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The naira crisis and CBN’s disdain for the rule of law

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That Nigerians can’t have unfettered access to their hard-earned cash deposits both across the counter in bank halls and automated machines, ATMs, coupled with the continued rejection of the old N1000 and N500 by institutions and citizens nine days after an order of the Supreme Court revalidating the notes speak volumes of the disdain the federal government Government and the Central Bank of Nigeria, CBN have for the judiciary and the rule of law.


We, therefore, demand that the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, SAN, should direct the CBN Governor, Mr. Godwin Emefiele, to as matter of national urgency, issue the relevant circular to commercial banks to fully comply with the recent judgement of the apex court which invalidated the Federal Government’s new naira design policy on the grounds that it was not done with due consultation with relevant stakeholders and in clear violation of constitutional provisions. This is necessary not only to reverse some of the damage done to the nation’s economy but ameliorate the suffering of most citizens.


Recall that the Supreme Court while ruling recently, on the suit instituted by Governors Nasir el-Rufai of Kaduna State, Yahaya Bello of Kogi State and Bello Matawalle of Zamfara State, and seven other states, against the central government and the CBN over the naira redesign policy declared that, the case had merit because the “demonetization 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 provision of the Constitution of the Federal Republic of Nigeria 1999 (as amended) which makes provision for the executive power of the President and the extant laws on the subject matter” and that “the three months’ notice given for the implementation and completion of the said demonetization policy by which time the old N1,000, 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.


According to the learned justices, President Muhammadu Buhari cannot “unilaterally give a directive to embark on the demonetization policy pursuant to Section 20(3) of the CBN Act 2007 in view of Nigeria’s Fiscal Federalism, the economic interest of the Constituents of the Federation and without consultation with, and advice from the plaintiff, 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 and that  in issuing the directive for “demonetization 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 directive”.


Continuing, the court maintained that “the demonetization directive/policy by the President of the Federation to wit: withdrawal of the old N200, N500 and N1, 000 notes unlawfully impede the exercise of the Executive Powers of the plaintiffs’ states and other obligations to facilitate and protect the welfare of the citizens of the said states pursuant to Section 5(2) and other provisions of the Constitution of the Federal Republic of Nigeria 1999(as amended) as well as other extant laws” while “the directive given by the President pursuant to Section 20(3) of the CBN Act 2007 limiting the amount that can be withdrawn and the charges therein without an enabling law is unconstitutional and not binding on the plaintiffs”.

Significantly too, the court ruled that “the directive of the President exercised is illegal to the extent that it restricts, without an enabling law, the rights of the plaintiffs to freely use their money in various bank accounts and that “the old version of N200, N500 and N1,000 notes shall continue to be legal tender alongside with the new or redesigned version until 31st December, 2023’’ even as the reception of old N200, N500 and N1,000 notes and the swapping of same with new Naira notes shall continue till 31st December, 2023.

Unfortunately, rather than comply with the court verdict, both Malami and Emefiele have maintained a curious silence leaving the citizens to continue to bear the brunt of the policy that continues to inflict unbearable pains, tears, avoidable hardship on the people and caused some deaths.

We, therefore, totally condemn their continued refusal to give full effect to the judgement more than a week it was pronounced as this constitutes serious affront on the rule of law and the integrity of the judiciary capable of degenerating into anarchy whose outcome nobody can predict. It is not only an aberration but undemocratic for an elected President or an agency of government to deliberately ignore the judgement of the highest court in the land for whatever reason especially a policy that is also against the primary purpose of any government which is the “security and welfare of the people”.

No doubt, the recently nullified  naira redesign and cash withdrawal limit policy of the apex bank is also in the national interest, notwithstanding the purported numerous advantages inherent in the policy. Indeed, it is lame duck, laughable and totally unacceptable arguments by some so-called experts that “there is no country in the world where the Supreme Court orders what currency is legal tender no matter how the matter is packaged and brought to it for adjudication” and that the Constitution makes currency related matters as an executive function with the CBN as an agent of the government with constitutional powers to issue and manage legal tender currency exclusively” in addition to the claim that the justices over reached themselves in making an order that nullified the CBN’s actions on the validity of the naira.

Rather sadly, it is evident and could be argued that Buhari had set a bad precedent for Emefiele to emulate when contrary to the Supreme Court initial interim injunction extending the validity of the N500 and N1000 notes to its next hearing date announced that, he would not obey the order. Subsequently too, Emefieleon his part announced that the bank wasn’t bound by that injunction and went ahead to override the order of the apex court in enforcing the deadline for the return of the affected old currency.

Again, we note with deep concern that the  CBN’s silence on the ruling has continued to engendered confusion in the banking industry with some of the commercial banks giving out the old naira notes, others apparently very recalcitrant while customers who accept the old notes are stuck with them.

Regrettably too, traders, artisans and cab drivers, who don’t have smart phones for internet banking, are also rejecting the old notes in favour of the new ones and Point of Sale (PoS) operators charging exorbitant charges when the new notes are available with many Nigerians vowing not accept the old notes until they hear  directly from Buhari or the CBN governor that the old notes remain legal tender and should be accepted by all.


In other words, citizens, corporate organizations, micro, small and medium scale enterprises that require urgent cash for daily transactions are denied access to their money and left to swallow the bitter pill of hot chase for the now elusive and scarce naira notes as most of the money deposit banks cannot pay as low as N5000 cash daily to their respective customers who thronged the banking halls all to no avail. It is a reality that POS operators charge as much as N300 per N1000 dispensed to a customer in parts of the country with no promoter of the cashless policy coming to their rescue.

Though many Nigerians are in support of the noble intentions behind the currency swap policy, the design and implementation of the policy based on the current suffering of the people had fallen short of expectations and against international standards and best practices despite the trumpeted merits of the policy.

Some of the gains of the naira redesign according to the CBN, include the successful retrieval of over N2.1 trillion out of the N2.7trillion banknotes previously held  outside the banking system, since the commencement of the programme, a strengthening of Nigeria’s  macro economic parameters, reduction of broad money supply leading to a deceleration of the velocity of money in the economy which should result in less pressures on domestic prices; lowering of inflation due to the accompanying decline in money supply that will slow the pace of inflation; collapse of illegal economic activities which would help to stem corruption and acquisition of money through illegal ways; exchange rate stability and a drastic reduction in kidnapping for ransom among others.


However, the greatest concern of most depositors currently is how long it will take the CBN to clear the various obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy and cash readily made available to the banking public in line with the apex court order. These hurdles should be removed forthwith to alleviate the suffering of depositors, their families and relatives given the unacceptable number of failed transactions recorded in banks apparently due to inadequate infrastructure for the smooth operation of the cashless policy.


We, wholeheartedly throw our weight behind the latest move by the ten states that initially approached the Supreme Court on the issue to follow it up with a fresh legal battle with the Federal Government and the Central Bank of Nigeria (CBN) to compel both to do the needful if they fail to immediately comply with the March 3rd judgement of the apex court extending the validity of the old naira notes until December 31 this year as there is no alternative to total adherence to the rule of law and full compliance with court orders by the government and the citizens.



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