruling wisely on the side of the people who have been subjected to undue agony and pains since this policy was announced.
“The Federal Government and relevant stakeholders can now sit down and work out better framework on how to proceed with the new policy without causing any social and economic disruption and inconvenience to our people. We have examples of other countries that have successfully and seamlessly changed their currencies to learn from.
“Those countries give a long time, at least 12 months to effect the currency change. They do not engage in CBN-like Fire Brigade approach.
“We have seen how a good policy can be poorly implemented to cause unintended problems for the people who should be the beneficiaries. While lessons have been learnt, we must now move on as a country and people with a Renewed Hope for a better tomorrow.
“The sole aim of my running to be the president of our country is to make life better and more abundant for our people and this is an ideal for which I will remain eternally committed to.”
He called on the CBN to ensure that the “ruling is effectively executed by taking all necessary steps to (i) ensure sufficient availability of Naira notes (whether old or new) and (ii) properly sensitising the public on the ruling and the consequent validity of old Naira.”
el-Rufai lauds apex court
Commending the decision, Kaduna state Governor Nasir el-Rufai, said the ruling would relieve Nigerians’ suffering.
In a statement Wednesday by his Special Adviser on Media and Communication, Muyiwa Adekeye, the governor thanked “the justices for their decision and appeals to the federal authorities to treat the ruling as an opportunity to relieve human suffering.’’
He said: “The governments of Kaduna, Kogi and Zamfara states were compelled to approach the Supreme Court to mitigate the needless stress imposed on ordinary people and their livelihoods by the ill-timed, incompetent planning and execution of an overnight cashless policy. CBN advanced no emergency justification for this callous decision to deny people access to their deposited cash.”
“We have engaged extensively with the Federal Government and the Central Bank of Nigeria. This has included furnishing evidence-based demonstration of the threat to public welfare and economic activities by this myopic policy that would have been condemned as draconian and insensitive were it being pursued by an occupying power.
“It is not to the credit of a sovereign, democratic government that this level of suffering is being callously imposed when there is neither a compelling emergency situation nor clear benefits for citizens and the economy.
“Kaduna state government hopes that a review of the currency swap policy would now be undertaken to fashion out a better implementation programme. The programme should include timeline that provides enough old and new currency notes, for our citizens, prioritises public welfare and restores economic activity.
“Like other elected APC state governments, we have advised that this should be based on a whole of government approach that pulls together all the necessary institutions of the federal and state governments, and recognizes global best practices and reasonable timeline for implementation,’’ Adekeye added.
There are also mixed feelings over the ruling from among Nigerians, with some describing it as developmental and a sigh of relief.
For many, extending the deadline for the policy would not change the situation if there are no new notes.
But for others, the Supreme Court ruling may not necessarily stop the scarcity of the naira. According to them, there is no money in circulation as most of it had been deposited to the bank, saying only the CBN can direct banks to issue the old naira notes.
For Abam Peterson, the only solution is for the CBN to order banks to pay customers with the old note or increase the circulation of the new notes.
To a resident of Jikwoyi, an Abuja suburb, who simply identified himself as Stanley, the apex bank “should rather have insisted that new notes are printed so it can sufficiently get to the masses than saying old notes should co-exist with new notes, what sought of confusion is that?”
In a chat with Blueprint, Nigeria’s first Professor of the Capital Market Uche Uwaleke, urged the CBN to obey the Supreme Court’s directive.
Uwaleke, who is the President of Association of Capital Market Academics of Nigeria (ACMAN), said the time set for continuation of the case is still within the period the CBN set for the return of old notes.
He said: “As a law abiding and responsible Institution, I expect the CBN to temporarily halt the implementation of the February 10, deadline for the old 200, 500 and 1000 Naira notes to cease being a legal tender as directed by the Supreme Court pending the determination of a notice in respect of the issue on February 15.
“This period is still within the 7 days grace period lasting till February 17 which the CBN had earlier announced for the old notes to be returned to the CBN.”
He expressed worry about the likely implication of the ruling on the economy and the independent of the CBN.
He noted that all over the world, especially where Central Banks are independent, the conduct of monetary policy is their exclusive preserve- a responsibility not encumbered by either the Executive arm or the Judiciary.
“It would amount to erosion of the apex Bank’s independence with dire consequences for the economy if the Supreme Court eventually gives a ruling next week that permanently cancels the currency redesign policy.
“Rather than a permanent halt, what is required is for the CBN to join hands with stakeholders to fine-tune it in view of its many laudable objectives else we end up throwing away the baby and the bath water.
“It now behooves the CBN to assemble a good legal team to argue its case on the strength of the CBN Act of 2007,” he said.
Also speaking to Blueprint, a political economist, Adefolarin Olamilekan, said the ruling would ease the tension building up in different parts of the country.
He said the Supreme Court’s directive was timely, especially as the presidential election was less than 17 days.
According to Adefolarin, “ensuring peaceful atmosphere before, doing and after the election is paramount to our national security and wellbeing.
“Again, this coming as means to reduce the tension in the land going by the multiple protest that has greeted the manner commercial banks dispense the new notes.
“Instructively the Supreme Court decision is going to ameliorate some of the economic challenges in the last two weeks if the CBN and the Presidency would obey the law.
“This would go a long way to further revive the current docile economic activities both at the micro and macroeconomics levels that have negatively weakened exchanges and trading of goods and services across all sectors, with household and businesses, small medium and large recording losses while individuals languish in hunger and lack.”
IMF urges restraint
Also lending its voice, the International Monetary Fund (IMF) called on both the federal government and the CBN to extend the cash swap policy deadline beyond February 10.
The international monetary institution which is the first global body to openly call for an extension of the cash swap policy, made the call shortly after the Supreme Court gave a ruling temporarily restraining the FG and the CBN from enforcing the deadline.
In a statement issued Wednesday in Abuja by Laraba Bonet, on behalf of IMF’s Nigerian resident representative, Ari Aisen, the IMF hinged its plea on the hardship Nigerians were going through.
“In light of hardships caused by disruptions to trade and payments due to the shortage of new bank notes available to the public, in spite of measures introduced by the CBN to mitigate the challenges in the banknote swap process, the IMF encourages the CBN to consider extending the deadline should problems persist in the next few days leading up to the February 10, 2023, deadline,” part of the statement said.
Buhari meets Emefiele
Meanwhile, President Muhammadu Buhari has received the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele in Aso Rock, Abuja.
The meeting was held hours after the Supreme Court, Wednesday, ruled to stop the February 10 deadline for the validity of three old naira notes.
The apex court also held that the federal government and the apex bank must not continue with the deadline pending the determination of the hearing on February 15.
The outcome of the meeting is yet to be known but the visit by the apex bank chief is in connection to the ruling of the Supreme Court