The redesigning of three naira notes (N1,000, N500 and N200) has been as contentious and controversial as some policies and programmes of government aimed at changing the narratives. In a country with so much diversities and interests, policies and programmes of government are usually interpreted from personalised prisms by those who do not want a change, in an attempt to claim the victim. It is a typical Nigerian behaviour or misbehaviour, a thing that has been at the heart of our slow progress.
The Central Bank of Nigeria (CBN), acting on the powers vested in it as the apex bank, formulator and manager of monetary policies, had, last October, given notice that the affected bank notes would be redesigned and come into use from December 15, 2022. The old naira notes, the CBN also said, would cease to be legal tender from January 31, 2023.
As promised, the CBN did inject the new naira notes into the system from December 15, 2022. The new notes and the old ones were expected to be in use concurrently from that day to January 31, 2023, when the old notes would leave the system. However, a few days to the deadline, the CBN gave an extension of 10 days, till today, for the old notes to cease being legal tender. This is not to be, albeit temporarily, as the Supreme Court has halted the plan, following a suit brought before it by three governors. With a Supreme Court order for the Federal Government and the CBN to stop the planned total implementation of new naira notes policy and the phasing out of the old notes, the ‘evil day’ has been postponed.
Justice Okoro, while ruling in the suit brought by the governors of Kaduna State (Malam Nasir El-Rufai), Kogi State (Alhaji Yahaya Bello) and Zamfara State (Alhaji Mohammed Matawalle Bello), had declared on Wednesday, while adjourning the suit to February 15, 2023, for a hearing: “An order of interim injunction restraining the Federal Government through the Central Bank of Nigeria (CBN) or the commercial banks from suspending or determining or ending on February 10, 2023, the time frame with which the now older version of the 200, 500 and 1,000 denomination of the naira may no longer be legal tender, pending the hearing and determination of their motion on notice for an interlocutory injunction.” The governors had sought an interim order to that effect.
While it is obvious that the Supreme Court has not determined the suit brought by the governors but only gave a temporal order pending the determination of the case, there are other issues relating to it. The pertinent question is: Does the Supreme Court have jurisdiction to hear a suit wherein state governors are challenging the decision of an agent of the Federal Government? This question is germane because Section 230 to 236 of the 1999 Constitution (as amended) provides thus: “The Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute between the federation and a state or between states if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends,” among others. This is usually in matters pertaining to the interpretation of the Constitution.
The naira redesigning, in my layman’s knowledge of the law, is not about whether the Federal Government or the state government has the power to act on it, with regard to constitution provisions. It is about three states challenging the CBN, a federal government institution, over the latter’s action based on powers conferred to it by Act of parliament, basing their action on the difficulty in getting the new naira notes and the suffering of the people over it. A suit challenging the action of the CBN, in my opinion, should rather go to the High Court and not the Supreme Court. The Supreme Court should entertain the case only when it gets to it on appeal, after the High Court and the Court of Appeal must have decided the matter.
One had expected the Supreme Court, therefore, to decline jurisdiction. Since it did not decline jurisdiction at the first sitting, the February 15 hearing date should serve as an opportunity to so do based on the facts stated above. The aggrieved governors ought to have gone to the proper court to seek redress. The CBN has the power to redesign the naira and to set a deadline for the old notes ceasing to be legal tender. Section 20 of the CBN Act 2007 clearly states, in sub-section 3: “Notwithstanding Sub-sections (1) and (2) of this section, the Bank (CBN) shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this Sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to Section 22 of this Act, shall be redeemed by the Bank upon demand.”
Section 22, states in sub-section 1: “A person shall not be entitled to recover from the Bank the value of any notes lost, stolen, mutilated or imperfect note or coin; (2) The circumstances in which, and the conditions and limitations subject to which, the value of the lost, stolen, mutilated or imperfect notes or coins may be refunded ex gratia shall be within the absolute discretion of the Bank.”
