29th November, 2023
The Supreme Court on Wednesday granted the application of the Federal Government to extend the lifespan of the N200, N500 and N1000 notes that were redesigned under the administration of President Muhammadu Buhari.
The apex court, in a unanimous ruling on Wednesday morning, ordered that the old notes remain legal tender until necessary facilities are put in place for their replacement.
It added that both the old and the new resigned naira notes remain legal tender till further notice, in a ruling by a seven-man panel of justices led by Justice John Okoro.
According to the apex bank, the banknotes should remain in circulation, pending when the Federal Government, after due consultation with relevant stakeholders, takes a decision on the matter.
The apex court made the order after it heard an application that was moved on behalf of the federal government by the Attorney-General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN.
It will be recalled that the court on March 3, nullified the ban on use of the old N200, N500 and N1000 banknotes as valid legal tenders by the President Muhammadu Buhari-led administration.
The court held that the old Naira notes should be used alongside the redesigned currencies, until the end of the year.
In its lead judgement that was prepared and delivered by Justice Emmanuel Agim, the apex court slammed FG for unilaterally introducing the demonetization policy, through the Central Bank of Nigeria, CBN, without consulting the Council of States, the Federal Executive Council, the National Security Council, the National Economic Council, Civil Society Organizations and other relevant stakeholders.
It held that FG failed to give valid notice to all the federating units, before it decided to withdraw the old banknotes from circulation and introduce new ones.
The Supreme court maintained that evidence before it established that a purported notice on the monetary policy was through “mere press remarks” by the governor of the CBN, Mr. Godwin Emefiele.
It held that such remarks did not qualify as “reasonable notice” to the states as envisaged under section 20(3) of the CBN Act.
Besides, the court invalidated the directive President Buhari gave in the broadcast he made on February 16, which allowed only the old N200 note to remain a legal tender till April 10.
While accusing President Buhari of disobeying the interim order it made on February 8, which directed that the old banknotes should remain in use till the determination of the case before it, the apex court stressed that the President, by going ahead to ban the old banknotes, acted in a way that was inimical to democratic governance.
According to the court, having acted in disobedience to its order, FG lost its right to be granted audience before it.
Following the end of the last administration, the President Bola Tinubu-led government re-approached the apex court for an indefinite extension of its December 31 deadline.
The Central Bank of Nigeria, CBN had on 14 November 2022 also indicated that the N200, N500 and N1,000 denominations redesigned in October 2022 will henceforth remain legal “ad infinitum ”.
“This is in line with international best practices and to forestall a repeat of earlier experiences.
“Thus, all banknotes issued by the CBN, in accordance with Section 20 (5) of the CBN Act, will continue to remain legal tender, even beyond the Dec. 31 deadline,” he said.
The director assured that the CBN was working with relevant authorities to vacate certain subsisting judicial pronouncements on the subject.
He said that all CBN branches across the country would continue to issue and accept all old and redesigned denominations of Nigerian banknotes to and from Deposit Money Banks.
Following the CBN announcement, the federal government also filed an application before the Supreme Court seeking an extension for old naira notes to remain in circulation.
In the fresh application, the attorney-general of the federation (AGF), the Federal Government said due to the economic crisis, it has not been able to print the volume of new notes that would enable it to phase out old currency before December 31.
According to Lateef Fagbemi, AGF, “since the said consequential order was made, the federal government, in compliance with this honourable court’s order, directed the CBN to engage and has been engaging the respondents in their individual capacities and in their capacities as members of the National Council of State and National Economic Council with respect to the Naira redesign policy”.
“In between the time the order was made and now, there was a presidential election in the country which has led to a transition from the immediate-past government and the incumbent government which is just settling down,” he said.
“The incumbent government has, however, directed the Central Bank to come up, by a way of policy direction, with how the naira redesign policy will be addressed in full compliance with the order of this honourable court.
“Whilst working on the policy direction and due to the economic crisis being witnessed by the government of the federation and other factors beyond its control, the government of the federation to date has not been able to print the new 200, 500 and 1000 naira notes in the equal proportion of the old 200, 500 and 1000 naira notes sought to be recalled as consultation with critical stakeholders is still on-going on how best to approach the redesign policy.
“People have been hoarding the new notes on the speculation that the 31 December deadline for the old notes to cease to be legal tender may not be met.
“To effectively stabilise the economy, the federal government is of the strong view that the old versions of 200, 500 and 1,000 notes should continue to be legal tender alongside the new versions.
“Following the deadline for the validity of the old 200, 500 and 1000 naira notes ordered by this honourable court will make the government of the federation to push the country into another national, economic and financial crisis which this honourable court sought to prevent in the first instance by its judgement in the afore-mentioned suit.
“The only way to save the nation from both of the above situations is by the order of this honourable court to grant the prayers in this application.”
The Supreme Court granted the request of the Federal Government with the judgment delivered today.