S’Court Temporarily Halts Banning of Old Naira Notes from February 10 

Alex Enumah in Abuja

The Supreme Court on Wednesday temporarily halted the move by the federal government to ban the use of the old naira notes from February 10, 2023.

A seven-member panel, led by Justice John Okoro, halted the move of the federal government in a ruling in an exparte application brought by three northern states of Kaduna, Kogi and Zamfara.

The three 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”.

Moving the application, the counsel to the applicants, Mr A. I. Mustapha (SAN), had urged the apex court to grant the application in the interest of justice and the well-being of Nigeria.

He stated that the policy of the government has led to an “excruciating situation that is almost leading to anarchy in the land”.

While he referred to a CBN statistics, which put the number of people who don’t have bank accounts at over 60 per cent, 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 will lead to anarchy because most banks are already closing operations.

Mustapha further argued that the Supreme Court is not only the highest court in the land, but the final court and as such, has the jurisdiction to entertain any issue including that which affects the well-being of Nigerians.

He accordingly urged the court to grant the application and restrain the federal government from ending the use of the old naira notes from February 10, 2023, pending the hearing and determination of the main suit.

Delivering ruling in the motion, Justice Okoro held that after a careful consideration of the motion exparte, the 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”.

He accordingly adjourned to February 15, 2023 for hearing of the main suit.

Although, Mr Mahmood Magaji (SAN) had announced appearance for the Attorney General of the Federation (AGF), who is the sole respondent in the suit, the panel however did not hear him in the exparte application. 

The Attorneys-General and Commissioners for Justice of the three states had dragged the federal government to court challenging the demonetization policy of the federal government, which they claimed, have brought untold hardship on the people of their states. 

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

Besides, the plaintiffs want 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 will render the old bank notes 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, has 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. 

It is the claim of the plaintiffs that since the announcement of the new naira note policy, there has been an acute shortage in the supply of the new naira notes in Kaduna, Kogi and Zamfara States and that citizens who have 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.

The plaintiffs, in addition, cited the inadequacy of the notice coupled with the haphazard manner in which the exercise is being carried out and the attendant hardship same is wreaking 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 is not sufficient to address the challenges bedevilling the policy.

They are therefore seeking 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 require 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 has 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 plaintiffs’ 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 the implementation of the policy, Dikko submitted “that the 10-day extension by the federal government is still insufficient to address the challenges bedevilling the policy”.

She argued that: “Unless this court intervenes, the government and people of Kaduna, Kogi and Zamfara States will continue to go through a lot of hardship and would ultimately suffer great loss as a result of the insufficient and unreasonable time within which the federal government is embarking on the ongoing currency redesign policy.”