Naira Redesign Policy: The Supreme Court Confirms the President Acted Ultra Vires 

Introduction 

Political control by the people, can only be exercised by them at election time. It is the Courts alone, who at all times, have the power and responsibility of standing between the government and the governed. The fundamental importance of the independence of the Judiciary from the legislature and executive is therefore, absolutely vital. It is charged with the responsibility of ensuring that government policies and actions are not contrary to law, and of ensuring that citizens legal rights and responsibilities are vindicated or enforced. It is up to the Courts to protect the citizens, against arbitrary and unlawful acts of the other arms of government. Actions for a judicial review in Nigeria, can be based on either the common law doctrine of ultra vires or the Constitution. In the case of the former, the action may be bought (i) under the action for judicial review procedure under the various High Court Civil Procedure Rules or (ii) for a declaration and injunction under the common law. In the case of the latter where the judicial review action is founded on the Constitution, it normally will be (i) to protect or enforce a fundamental right guaranteed under Chapter IV of the Constitution or (ii) to prevent an infraction of the Constitution, or to pronounce as unconstitutional, an infraction of the Constitution or to invalidate a law on the ground that it is constitutionally invalid. In the case of (i) the avenue for the enforcement of fundamental rights is provided for under Section 46 of the Constitution. In the case of (ii) no special procedure is required, such actions are usually  for declarations and injunctions. 

Facts 

It was on the basis of many of the grounds highlighted above that the Supreme Court was called upon to adjudicate in AG Kaduna, Kogi & Zamfara State & Ors v AG Federation & Ors  SC/CN/162/ 2023 on the constitutionality or otherwise of the Federal Government’s Naira redesign policy. Since the suit was filed at first instance at the Supreme Court, its original jurisdiction to hear the suit was called into question. The suit as filed was couched as both an infringement of the fundamental rights of the citizens of the Plaintiff States, and an infraction of the Constitution. The Defendants, on the other hand, filed a Preliminary Objection arguing that  the Supreme Court had no original jurisdiction to hear the suit as filed.  

It will be recalled that before the States filed the above suit, the Central Bank of Nigeria (CBN) had earlier extended the deadline for the swap of old N200, N500, and N1,000 currency notes from 31st January, 2023 to 10th February, 2023, following complaints by many Nigerians; but, subsequently, the Supreme Court, by an interim order directed the Federal Government, the CBN, and all the commercial banks to abort the 10th of February deadline, pending the determination of a Motion on Notice filed by the Plaintiffs in respect of all the issues at hand. 

In what was yet another turn around, the President by a national broadcast, varied the Supreme Court’s order, and directed the CBN to release the old N200 notes back into circulation to co-exist with new N200, N500 and N1,000 banknotes for 60 days till 10th April, 2023. The President also directed that the old N500 and N1,000 bank notes would cease to be legal tender in Nigeria. 

At the resumed hearing of the Supreme Court on 22nd February, 2023, Justice John Inyang Okoro JSC leading a seven-man panel of Justices of the Supreme Court joined 13 other States as Plaintiffs to the action while Edo and Bayelsa States were joined as Defendants. All other claims and suits were consolidated and after adoption of all written addresses and oral arguments the Supreme Court fixed Friday 3rd March, 2023, for the Court to make its final decision

The Issue of Jurisdiction and the Various Preliminary Objections 

The Presiding Judge on the date reserved for judgement, was Emmanuel Agim JSC. He held that the issue of contempt as raised by some of the Plaintiffs touched on the merits of the case, and as such, he considered it prudent to first  determine the issue of jurisdiction. 

The AGF had argued in his papers as filed before the Court, that there was a distinction between the Federal Government of Nigeria and the Federation In resolving this issue, the Supreme Court held that the Federal Government is an agent of the Federation, and that the acts of the Federal Government are the acts of the Federation, and as such, the suit as filed was purely a dispute between the Federating units and the Federation. Accordingly the Supreme Court held that It  was indeed, a dispute within its original jurisdiction. 

The argument of Musa Sanusi, SAN representing Kano State, who joined the suit at the last hearing before judgement on the 22nd of February, 2023, also appeared to have been adopted by the Court. The Learned Silk had argued that the President did not consult the National Council of States and the National Economic Council, before implementing the Naira redesign policy. He had argued further that, since they are constituents of the Nigerian State, they ought to have been consulted. The Supreme Court agreed with these arguments, and added that this was implicit in the Constitution. 

The Supreme Court also noted that there was also nothing to show by any public notice, that the currency was going to be redesigned. The public only became aware of this, through press remarks. This, according to the Supreme Court, cannot qualify as adequate notice, and as such, any such notice was invalid. The Supreme Court was also of the view that the decision to change a Country’s currency, cannot be implemented after a mere  personal consultation with the CBN Governor. The Presiding Justice, Emmanuel Agim JSC, then made reference to the experience of India and the difficulties they encountered when attempting to change its currency, and that this was further proof that changing a Country’s currency must involve several consultations. The Supreme Court concluded that, this was never done in the case under review. 

