Three states drag CBN before Supreme Court asking it to suspend ongoing demonetisation policy

THREE state have dragged the Central Bank of Nigeria (CBN) to court asking that it be compelled to end the ongoing demonetisation policy of the federal government until it complies with relevant provisions of the law.

On November 23 last year, the Central Bank of Nigeria (CBN) launched redesigned ₦‎200, ₦‎500 and ₦‎1000 banknotes, saying the naira was long overdue to wear a new look. Nigerians had been given until January 31 to hand in all old notes, after which time they will cease to be legal tender but the process has been fraught with difficulties, prompting the National Assembly to ask the CBN to extend the deadline.

Under pressure from all angles, CBN chairman Godwin Emefiele announced a new deadline is now February 10. However, the last week has been sheer hell for Nigerians as they have found it impossible to get hold of these new notes and this currency scarcity has created shortages in other areas, with petrol shortages now a chronic problem too.

At commercial banks across the country, there are chaotic scenes as customers queue for hours to get hold of these scarce banknotes. Those that manage to get hold of any money then have to spend hours queuing for fuel and to make things worse, voters who want to participate in this month's elections, when have to go and queue for hours to obtain their permanent voters cards.

In the midst of all this chaos, the Kaduna, Kogi and Zamfara state governments have asked Nigeria's Supreme Court to order the immediate suspension of the demonetisation policy. These three states, in an originating summons filed on February 3 by a team of lawyers led by Abdulhakeem Mustapha, raised four questions for the court’s determination.

Their suit stated that the demonitisation policy being currently carried out by the CBN under the directive of the president is not in compliance with the extant provisions of the constitution, the Central Bank of Nigeria Act, 2007 and extant laws on the subject. They also claim that the three-month notice given by the federal government through the CBN for the expiration of old banknotes, is in gross violation of the provisions of Section 20(3) of the Central Bank of Nigeria Act 2007 which specifies that reasonable notice must be given before such a policy.

Also, their suit adds that in view of the express provisions of Section 20(3) of the Central Bank of Nigeria Act 2007, the federal government, through the CBN, has no powers to issue a timeline for the acceptance and redeeming of banknotes, except as limited by Section 22(1) of the CBN Act 2007, and the CBN shall at all times redeem its bank notes. They are asking for an injunction restraining the federal government and its agents, including the CBN and commercial banks, from ending on February 10, the timeframe within which the now older versions of the 200, 500 and 1000 denominations of the naira may no longer be legal tender pending the hearing and determination of the substantive suit.