For many Nigerians who have been at the receiving end of the naira swap policy which led to scarcity of the local currency heaved a sigh of relief last Friday when the Supreme Court nullified the naira redesign policy of the apex bank insisting that old notes remain legal tender till December 2023. Experts who have been following the trend weighed in on the latest development, reports Ibrahim Apekhade Yusuf
With many bank customers still having a hard time getting old and new naira notes, the lingering cash crunch has taken a turn for the worse.
As Nigerians desperately go in search of naira as scarcity persists, the burgeoning trade in the sale of naira for naira has not abated just as many customers no longer take deposits to the deposit money banks (DMBs).
Speaking with a cross-section of Nigerians, they confirmed to The Nation that receipts of deposits have thinned out as most customers now prefer to sell their naira deposit to people for personal gains.
Checks by The Nation revealed that those particularly profiting from this scarcity are the POS operators, many of whom have been fleecing many hapless Nigerians.
The CBN governor, Godwin Emefiele had suggested that the naira redesign was informed by the need to curb terrorism financing amongst other challenges.
Supreme Court changes the narrative
The Supreme Court on Friday nullified the naira redesign policy of the Central Bank of Nigeria (CBN) which has thrown the nation into economic chaos in the last few weeks.
The apex court stated that the policy was an affront on the 1999 constitution of the country, and thereby ordered that the old N200, N500 and N1000 notes remain in circulation till December 31, 2023.
The ruling therefore restrained President Muhammadu Buhari and the CBN, from a full implementation of the naira redesign policy.
In its ruling on the suit filed by 16 states spearheaded by Governors Nasir El-Rufai of Kaduna State along with his Zamfara and Kogi States counterparts, Bello Matawalle and Yahaya Bello, the court issued a restraining order on Buhari, stopping him from withdrawing the old N200, N500 and N1000 banknotes in circulation.
In the judgement read by Justice Emmanuel Agim, the apex court said the President “did not follow the provisions of the constitution before implementing the policy.”
The court also noted that the President and the CBN failed to consult the National Security Council and National Economic Council before implementing the policy.
The court therefore ruled that the old and the new banknotes should be allowed to be in circulation until December 31, 2023.
The originating suit challenging the policy was instituted against the Federal Government and the CBN by Governors of Kaduna State, Malam Nasir El-Rufai and his Zamfara and Kogi States, Bello Matawalle and Yahaya Bello respectively, demanding the February 10 deadline that was set by the CBN to end the legal tender status of the old notes be extended.
At the first hearing before Justice John Okoro on February 15, states like Lagos, Rivers, Cross River, Ogun, Ekiti, Ondo and Sokoto, joined in as co-plaintiffs while Bayelsa and Edo States were joined as respondents on behalf of the Federal Government.
The number of states which joined as co-plaintiffs gradually rose to sixteen as more states indicated their willingness to be a part of the case.
During the preliminary hearing, the Supreme Court, a panel of seven justices, led by Justice Okoro, adjourned the case to Wednesday February 22, before another adjournment to March 3, where the final ruling was made.
In the heat of the debate, Buhari, in a speech on February 16, gave a directive that the old N200 notes would be reissued to run alongside the newly designed notes, in a bid to douse tension caused by the policy.
It may be recalled that the apex court had on February 15, adjourned the ruling to February 22 in the case originally instituted by Governors Nasir El-Rufai, Bello Matawalle and Yahaya Bello of Kaduna, Zamfara and Kogi States respectively, challenging the Federal Government’s deadline for the implementation of the naira redesign policy of the Central Bank of Nigeria (CBN).
The initial suit was later joined by seven other states asking the apex court to restrain President Muhammadu Buhari’s administration from fully implementing the naira redesign policy.
Shortly before the hearing began, a seven-member panel, led by the president of the court, Justice John Okoro, had joined the attorneys-general of Katsina, Lagos, Ondo, Ogun, Ekiti, Cross River and Sokoto States to those of Kaduna, Zamfara and Kogi States as co-plaintiffs, while the attorneys-general of Edo and Bayelsa States were joined as co-respondents.
What the adjournment means is that the ruling will only be carried out after the presidential and National Assembly elections scheduled for February 25.
Experts’ views on ruling
Expectedly, some economists have urged the Central Bank of Nigeria (CBN) to comply with the Supreme Court’s ruling making the old naira notes to remain as legal tender till December 31.
The experts made the urge in separate interviews on Friday in Lagos, while commending the apex court’s judgement on the old naira notes.
According to them, the timeframe given by the Supreme Court will provide an opportunity for the CBN to re-assess the policy.
They noted that it would also afford the bank to improve on its implementation without causing distortions to the economy.
The Supreme Court also nullified the federal government’s naira redesign policy, declaring it as an affront to the 1999 Constitution.