According to Hon. Justice Emmanuel Agim JSC 

“…..no reasonable notice was given as required by Section 20(3) of the CBN Act. The directive and implementation of the policy, is therefore invalid”.

The Supreme Court also found that the Suit as instituted, could effectively be determined without joining the CBN. The CBN need not be joined, since it was an agent of a disclosed principal who had already been sued. The Supreme Court pointed out that this issue had already been established in many cases, that an agent of a disclosed principal is not a necessary party. 

The Supreme Court therefore, found that the argument of the Defendants relating to the fact that CBN ought to have been joined is without any merit. It further noted that the suit as filed was not between banks, and as such, it was not within the exclusive jurisdiction of the Federal High Court. It is a dispute between some States and the Federation, over the way and manner the Federal Government introduced an economic policy without the involvement of the National Council of States. The Supreme Court further pointed out that the scope of its original jurisdiction covers any dispute, and as such, it is vested with unlimited jurisdiction over disputes between States and the Federation. It was on this basis, that all the Preliminary Objections were held to have failed and were accordingly dismissed. 

Finally, the Supreme Court went on to state that the Defendants ought not to be heard, since they had refused to obey the interim order it had earlier granted. The Court stated that the disobedience of the orders it granted, is a sign of the failure of the rule of law. This suit it claimed, has merits.  

Judgement on Main Issues 

In a unanimous consolidated judgement on all issues, the 7-man Panel of the Supreme Court with Emmanuel Agim JSC delivering the decision, nullified the Federal Government’s Naira redesign policy, and declared that it was an affront to the 1999 Constitution. It also ordered that old N200, N500, and N1,000 notes should remain in circulation until the 23rd of December, 2023. The Court further stated that the unconstitutional use of executive powers by President Buhari on the Naira redesign policy had not only breached the fundamental rights of the Nigerian citizen in various ways, but that also, the use of such powers by the President is neither permitted in our democracy, nor in a society such as ours.

A brief summary of the reliefs granted by the Supreme Court are as follows:

1. A declaration that the demonetisation policy of the Federal Government is inconsistent with the CBN Act. 

2.  A declaration that the President cannot make a unilateral policy without carrying the Plaintiffs along. 

3. In issuing the policy, the President was under an obligation to carry the National Council of States along. 

4. The policy has impeded the functions of State governments. 

5. The directive of the President is illegal.

6. Old versions of Naira notes shall continue to be legal tender with the new Naira  notes, until 23rd December, 2023. 

Conclusion 

Although the Supreme Court’s judgement on the Federal Government’s Naira redesign policy has brought much needed relief to Nigerians, I don’t think, at least, strictly from a legal perspective, that the Supreme Court should have got directly involved in imposing a new deadline. This is not the role of the Courts. They should have stated in general terms their concern about the timelines the CBN and President had set, as well as worries about sufficient Notice, and ask that the CBN  revisit it. This is how the Courts review legislative, executive or administrative actions They could unwittingly set a dangerous precedent of not only encroaching into executive, legislative and administrative spheres of influence, but also be accused of encroaching upon and making Monetary Policy (I acknowledge that there may indeed, be a counter-argument to this), but the dangers are nevertheless, there.

Secondly, there has been, and there will continue to be, several breaches and infractions of the Constitution, particularly with regard to the constitutional role and functions of the various executive bodies established under Section 153 of the 1999 Constitution as contained in Part I of the Third Schedule of the Constitution, such as the Council of States and the National Executive Council, to mention a few. How can we appropriately enforce these significant aspects of the Constitution? It’s not in all instances, that one can have access to the original jurisdiction of the Supreme Court. It’s high time we begin the debate, about having a Constitutional Court. A constitutional court is a high court, that deals primarily with constitutional law. Its main authority is to rule on whether laws that are challenged are in fact unconstitutional, that is, whether they conflict with constitutionally established rules, rights, and freedoms, among other things. If we do eventually establish a constitutional court, it will deal primarily with constitutional matters. Ideally, appeals from the constitutional court may have to go directly to a newly established constitutional arm of the Supreme Court (depending on the model we want). This will of course, require a constitutional amendment, but it will bring much needy certainty to the law and enforcement of constitutional matters. Both Lawyers and Judges will become better acquainted, with constitutional aspects of our laws. 

A constitutional court’s jurisdiction, would typically include judicial review of legislation and adjudication of constitutional disputes. Individuals may have access, in human rights cases. States that have created constitutional courts, have done so largely because they see the court as a necessary guardian of democratic institutions, constitutionalism and fundamental rights; and the Naira redesign case, has certainly emphasised our need for such a Court.