- Nation risks return to currency squeeze crisis
- Apex court fixes Nov 30 for hearing
Barely 40 days to the end of the year, the Federal Government has urged the Supreme Court to grant an extension of time for old naira notes to remain in circulation.
The government wants the apex court to lift its March 3 order that old naira notes should remain legal tender along with new notes till December 31.
It added that an extension of time is necessary because, due to the economic crisis, it has not been able to print the volume of new notes that would enable it to phase out old currency before December 31.
The Federal Government further explained that should the Supreme Court decline its request to extend the period of circulation of old notes, the country stands the risk of descending into another national, economic and financial crisis as witnessed in the first quarter of the year when the naira redesign policy was being implemented under former Central Bank of Nigeria (CBN) Governor Godwin Emefiele.
It begged the court to allow the old notes to be in use with the new notes until after its consultation with critical stakeholders and after putting all required structures in place.
It raised the alarm that the economy may be hurt because some Nigerians have started hoarding the old and new Naira notes ahead of the December 31st timeline.
It admitted that it has been engaging the 10 plaintiff states in their capacities as members of the National Council of State and the National Economic Council (NEC).
The 10 aggrieved states are Kaduna, Kogi, Zamfara, Ondo, Ekiti, Katsina, Ogun, Cross River, Lagos and Sokoto.
The respondents in the case are the Attorney-General of the Federation, Edo and Bayelsa states.
Following hardship by Nigerians, the Supreme Court (in SC/CV/162/2023) on March 3, overruled the administration of former President Muhammadu Buhari to the effect that the old N200, N500 and N1,000 notes should be legal tender until December 31.
The Buhari Administration had fixed February 10, 2023, to end the circulation of old Naira notes.
The 10 plaintiffs headed for the Supreme Court in the interest of the public, leading to judgment by the apex court extending the circulation of the old notes till December 31.
Apart from its inability to print new notes, the subsisting order of the Supreme Court was said to be a hindrance to the extension of the use of the old notes of N200, N500 and N1,000.
The government was said to have realised that unless there is a fresh order from the Supreme Court, the old notes can no longer be in circulation after December 31.
In the fresh application by the Attorney-General of the Federation Lateef Fagbemi (SAN), the Federal Government is seeking the following reliefs:
•An order of this Honourable Court reviewing or varying its consequential order contained in the judgment in Suit No. SC/ CV/162/2023 delivered on the 3rd day of March 2023 to the effect that the old 200, 500 and 1,000 naira notes should be legal tender until the 31st of December, 2023.
•An order of this Honourable Court varying its consequential order contained the March 3 judgment to the effect that the old 200, 500 and 1,000 Naira notes should be legal tender until 31st of December, 2023.
•An order of this Honourable Court reviewing and or varying the said consequential order to read thus: ” An order that the old versions of 200, 500, 1,000 notes/ currency shall continue to be legal tenders alongside the new or redesigned versions until the government decides to bring the circulation of the old versions to an end… after its consultation with critical stakeholders and after putting all required structures in place.
•And for such order or further orders as this Honourable Court may deem fit to make in the circumstances.
It was learnt that the Supreme Court has fixed November 30 for a hearing.
The lead counsel for the plaintiffs, Mr. A. U. Mustapha (SAN) confirmed the hearing notice from the court.
Fagbemi explained in detail why the Federal Government opted to approach the Supreme Court.
He said the last Presidential Election had ushered in a new government which was just settling down.
He said: “The ground for making the said consequential order by this Honourable Court was that the new 200, 500 and 1000 Naira notes would have been adequately printed and fully circulated by the 31st of December, 2023 so that the recall of the old 200, 500 and 1000 Naira notes would not lead to national, economic and financial crises witnessed when the Naira redesigned policy firstly came into effect in the first quarter of the year.