Justice Emmanuel Agim, who read the lead judgement, held that the preliminary objections by the defendants (the Attorney General of the Federation, Bayelsa and Edo states) are dismissed as the court has the jurisdiction to entertain 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.
Firing the first salvo, Mazi Okechukwu Unegbu, lawyer, arbitrator and stockbroker and Managing Director/Chief Executive, Maxifund Investments and Securities Plc, said the ruling by the apex court was a breather of some sort.
Unegbu, who boasts of over 30 years career in banking and finance, who lamented that nearly all Nigerians were affected by the cash crunch said the judgement was in order to the extent that it offered a lot of relief for the downtrodden masses.
“I can tell you that every Nigerian has been affected by the cash crunch except the political juggernauts. Well, as a lawyer, I can’t go against the Supreme Court ruling. No. The ruling is ok as it has expressly stated that both the old and new notes must remain as legal tender till December.”
The former president/chairman of the Council of the Chartered Institute of Bankers of Nigeria (CIBN) was however quick to add that the Supreme Court ruling should have just stated that the old and new note should continue to circulate without giving a timeline.
“The Supreme Court should have left the nitty-gritty of the technicalities to the Executive. But talking seriously, I think the Supreme Court did not consider the spirit and letters of the law to make the ruling. The SC adopted a populist stand in arriving at the ruling, which was based on human sentiments and feelings. The apex court relied solely on human suffering to determine the ruling.”
On whether the CBN overrule the Supreme Court, Unegbu who had worked in prominent financial institutions including First Bank, defunct African Merchant Bank, Progress Bank (rose to become Chairman/Chief Executive), Broad Bank and Citizens Bank (as Chief Executive in 2005) said the CBN cannot go against the ruling.
Apparently giving an imprimatur of support to the apex court ruling, Unegbu said it behooves on the CBN to begin to recirculate the over N2trillion it has mopped up from the streets so that Nigerians who have been impoverished overtime can get their lives back on an even keel.
“Nigerians have been on the receiving end of the naira swap policy which has caused them a lot of anguish and most unbearable pain. All the CBN has to do now is to reissue the notes to Nigerians to douse the tension that has been mounting these past months.”
In a monitored television magazine programme recently, the duo of Jiti Ogunye and Monday Ubani, both legal practitioners, said the apex court decision is binding on all authorities.
While ventilating their views on the development, they said the court ruling was not just timely but a welcomed intervention at a time the country’s economic activities were suffering a general lull.
Fielding questions from journalists, the human rights lawyers said it was wrong to assume that the Justices of the Supreme Court do not have a grasp of the law.
On the contrary the duo noted that the justices themselves know the point of law and ordinarily would point out the same.
Echoing similar sentiments, Akpan Ekpo, Professor of Economics and Public policy at the University of Uyo, Akwa Ibom, described the judgment as “a correct one.’’
“It is a correct judgment. No country introduces or redesigns a new currency in three months; it is usually for a period of at least 18 months.
“We had argued earlier, even before the Supreme Court judgement, that both currencies should circulate side by side till the old notes are no longer available.
“The untold hardship was unnecessary. I hope the old denominations are still available. The judgement of the apex court must be obeyed,’’ he said.
Prof. Hassan Oaikhenan of the Department of Economics, University of Benin, said that the judgment which was expected, would bring the much needed succour to the citizenry.
“The judgement, in my view, was expected, given the outcome of the Presidential election held last week. The lawyers are, however, the best to dissect the judgment.
“However, a layman will assert that it is further evidence of the political nature of the judgements from the judiciary and more painfully so, the Supreme Court, which has, deliberately or otherwise, knowingly or unknowingly, created very serious credibility crisis and indeed, serious crisis of confidence for itself before the discerning and even the not-so-discerning public.
“By this judgement, the affected currencies, expectedly, will continue to be legal tenders and will thus be used to consummate economic transactions.
“It is expected that the harsh and extremely untold hardship that the citizens have had to contend with since the Naira redesign policy was put in place by the CBN, will be ameliorated with this judgement, thus bringing the much needed succour to the citizenry,’’ he said.
Uchenna Uwaleke, a Professor of Finance and Capital market at Nasarawa State University, Keffi, also urged the CBN to obey the ruling.
“Doing so will help revive economic activities and reduce the current difficulties being experienced by Nigerians on account of the policy,’’ he said.
Nevertheless, he said that the CBN had 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.
However, Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, in his view, said there should be a clear demarcation of powers for the operation of the apex bank.
“My take is that this issue, which is largely economic, has been muddled up with lots of politics and legality.
“The conduct of monetary policy is entirely within the purview of the central bank.
“So, does it mean that, going forward, the Supreme Court has to approve every monetary policy decision taken by the Central Bank?
“There’s need for a clear demarcation of powers for the operation of the apex bank,’’ Nwokoma said.
