THE LEGAL STATUS OF 200 NAIRA NOTES

The central bank acted within its limits, argues BONIFAE CHIZEA

President Muhammadu Buhari on February 16, 2023 approved the extension of legal tender status of only 200 Naira notes by 60 days up to April 10, 2023. The immediate take away from this broadcast is that actually the legal tender status of the currency denominations – 200, 500, 1,000 notes under change expired as announced by the Central Bank on February 10, 2023. Therefore those who have piled up humongous amounts of money outside the banking system for unauthorized nefarious activities now have their fingers burnt and must be licking their wounds by now and since this consideration is the crux of the rabid agitations, we might not have heard the last in this connection.

One of the things we must aim to achieve in the unfolding dispensation is to intentionally target the building of strong institutions. In such environment, institutions will only be guided by the content of their extant Act. The Central Bank enjoys instrument autonomy; which means that in the pursuit of its overall mandate of the maintenance of price stability that it should be unfettered as it decides how it wants to go about doing so. The Central Bank by deciding to change the Naira notes is acting clearly within the boundary of its Act and most certainly we have not heard expressed sentiments to the contrary. And if any approval was required, it is only that of the President who the Governor reports to and not anyone else including the Minister of Finance because there is no reporting relationship. It is of course good practice if proximate stakeholders are carried along. But we must also be open to the fact that for certain issues there might be the need for an element of surprise to underwrite successful implementation.

But at some point in time there were too many unauthorized power brokers on this matter. Some grossly implicated State Governor became champions who dictated which currency is a legal tender currency in the country. In a particular State who’s governor has a reputation that stinks with regard to receiving bribe payments went ahead to shut down supermarkets that will not accept currency notes that the issuing authority has pronounced as expired it was alleged. A particular vociferous governor was caught on camera advising his constituents that an injunction has been obtained from the Supreme Court that the old notes remain legal tender. They should go ahead feeling free to use the notes which the relevant and pertinent authority had pronounced expired. Where else does one encounter such confusion but in Nigeria? But now such overzealous governors have egg on their face and one is wondering where all this development will leave those who believed them and followed their wrongheaded and misguided directive! One’s heart cannot but go out at this moment to those at the receiving end now holding the wrong end of the stick.

Now a critical question is where does all this leave the Supreme Court now with its reputation all but shattered and up in smoke! As the Court of last Resort the Supreme Court should have endeavoured to protect its reputation jealously. But rather following its involvements and pronouncements particularly lately that do not resonate with what everyone can see, the Supreme Court has become the butt of all manner of seedy jokes. As the Court dabbled into strange territory as in this respect, it risks losing the reverence and respect it should ordinarily command. I had the privilege to listen to a post which has gone viral whereby on the Supreme Court latest directive on legal status it was conjectured that such can only be possible either out of ignorance or because it has allowed itself to be influenced to give that judgement since the Central Bank that has direct responsibility was not party to the suit. It will be most interesting to see what will happen on the next adjourned date on February 22, 2023 following this development. It will now seem to me to have been overtaken by recent developments.

As has been made clear, a major reason behind the currency change is to impact vote buying by disarming those who have piled Naira waiting to buy votes outside the banking system. And this realization explains the ferocity of the opposition to this exercise. There will be of course no prize for guessing that such illegally stocked monies will most certainly be in the 1,000 currency notes denomination. Therefore all that money is now worse than toilet papers. Obviously a new Nigeria is possible. And as the President repeated as part of his broadcast Nigerians must be free to vote for whomsoever they want with the assurance that their votes will count. Mr. President, history will remember you kindly for such a praise worthy posture which prioritizes the future of our potentially great country; Nigeria. A new Nigeria is really possible and it is just round the corner by His grace as all the indicators would seem to confirm.

There is State Governor that is on record to have fingered a particularly notorious political party chieftain as the mastermind of the mayhem in his State where massive destructions have been experienced and even life lost. One should have expected that such an individual by now must have been pulled in for interrogation. And if found culpable should be made to face the full weight of the law. There must be fellow travelers in the perpetration of this dastardly act of masterminding insurrection and wanton destruction to life and property in many other states in the Federation. All such culprits must be fished out to face the full force of the law.

But the Central Bank does not need anyone to remind it that it’s in charge of this game and the buck stops at the table of the Governor. Therefore the responsibility for the success or failure of the currency change exercise stops at the table of the Governor. Yes, we all support the cashless policy, but not at the expense of ordinary bank customers not having access to their deposits. Whatever is the cause of the problem, the CBN must rise to the challenge to uproot and address such problems. What is happening now with respect to rioting and vandalism of particularly bank property must be isolated and stopped in its track for badly needed peace to return to the polity.

Elections 2023 is just a few days away. All stakeholders must be up and doing by playing their respective part for a peaceful, transparent and free elections in which all votes must count to begin to underwrite the desired robust future for Nigeria. The security agents must be on the guard to nip any attempts to disrupt peace during and after the elections. A new Nigeria is possible and may God’s will be done for Nigeria.

 Dr Chizea writes from Lagos