“Since the said consequential order was made, the Federal Government, in compliance with this Honourable Court’s order, directed the CBN to engage and has been engaging the respondents in their individual capacities and in their capacities as members of the National Council of State and National Economic Council with respect to the Naira redesign policy.
“In between the time the order was made and now, there was a presidential election in the country which has led to a transition from the immediate-past government and the incumbent government which is just settling down.
“The incumbent government has, however, directed the Central Bank to come up, by a way of policy direction, with how the Naira redesign policy will be addressed in full compliance with the order of this Honourable Court.
“Whilst working on the policy direction and due to the economic crisis being witnessed by the government of the Federation and other factors beyond its control, the government of the federation to date has not been able to print the new 200, 500 and 1000 Naira notes in the equal proportion of the old 200, 500 and 1000 Naira notes sought to be recalled as consultation with critical stakeholders is still on-going on how best to approach the redesign policy.
“People have been hoarding the new notes on the speculation that the 31 December deadline for the old notes to seize to be legal tender may not be met.
“To effectively stabilise the economy, the Federal Government is of the strong view that the old versions of 200, 500 and 1,000 notes should continue to be legal tender alongside the new versions.
“Following the deadline for the validity of the old 200, 500 and 1000 Naira notes ordered by this Honourable Court will make the government of the federation to push the country into another national, economic and financial crisis which this Honourable Court sought to prevent in the first instance by its judgment in the afore-mentioned suit.
“The only way to save the nation from both of the above situations is by the order of this Honourable Court to grant the prayers in this application.
“Varying the order of this court will give effect to the intention of the consequential order which is to ensure that the removal from circulation of the old notes is only done when adequate structures have been put in place.
“That first defendant (Attorney-General of the Federation) has discussed the foregoing with counsel to the plaintiffs who have signified his concurrence and her undertaken not to oppose this application in the interest of national peace, security, economy and safety to grant this application.
“The plaintiffs/applicants will not be prejudiced by the grant of this application by this Honourable Court.”
In an affidavit in support of the Motion on Notice, an Assistant Chief State Counsel, Terhemba Damian Agbe said the CBN Governor, Dr. Olayemi Michael Cardoso, has confirmed that some Nigerians have started hoarding the affected old and new notes in anticipation of the December 31 deadline.
FLASHBACK
The Supreme Court on March 3granted the following demands of the 10 states.
Ï%A declaration that the demonetisation directive/policy by the President of the Federation to wit: withdrawal of the old 200, 500 and 1000 Naira notes is not consistent with the provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended) which make provision for the Executive Powers of the President of the Federation and the extant laws on the subject matter.
•A declaration that the three-month notice given for the implementation and completion of the said demonetisation policy by which time the old N1000, N500 and N200 Naira notes shall cease to be legal tender does not satisfy the condition set out in Section 20(3) of the CBN Act, 2007.
•A declaration that the President cannot unilaterally give a directive to embark on the demonetisation policy pursuant to Section 20(3) of the CBN Act, 2007, in view of Nigeria’s fiscal federalism, the economic interests of the constituents of the Federation and without consultation with, and advice from the plaintiffs individually, and in their capacity as members of the National Council of States and National Economic Council, and that the directive cannot be given without consultation with, and advice from the cabinet, the National Security Council and other stakeholders.
•A declaration that in issuing the directive for demonetisation policy pursuant to Section 20(3) of the CBN Act, 2007 on behalf of the Federation of Nigeria, the President is under an obligation to ensure that adequate structures are put in place for the plaintiffs and Nigerian citizens prior to the implementation of the said directives.
Further to the above reliefs and in order to ensure justice to the Plaintiffs/Respondents, this Honourable Court made consequential orders, to wit:
•An order that the old version of 200, 500 and 1000 Naira notes shall continue to be legal tender alongside the new or redesigned version until 31-12-2023.
•An order that the reception of old 200, 500 and 1000 Naira notes and the swapping of same with new Naira notes shall continue till 31st December 2023.