The CBN gave notice on the change of the affected naira notes in October last year. It said the old notes would cease to be legal tender with effect from January 31, 2023, three months after. It extended the deadline by 10 days, to today. The apex bank has also said that, after the February 10 deadline, it would still redeem the old notes on presentation. By saying that it would still redeem the old notes beyond February 10, it does not presuppose that they are still instruments of transaction, but rather for redemption. Therefore, the push for the extension of deadline leaves much to be desired.
One suspects that those opposed to the deadline are not really pushing for the CBN to redeem old notes beyond February 10, 2023, but actually want the use of the old notes to continue. With such an attitude, what such people want is to frustrate the phasing out of the old notes in its entirety. It is curious that opposition to naira redesigning and deadline set by CBN for the use of the old notes is coming mainly from the All Progressives Congress (APC). It is also curious that the presidential candidate of the APC, Asiwaju Bola Tinubu, had alleged that the naira redesign policy was targeted at him. Some of his supporters also believe so. One must ask: Why should they think that the policy was targeted at Tinubu?
The naira redesign is a national policy. The gains and losses therefrom are for the country. All Nigerians, irrespective of tribe, creed and location, are experiencing the sufferings brought about by the policy, owing to distribution failure. Why then would Tinubu say it was targeted at him? Such a belief gives those opposing the naira redesign away as hiding something from the rest of us. One has wondered if the APC presidential candidate and his supporters, who think that the naira redesign policy is against them, do really know that such an argument or allegation portrays them as being in possession of the excess cash the CBN said it could not account for because it is outside the banking system, warehoused in private vaults, and, therefore, the naira redesign has caught them in its web? Being in possession of cash beyond the stipulated amount, in itself, is a crime. It amounts to money laundering. This is why these people should be circumspect in their talks and allegations.
Many gains have been outlined to derive from naira redesigning. Experts have said it would strengthen the currency, reduce inflation, reduce amount of cash outside the banking system, majorly used for illicit activities, boost fiscal policy, bring more people into the banking network and entrench cashless transaction regime. If these are achieved, it would help in economic growth and stability. What Nigerians should be canvassing is how to make the transition from the old notes to the new ones easier, with reduced hitches and suffering by the people, and not to push for the halting or abortion of the policy.
Currency control is good. Whatever mistakes made in the redesign policy, which brought about the scarcity of the new notes, must be addressed. If the CBN did not print enough new notes, it should do so. If the apex bank printed enough and sent to commercial banks, but the latter refused to circulate them, this must be addressed as a matter of urgency. It is really funny that hawkers of naira notes have new notes to sell, while bank customers cannot get them from the automated teller machines (ATMs) or over the counter. The CBN must take measures to solve the problem, using close monitoring of commercial banks and the quick distribution of the new notes to points where bank customers would have access to them.
One is persuaded that, if the CBN and the commercial banks played their roles well in the naira redesign policy, the current suffering by Nigerians, who have suddenly been rendered cashless not because they do not have money but simply because they cannot have access to their money in the bank, would not suffice. It is expected that, between now and perhaps, February 15, when the Supreme Court would come back to hear the case instituted by three APC governors, the CBN would have taken measures to ensure that the new naira notes are in great circulation and that access to them by Nigerians is seamless. There is nowhere in the world where cashless policy portends that people do not hold cash. Cash and online banking transactions operate side by side, with strong policies regarding cash transaction thresholds.
Let the Supreme Court decide jurisdiction regarding the case. Let the judiciary serve as an arm of government contributing to effort at building strong institutions rather than working against them. Let the judiciary be apolitical and dispassionate in handling cases. Let those who have ulterior motives not be allowed to use the judiciary to emasculate a government institution like the CBN and, therefore, truncate a wholesome policy like naira redesign and the cashless policy. If this happens, the CBN would become a toothless bulldog and this would destroy the financial system. What the legislature should do is to put in place a law that forbids the court from stopping monetary policies, just like it is for elections.