Confusion and uncertainty are clouding a currency redesign programme that was meant to fight inflation and reduce cash outside the banking system.
Nigerians are caught in the ensuing politics over the naira redesign after the Supreme Court’s ruling last week threw the country into confusion, with individuals and businesses unsure whether to accept or refuse the old notes.
The Supreme Court issued an interim order restraining the Federal Government either by itself or acting through the Central Bank of Nigeria (CBN), commercial banks and others from banning the use of the old naira notes on February 10, 2023 pending the hearing of the motion on notice adjourned till February 15 (today).
Nigerians were divided over the ruling as some believe that the Supreme Court does not have the jurisdiction over the matter and so the ruling is not binding on the CBN while others are of the view that the apex bank ought to obey the court order.
Godwin Emefiele, governor of CBN, insisted on Tuesday that the February 10, 2023 deadline for phasing out the high-value naira was sacrosanct.
Following the Supreme Court ruling, many Nigerians and businesses continued accepting the old notes amid the scarcity of the new ones, even as banks issued notices regarding the February 10 deadline for the expiration of the old banknotes.
At some bank branches in Apapa, Surulere and other parts of the country on Tuesday, banks only attended to customers who came to resolve issues caused by transaction failures or carry out transfers. Many automated teller machines were not dispensing cash.
Some Nigerians were at various banks to deposit their old naira notes but the banks were not accepting them.
“I am stuck with old notes of N187,000 now as my bank is not accepting it as a deposit,” said a Point of Sale operator who simply identified himself as Chibuzor.
“We were not clear on the directive as regards the deadline. The CBN said it is February 10 but the Supreme Court ruled that both old and new notes should coexist until otherwise and its ruling overshadows that of the apex bank,” he said.
According to him, CBN did not come out to give further clarity and Nigerians took its silence as agreeing to the court ruling.
Theresa Ugwu, a trader at Agboju, in Lago, said she was at the bank on Tuesday morning to deposit her N40,000 old notes but could not.
“I was told by the bank officials that they have stopped collecting old notes since last Friday. I was asked to go back home and continue trading with the old notes with other traders,” she said. “I have also stopped collecting old notes now because this is the capital for my business.”
In Mile 12 Market, the largest food market in Lagos, many traders who were still collecting the old notes on Monday have started refusing it.
“I stopped collecting the old notes this morning since banks are no longer collecting them again. I do not intend to go to CBN’s office to deposit any old notes,” Bolu Ajayi, a hairdresser in Ketu Market, said.
Emefiele had on January 31, 2023 assured the members of the public that nobody would lose money as banks would continue to accept old naira notes after the deadline.
Commenting on the Supreme Court ruling, Kalu Aja, a banking and asset management professional, tweeted, “The Supreme Court should not get involved in monetary policy. Do not set a preference. Another Supreme Court may sue to stop the CBN from raising interest rates (MPR). The parties suing should show what laws CBN has broken by redesigning the Naira and mandating a terminal date.
“The irony is no one has sued the CBN for a clear breach of the CBN Act that mandates only 5 percent of past year revenues can be printed as Ways & Means to the Federal Government. That was spending without appropriation and a clear constitutional breach.”
Tope Fasua, CEO of Global Analytics Consulting Limited, said: “I think the Supreme Court is on point given the untold suffering of our most vulnerable people. It is one thing to change currency, which I support. But it is another thing entirely to withhold people’s hard earned money from them in the name of what is now proving to be a draconian policy.
“The implementation of this project has given a bad name to currency management and allowed those who never want any positive change the leeway to brag. I don’t believe that Nigeria cannot get anything right. So I hope the CBN obeys the Supreme Court or stands condemned in public opinion no matter that some Nigerians are using this for political ends.”
Muda Yusuf, CEO of Centre for the Promotion of Private Enterprise, described the restraining order by the Supreme Court on the matter as unambiguous.
“The order is to address the inherent public interest issues as well as the implications for the fundamental human rights of the citizens,” he said. “What I expect is for the CBN to comply with this order. Failure to do so could amount to contempt of court. If the order had been obeyed, the currency crisis would have eased considerably.”
Akpan Ekpo, professor of economics/past director-general, West African Institute for Financial and Economic Management, said the central bank ought to obey the court ruling.
He said: “Supreme Court is the highest court in the land, and CBN is owned by the federal government. I don’t see anything wrong if they have any disagreement but the point is that for matters for the state versus federal government, the Supreme Court is where they go to; that is why they took their grudges to the Supreme Court.
“Since the court has said that let the status quo remain until they hear the case tomorrow (today), I think they should obey the Supreme Court. The Supreme Court has the right as the CBN is not an abstract institution; it is owned by the Nigerian people, by the federal government.”
According to Ekpo, the CBN is independent but not above the law.
“There is the CBN’s independence but it doesn’t mean that if you have a problem with them, you can’t go to court; they have institutional autonomy but it is not total. They are an agency of the government; without the Nigerian people, there is no central bank. So they have to also fall in line with the constitution of the government and the law. They are an organ of the government and bankers to the government. Their independence is not absolute,” he added.