Supreme Court suspends CBN’s February 10 deadline on old, new naira notes swap

Supreme Court on Wednesday ordered a suspension of the deadline for the swapping of old to new Naira notes by the Central Bank of Nigeria (CBN).

The Supreme Court issued an interim injunction restraining the Federal Government from suspending the acceptance of the old Naira notes on the Friday February 10, 2023 deadline.

On Monday, Kaduna, Zamfara, and Kogi States instituted a suit against the Federal Government at the Supreme Court over the scarcity of old and new Naira notes due to the CBN naira redesign policy.

The state governments said they are worried about the effects the CBN naira redesign policy is having on the residents of their states.

Consequently, they are seeking a restraining order by the Supreme Court to compel the government and CBN from implementing the policy.

The states filed an ex-parte motion through their lawyer, AbdulHakeem Uthman Mustapha (SAN), and are urging the Supreme Court to grant them an interim injunction stopping the Federal Government either by itself or acting through the CBN, the commercial banks or its agents from carrying out its plan of ending the timeframe within which the now older versions of the 200, 500 and 1000 denominations of the Naira may no longer be legal tender on February 10, 2023.

In the suit marked: SC/CV/162/2023 and filed on February 3, plaintiffs sought a declaration that the demonetisation policy of the federation being currently carried out by the CBN under the directive of the president was not in compliance with the extant provisions of the Constitution and CBN Act, 2007 and actual laws on the subject.

Besides, plaintiffs wanted a declaration that the three-month notice given by the federal government through the CBN under the directive of the president, the expiration of which would render the old banknotes inadmissible as legal tender, is in gross violation of the provisions of Section 20(3) of the CBN Act 2007, which specifies that Reasonable Notice must be given before such a policy.

Similarly, the plaintiffs urged the court to declare that given the express provisions of Section 20(3) of the CBN Act 2007, the federal government through the CBN had no powers to issue a timeline for the acceptance and redeeming of banknotes issued by the bank, except as limited by Section 22(1) of the CBN Act 2007.

The plaintiffs claimed that since the announcement of the policy, there had been an acute shortage in the supply of the new naira notes in Kaduna, Kogi and Zamfara states, adding that citizens who had dutifully deposited their old naira notes have increasingly found it difficult and sometimes next to impossible to access new naira notes to go about their daily activities.

Plaintiffs in addition cited the inadequacy of the notice coupled with the haphazard manner in which the exercise was being carried out and the attendant hardship same was wrecking on Nigerians, which has been well acknowledged even by the government itself.

The plaintiffs further maintained that the 10-day extension by the federal government was not sufficient to address the challenges bedeviling the policy.

They therefore sought an order of court directing the federal government to immediately suspend the policy until it complies with the relevant provisions of the law.

In an affidavit in support of its own originating summons, the Attorney General and Commissioner for Justice, Kaduna State, Aisha Dikko, who observed that the need to encourage cashless policy was behind the introduction of the naira redesign, stated that not all transactions are however convenient through electronic means.

According to her, several transactions still required cash in exchange for goods and services and as such the government have to allow sufficient money in circulation for the smooth running of the economy.

Besides, the deponent claimed that the federal government has embarked on the policy within a narrow and unworkable time frame, adding that this had adversely affected Nigerian citizens within Kaduna, Kogi and Zamfara States as well as their Governments, especially as the newly redesigned naira notes are not available for use by the people as well as the State Governments.

“That the majority of the indigenes of the plaintiffs’ states who reside in the rural areas have been unable to exchange or deposit their old naira notes as there are no banks in the rural areas where the majority of the population of the states reside.

“Most people in rural areas of the Plaintiffs’ states do not have bank accounts and have so far been unable to deposit their life savings which are still in the old naira notes.

“There is restiveness amongst the people in the various states because of the hardship being suffered by the people, and the situation will sooner than later degenerate into the breakdown of law and order.

“The plaintiff State Governments cannot stand by as they are duty-bound to protect citizens in their states and prevent the breakdown of law and order”, she averred.

While stating that all the current hardship and loss being experienced by the Plaintiffs’ state governments as well as people in the various states would have been avoided if there is sufficient time frame for implementation of the policy, Dikko submitted “that the 10-day extension by the federal government is still insufficient to address the challenges bedeviling the policy.”

NewsWireNGR recalls the Federal Capital Territory (FCT) High Court at Wuse Zone 2, Abuja, has ordered the Central Bank of Nigeria to ensure the enforcement of its 10 February deadline on the validity of the old naira notes.

The judge, Eleojo Enenche, gave the order on Monday in a ruling on an ex parte application by four opposition political parties.

The four parties – Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM) – in their application alleged that the CBN’s new monetary policy was being sabotaged by Nigerian banks.

They sued President Muhammadu Buhari, the CBN and the CBN governor, Godwin Emefiele, along with 25 Nigerian banks as defendants.

In a public announcement last week, the CBN governor, Mr Emefiele, extended the deadline for legal tender status of the old N200, N500 and N1000 notes from 31 January to 10 February.

The extension followed a public outcry that greeted the scarcity of the new naira banknotes. The CBN governor announced the extension after meeting with President Buhari, and directed banks to receive the old bank notes even after the deadline.