Business
CBN faces legal dilemma over new naira notes
Adebayo Obajemu
Last week, the Central Bank of Nigeria, CBN, under Dr. Yemi Cardoso, may have violated the decisions of the Supreme Court on the deadline for the validity of the old Naira notes. It was learnt at the week that the bank is engaged in a fire fighting measures to get a soft landing by vacating the order of court.
Recall that on March 3, 2023 the Supreme Court extended the validity of the N1000, N500, and N200 notes till 31 December, 2023.
A seven-member panel of the court led by Justice John Okoro unanimously directed that the CBN must continue to receive the old notes from Nigerians till the new deadline.
The court stated that the directive of President Muhammadu Buhari for the redesign of the new notes and withdrawal of the old notes without due consultation was invalid.
Emmanuel Agim, a member of the panel, who read the lead judgement, also condemned the President’s disobedience of the court’s 8 February order that the old N200, N500, and N1,000 notes should continue to circulate alongside the new ones.
He said the president’s broadcast of 16 February, 2023; that only N200 notes should remain legal tender was a mockery of democracy, making it looked like a caricature, while in reality it had been replaced with autocracy.
“It is not in doubt that the President refused to comply with the order of the court that the old 200, 500, and 1,000 naira notes should continue to be legal tender,” the court said.
“Interestingly, there is even nothing to show that the president’s directive for the release of N200 notes was implemented.
“I agree that the first defendant ought not to be heard when the president has refused to obey the authority of this court.
“Disobedience of order of court shows the country’s democracy a mere pretension and now replaced by autocracy. This suit is meritorious.”
But again in what many lawyers interpreted as political trample down on judiciary, the Central Bank of Nigeria (CBN) Tuesday last week said the old N200, N500, and N1,000 notes are to remain legal tender indefinitely.
In widely circulated statement, the apex bank extended “the legal tender status deadline of the old design of N200, N500 and N1,000 denominations, ad infinitum”.
According to the statement, the move is in line with international best practices and “to forestall a repeat of earlier experiences.
“Thus, all banknotes issued by the Central Bank of Nigeria (CBN), in accordance with Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline. The Central Bank of Nigeria is working with the relevant authorities to vacate the subsisting court ruling on the same subject.”
The apex bank’s Director of Corporate Communications, Isa AbdulMumin, stated that CBN will continue to issue and accept all denominations of the bank notes, old and redesigned, to and from deposit money banks (DMBs).
“The general public is enjoined to continue to accept all Naira banknotes (old or redesigned) for day-to-day transactions and handle these banknotes with utmost care, to safeguard and protect the lifecycle of the banknotes,” it added.
Lawyers have reacted to the CBN’s directive. Barrister Leke Ojo , Senior Partner in Leke, Anjorin & Associates, told Business Hallmark that “We understand the context and the political atmosphere as well as the political correctness of the CBN move given that they don’t want to put Nigerians in another round of suffering and crisis, but what they ought to have done was to vacate the Supreme Court’s ruling of March this year. As far as the law is concerned what the bank has just done is an illegality.”
Anthony Ediri, SAN, agreed with Ojo’s submission. According to him, “What we have just witnessed on the part of the apex bank is sheer laziness. They ought to have approached the Supreme Court for the vacation of the apex bank’s earlier pronouncement extending the deadline to December 31st before going public with their pronouncement.”
Ediri queried why the bank was in hurry when it had not vacated the earlier pronouncement by the apex court. “Now the bank is saying it’s working with relevant agencies to vacate the ruling of the Supreme Court. In the eye of the law it’s nullity. It’s like putting the cart before the horse”, he said.
Another lawyer , Grace Essien, told Business Hallmark that “The trouble with public officers in Nigeria is that they lack tact and often don’t follow due process. CBN should have vacated the ruling of the Supreme Court first, then it can now come up with its new position on the naira redesign. No one is saying it’s bad. At least it’s good for the country and Nigerian people.
This is not the first time the CBN will flout the ruling of the Supreme Court.
Recall that a 31January, 2023 deadline initially set for ending the legal tender status of the old Naira notes was extended to 10 February by the Buhari administration as the supply of the new notes fell far short of the volume needed by citizens to meet their most basic needs across the country.
Then on 3 February, three state governments – Kaduna, Kogi, and Zamfara – citing the hardships the continued scarcity of naira notes brought to their people – sued the federal government at the Supreme Court for a reversal of the policy.
Five days later, the Supreme Court issued an interim order suspending the implementation of the deadline set by the federal government, and directed that the old and new Naira notes should continue to circulate pending the resolution of the case.
Unmoved by the court’s order, the CBN insisted that the old notes had stopped being legal tender after the 8 February deadline while the scarcity of the new notes persisted.
In defiance of the Supreme Court’s order, President Buhari, on 16 February, 2023 restored the validity of the old N200 notes, insisting that the N500 and N1000 notes had ceased to be legal tender.
At the resumed hearing of the suit on 22 February, the number of plaintiffs rose to nine after six new states joined the three initial plaintiffs.
The number later rose to 16 states that became plaintiffs in the Naira redesign suit to include: the original plaintiffs – Kaduna, Kogi, Zamfara – and the seven that were joined on 15 February – Cross River, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states.
The rest are the six others that were joined on Wednesday – Nasarawa, Niger, Kano, Jigawa, Rivers and Abia states.
Rivers and Abia states had filed separate suits that were consolidated with the main one. Before then, two states – Edo and Bayelsa – joined the side of the federal government to oppose the suit.
Citing Section 23(2)1 of the constitution, the court held that the dispute between the Federal Government and states must involve law or facts.
The apex court further held that President Muhammadu Buhari in his broadcast admitted that the policy was flawed with a lot of challenges.
The court said the policy had led to some people engaging in trade by barter in this modern age in a bid to survive. The court added that the President’s disobedience of the February 8 order, was a sign of dictatorship.
The apex court held that President Buhari breached the Constitution of the Federation in the ways he issued directives for the re-designing of the Naira by the CBN.
Justice Agim further held that the President failed to consult the National Council of States, Federal Executive Council (FEC) and the National Economic Council (NEC) before directing the CBN to unlawfully introduce new Naira notes.
He held that the unconstitutional use of powers by President Buhari on Naira Re-designing breached the fundamental rights of the Nigerian citizens in various ways.
The apex court said such use of powers by Buhari was not permitted under democracy and in a society like the Nigeria.
In the unanimous judgement, the court held that the unlawful use of executive powers by the President, inflicted unprecedented economic hardship on the citizens by denying them ownership of and access to their money.
Then, leading lawyers, Femi Fálànà and Mike Ozekhome had independently condemned the apex bank and the Buhari administration for showing disrespect to the judiciary by not obeying the ruling of the Supreme Court.
