The Supreme Court of Nigeria on Friday ruled that the country’s old banknotes will remain as legal tender and will be used simultaneously with the new Naira currency.
The court also nullified the implementation of the cashless system as well as Naira re-design policy by the Nigerian government, terming it as a breach of the country's constitution.
Justice Emmanuel Akomaye Agim, who read the court’s lead judgment, stated that President Buhari unlawfully consulted with the Nigeria’s National Council of States (NCS), Federal Executive Council (FEC) and the National Economic Council (NEC) before directing the CBN to illegally introduce the new Naira notes.
Breached fundamental rightsIt said that the unconstitutional use of powers by Buhari on re-designing the Naira breached the fundamental rights of the Nigerian citizens in various ways.
The Nigerian apex court said such use of powers by the president was not permitted under the country's democracy.
In addition, the Nigerian Supreme Court said that the unlawful use of executive powers by the president inflicted unprecedented economic hardship on the citizens by denying them ownership and access to their monies.
But the court said that the old currencies could be legal until the end of December 2023 and not February 10, 2023, as agreed upon by CBN.
Problems of re-design
Governors of the ruling All Progressives Congress (APC) sued the Nigerian government and CBN, asking the supreme court to nullify the implementation system.
Although the court earlier ordered the CBN to suspend the illegality of old Naira notes pending the determination of the substantive suit, the bank refused to abide.
The introduction of the re-designed banknotes in Nigeria has so far caused an economic dip and crippled businesses leading to nationwide protests.
The policy implemented by CBN to promote cashless economy had become painfully stinging to the people as they got nothing in return when they took their old Naira notes to commercial banks.
The Naira swap turned out to be Naira confiscation, as commercial banks had no new notes to give in return while the February 10 deadline for the use of the old notes was fast approaching.
Buhari’s tough stance
Despite the scourge caused, President Muhammadu Buhari said there was no going back or amending the implementation of the policy.
Both the Nigerian government and CBN held their ground saying the phase-out of the old notes was aimed at mopping up more than 2. 3 trillion Naira being held in offshore accounts by corrupt politicians.
The Buhari administration said it was also fighting money laundering, corruption and use of dirty cash to influence the outcome of the recently concluded presidential election.
ATMs in major parts of Nigeria are still shut because they do not have enough banknotes to dispense, leaving customers stranded. The situation is further compounded by the fact that local money markets and traders have started to reject the old notes.
On the instruction by CBN, commercial banks and other financial institutions have started working during the weekends to mop up old notes.
Michael Adejumobi, a software engineer, said the banks were frustrating people by not loading the new notes into ATMs.“The suffering in this country is too much. Why is the CBN phasing out old notes without proper provision for people to have the new ones?” he asked.
“This is very frustrating. I have been running around banks looking for these new notes because traders have also started rejecting the old ones.”Nigerian banks speakThe shortage continues to bite even as the CBN insists the new notes are lying in its vaults awaiting collection by Nigerian commercial banks.
Kofo Salam-Alada, CBN’s legal affairs director, said at a meeting in Lagos that they had been calling on commercial banks to approach its branches across the country to pick the new notes.
He added that the bank had also relaxed some of the conditions for accessing the new currency notes in order to accommodate the lenders.
“The banks were initially being given slots, but now the CBN is bending backward to accommodate their demands so that they can service customers for easy access of the new Naira notes,” he said.
On their part, Nigerian commercial banks complained about delivery logistics of the new notes to their branches. To facilitate the pumping of the new notes into the economy, CBN has now embarked on a cash swap programme across the Nigerian states to serve small-scale traders.
“The traders bring to us their old Naira notes within the range of N10,000 as we give them the new notes,” said Sunny Daibo, a CBN representative.
The official expressed displeasure with the public’s failure to embrace cashless transactions.
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