…Says president disobeyed its Feb 8 order
…Comply with ruling, CAMAN boss Uwaleke urges CBN
…Over N1trn lost by businesses – Idakolo
‘…Judgement has eased tension economically’
…Banks should improve their IT infrastructure – Expert
At last, Nigerians heaved a sigh of relief as the Supreme Court on Friday extended the legality of the N200, N500, and N1, 000 Naira notes until December 31, 2023.
A seven-member panel of the court led by John Okoro unanimously directed that the Central Bank of Nigeria (CBN) must continue to receive the old notes from Nigerians.
The court held that the directive of President Muhammadu Buhari for the re-design of the new notes and withdrawal of the old notes without due consultation was invalid.
Blueprint reports that Emmanuel Agim, a member of the panel, who read the lead judgement, also condemned the president’s disobedience of the court’s February 8 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 February 16 that only N200 notes should remain legal tender made “Nigeria’s democracy look like a mere pretension while democracy is 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 held.
It further held that, “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’ democracy is a mere pretension and now replaced by autocracy. This suit is meritorious.”
The recall/controversy
The controversial monetary policy that was challenged at the Supreme Court had last year introduced newly re-designed 200, N500, and N1, 000 notes with tight deadlines to mop up the old notes from circulation.
The policy led to the scarcity of currency notes, bringing untold hardships to millions of citizens in an economy significantly driven by the informal sector with a large proportion of unbanked people.
A January 31 deadline initially set for ending the legal tender status of the old Naira notes was extended to February 10 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.
On February 3, 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.
And five days later, the 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.
However, unmoved by the court order, the CBN insisted that the old notes had stopped being legal tender after the February 8 deadline while the scarcity of the new notes persisted.
In defiance of the apex court’s order, President Buhari, on February 16, restored the validity of the old N200 notes, insisting that the N500 and N1, 000 notes had ceased to be legal tender.
Adjournment
At the resumed hearing of the suit on February 22, the number of plaintiffs rose to 16 after six new states joined the three initial plaintiffs.
The 16 states that became plaintiffs in the suit were the original plaintiffs – Kaduna, Kogi, Zamfara – and the seven that were joined on February 15 – Cross River, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states.
The rest were 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, had joined the side of the federal government to oppose the suit.
Reactions
In his reaction to the Supreme Court judgement, the president of the Capital Market Academics of Nigeria (CAMAN), Prof. Uche Uwaleke, urged the CBN to comply with the ruling.
He made the call while speaking with Blueprint Weekend hours after the judgement.
According to him, obeying the apex court’s ruling will help revive economic activities and reduce the current difficulties being experienced by Nigerians on account of the policy.
“I advise the CBN to comply with the ruling since it has come from the final court in the land.
“Be that as it may, it’s important to recognise that the CBN has recorded some achievements in terms of the objectives it set out to achieve. The reduction in huge cash circulating outside the commercial banks, the surge in electronic transactions, and increase in financial inclusion are part of the achievements recorded thus far.
“The time-frame till December 31, 2023, provides an opportunity for the CBN to re-assess the policy and improve on its implementation without causing distortions to the economy,” he said.
In his reaction, the managing director of SD&D Management Limited, Gabriel Idakolo, told this reporter that Supreme Court judgement “is a victory for the people of Nigeria because the rushed implementation the Naira re-design policy has shrunk the economy by over a trillion Naira in business losses and many SMEs have closed shop due to their direct dealings with cash.”
According to him, the policy increased hardship, but the ruling has come as a huge relief.
He said: “The president should immediately direct the CBN governor to revert to the status quo ante. Nigerians can now resume normal banking and business activities with cash with the expectation that there will be availability of cash in the banks and their ATMs.
“It is expected that by the pronouncement of the Supreme Court, the CBN should direct the banks to accept the old N1, 000 and N500 notes as a legal tender. This will in turn encourage those that have the old notes to lodge them in their banks for normal business transactions.”
On his part, Adefolarin Olamilekan, a political economist, described the ruling as a welcome development for Nigerians, saying the policy was laudable, but its implementation negatively impacted Nigerians.
He told this newspaper that the ruling by the apex bank would “hopefully lead to increase in both the old and new currencies, which is not readily available at the moment.”
“Meanwhile, the new notes are here already which expectedly means a co- existence. Significantly, it will be a relief if both old and new notes are made available even as the CBN claimed it had destroyed the old notes it mopped up.
“However, a lot of Nigerians are still with old notes. This would definitely be a welcome ruling that would endure many to bring it out. More so, old notes were still being used for transactions before this ruling,” he said.
Also, Aliyu Ilias, a financial analyst, noted that the ruling “does not mean the CBN will automatically release the old notes.”
He said, “The only thing is that it will be easier for people that still have the old money to spend it. The fact still remains that the Supreme Court has just eased the situation economically. Hearing it alone is going to ease a lot of tension in the economy.
“And for businesses that have lost a lot, will be gladdened by this ruling. Now that we’ve heard this, I think everything will begin to fall into place. Things will adjust to normal as expected.”
Adefolarin expressed the hope that the federal government would abide by the ruling of the apex court, saying that the banks should use the window provided by the extension to strengthen their telecommunications infrastructure.
“Again, we expect the CBN and banks to strengthen their internet banking structure. This would deepen the smooth operation of the cashless policy and reduce the risk in online banking architecture.
“Furthermore, the government should always find a way to carry Nigerians along no matter the policy as the policy affects the generality of the population. Lastly, businesses in both the informal and formal sectors must embrace and recalibrate their services in full implementation of the cashless policy.”
