The Supreme court of Nigeria has ordered that the old 200, 500, and 1000 Naira notes remain in circulation in the economy till December 31, 2023, contrary to the decision of President Muhammadu Buhari.
In a judgment passed today, after resuming the plenary session on the case, the Supreme court, through Justice Emmanuel Agim, who read the lead judgement, nullified the CBN’s Naira redesign policy as an affront to the 1999 Constitution.
Justice Emmanuel 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. According to the court, the conflict between the federation and the states must include either law or facts and be supported by Section 23(2)1 of the constitution.
The court stated that the policy has caused some people to engage in trade via barter in this modern age to survive after President Muhammadu Buhari, in his earlier broadcast, acknowledged that the scheme is flawed and has many issues.
Related post: Supreme court to deliver judgment on Naira redesign policy on March 3
The court further stated that the President’s defiance of the decree from February 8 is evidence of dictatorship.
Background story to the Judgement
Following complaints from numerous Nigerians, the Central Bank of Nigeria (CBN) extended the deadline for the swap of old N200, N500, and N1,000 from January 31 to February 10. However, the Supreme Court ruled following a suit filed by the states that the Federal Government, the CBN, and commercial banks could not proceed with the February 10 deadline pending the outcome of a suit about the issue.
But, President Muhammadu Buhari ordered the apex bank to put the old N200 notes into circulation to coexist alongside the new N200, N500, and N1,000 banknotes for 60 days – by April 10, 2023 — in a national broadcast last Thursday. Also, he stated that the old N500 and N1,000 bills are no longer valid in Nigeria.
See his statement
“To further ease the supply pressures, particularly to our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 notes cease to be legal tender,” Buhari said in a televised nationwide address.
Since then, the President’s directive has drawn a barrage of responses and harsh critiques, including from governors of his party, the All Progressives Congress (APC).
Governors Nasir El-Rufai (Kaduna) and Yahaya Adoza Bello (Kogi state), who were also in court today, are amongst the major critiques of the policy, which has been characterised as an anti-party policy in the buildup to the just concluded Presidential elections.
Abubakar Badaru (Jigawa), Rotimi Akeredolu (Ondo), Umar Ganduje (Kano); Speaker of the House of Representatives, Femi Gbajabiamila; Minister of State for Labour and Employment, Festus Keyamo; and many bigwigs of the ruling APC have also openly censured and faulted the President’s directive, arguing that it has no grounds because the case is before the apex court.
Apart from the suit challenging the naira redesign policy, three State Governors- Kaduna, Zamfara and Kogi have filed another suit against Malami, and the CBN Governor, Godwin Emefiele, over contempt of court and their alleged failure to comply with the Supreme Court order on the old naira notes.
What this declaration means for Nigerians and the CBN
Although there hasn’t been a response from the FG or the CBN yet, the new development throws Nigerians into further pandemonium as to what next, given they have had to make do with the unavailability of the new notes, particularly the N500 and N1000 notes.
Although it hasn’t been convenient, the suffering brought on by the policy is gradually being accustomed to by Nigerians, who are waiting to see how the CBN will react if the Supreme Court’s ruling is followed this time around as opposed to the last, when the President himself disregarded it.
How the ruling affects gains by fintech and online banking
Since President Buhari’s directive to use the old N200 and new notes, Nigerians have been left at the mercy of fintech and online banking.
This has caused online banking transactions, particularly with fintech and banking apps to rise. According to the Nigeria Inter-Bank Settlement Systems (NIBSS), Nigerians spent N38.7 trillion over electronic channels in January 2023.
The value recorded on the NIBSS Instant Payment (NIP) represents a 45% increase year-on-year when compared to the N26.6 trillion recorded in the same period last year.
Thus, since fintech platforms facilitate these e-payment transactions, as Nigerians are forced to go cashless, thereby promoting a cashless economy, they have also gained astronomical revenues from Nigerians’ hardship.
If and only if the new judgement by the Supreme court is stuck by, it means that such gains like the traction would drastically reduce, causing the revenues of these fintechs to drop.
But what does the judgment mean for CBN”s drive to create a cashless economy? Speaking at a recent event to mark the first anniversary of the eNaira launch in Lagos, the CBN Governor noted that the plan is to go 100% cashless.
“The destination as far as I am concerned is to achieve a 100 per cent cashless economy in Nigeria”
Not forgetting the necessity for a cashless economy, the rate at which inflation is also accelerating is a major source of concern not only to the Central Bank of Nigeria (CBN) but also to most Nigerians.
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