Naira swap: Court restrains Buhari, CBN on Feb 10 deadline

With three days left to the expiration of the February 10 deadline, a Federal Capital Territory (FCT), High Court, has compelled the Central Bank of Nigeria (CBN) and 27 commercial banks to go ahead with the full implementation of the naira redesign policy, restraining President Muhammadu Buhari from further extending the deadline.

In a motion by four political parties, namely Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM), the court, presided over by Justice Eleojo Enenche, also granted an order directing the CEOs of the 27 commercial banks and their alter egos to show cause why they should not be arrested and prosecuted for the economic and financial sabotage of the country by their illegal hoarding, withholding, not paying or disbursing the new N200, N500 and N1000 banknotes despite supply of such notes by CBN.

Delivering a ruling, yesterday, in a suit marked FCT/HC/CV/2234/2023, the court restrained CBN from extending the deadline on the use of old naira notes pending the determination of the suit. The order will be for an initial period of seven days until the motion of notice is heard on February 14.

“An order of interim injunction is hereby made restraining the defendants, whether by themselves, staff, agents, officers, interfacing banks or whosoever not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500 and N1,000 bank notes, being February 10, 2023, pending the hearing and determination of motion on notice,” the court held.

The judge also made an order of interim injunction “directing and mandating the defendants whether by themselves, staff, agents, officers, interfacing banks or whosoever described to comply with, implement and give effect to the currency redesign and restructuring of the old N200, N500 and N1,000 bank notes on or before the last day of February 10, pending the hearing and determination of motion on notice.”

The court further directed bank heads, chief executive officers, managing directors and/or alter egos “to forthwith show cause as to why they shall not be arrested and prosecuted for the economic and financial sabotage of the Federal Republic of Nigeria by their illegal act of hoarding, withholding, nor paying or disbursing the new N200, N500 and N1000 bank note, being the legal tender of the Federal Republic of Nigeria to their respective customers, despite supplies of such currency note by the second and third defendants, thereby leading to the present scarcity of currency notes in circulation.”

The order of the court has rendered futile all behind-the-scene efforts, especially by governors of the ruling All Progressives Congress (APC) to force the hand of the President to reverse the naira swap policy or at least further extend its deadline.

EARLIER, yesterday, three APC governors sued the Federal Government over the naira redesign policy. Governors Nasir el-Rufai (Kaduna), Yahaya Bello (Kogi) and Bello Matawalle (Zamfara) dragged the Federal Government before the Supreme Court.

The states are seeking a declaration that the Demonetisation Policy of the Federation being currently carried out by CBN under the directive of President Buhari is not in compliance with the extant provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended), CBN Act, 2007 and actual laws on the subject.

They are also asking the court to make a declaration that the three-month notice given by government and CBN, the expiration of which will render the old notes inadmissible as legal tender, is in gross violation of the provisions of Section 20(3) of the CBN Act 2007, which specifies that reasonable notice must be given before such a policy and that the limit cannot be outside that provided under Section 22(1) of the CBN Act 2007.

Attorney General and Commissioner for Justice, Kaduna State, Aisha Dikko, in an affidavit, averred that although the naira redesign policy was introduced to encourage the cashless policy of the Federal Government, it is not all transactions that can be conveniently carried out through electronic means.

Dikko also pointed out that the Federal Government has embarked on the policy within a narrow and unworkable time frame, and this has adversely affected citizens within Kaduna, Kogi and Zamfara states as well as their governments, especially as the new notes are not available for use by the people, as well as the state governments.

“That the majority of the indigenes of the plaintiffs’ states, who reside in the rural areas have been unable to exchange or deposit their old naira notes as there are no banks in the rural areas where the majority of the population of the states reside,” she said.

No date has been fixed for hearing.

Governors of the ruling party had met with the President last week and pleaded with him to allow old notes and the new ones co-exist. The President told them to give him seven days to look into issues arising from naira redesign.

However, after the meeting, CBN Governor, Godwin Emefiele, warned that the apex bank was not considering shifting the February 10 deadline for the old notes to cease to be legal tender.

BUT Edo State governor, Godwin Obaseki, has backed the Federal Government’s policy, saying moving the nation’s economy to a cashless system should be supported by Nigerians because it is the best for the nation’s banking system.

Obaseki said this in Benin, yesterday, while speaking with journalists after a meeting with CBN officials and senior management of banks in the state on ways of finding solution to naira notes scarcity.

He said: “Edo State government has no problem with the policy to move our economy into a cashless economy. The policy should be encouraged, it is the best for our banking system.

“However, we want to ensure that we do this as painlessly and as seamlessly as possible, improve on communication with our people so that we can reduce their fears because when people go to the banks to collect cash, they want to spend it on something.”

Obaseki said his administration would join hands with CBN and the bankers’ committee in the state to monitor the situation and resolve the problems, adding that the meeting was called due to his concern over the hardship on the people.

On his part, Blaise Ijebor, CBN Director, said he was in Benin to encourage people to use alternative means to make payment for business transactions.

“You can use your ATM card, bank app or USSD code to make payment. So, use alternative means as much as possible but we are going to make sure that there is cash supply within the next day or two,” he said.

He added: “We have asked banks to pay up to N20,000 but because of the crowd, some banks might not be able to pay N20,000 at once. So, if they can pay N5,000 or N10,000, use that to manage for the next day or two. We are going to make supply available.”

Protesters under the aegis of Pro-Nigeria Group, yesterday, stormed parts of Abuja, including the Unity Fountain and the CBN head office in a solidarity walk in support of the policy on naira redesign. The protesters, in their numbers and carrying various placards threw their weight behind the policy, saying it will help to curb the perennial problem of vote buying in the forthcoming 2023 general elections.

Addressing journalists, Mr. Isaac Balami, convener of Pro Nigeria Group, said the group backed the CBN policy because it is good for the economy.

“CBN had given 10 days extension but politicians are trying to play politics, to blackmail CBN and possibly blackmail the President to go back on his words. We are here to support the monetary policy. This policy will stop vote buying. Vote buying is a major problem and it has destroyed Nigeria. Enough is enough,” he added.

The PNG accused commercial banks of hoarding the new currency provided by the apex bank and selling them to politicians at a black market rate and called on the CBN to ensure that all the banks flouting its directives are properly sanctioned.

The group appealed to Nigerians to be patient as it expects CBN to urgently address the bottlenecks currently being experienced.

MEANWHILE, 14 of the 18 registered political parties participating in the general elections have threatened to withdraw all participation from the polls if the Federal Government and CBN cancel or suspend the cash withdrawal limit and naira redesign policies.

This position was made known yesterday at a press conference by the Forum of Chairmen of Nigerian Political Parties and Forum of Candidates for the 2023 General Election. The candidates’ forum comprised Presidential, National Assembly, Governorship and House of Assembly candidates.

The text of the press conference was read by the spokesperson of the forum, Kenneth Udeze and National Chairman of Action Alliance.

The forum declared: “We, hereby, announce our resolution that at least 14 of the 18 political parties in Nigeria will not be interested in the 2023 general elections and indeed we shall withdraw all our participation from the electoral process if these currency policies are suspended or cancelled or if the deadline is further shifted.”

Defending the policies, the forum stated that the policies will enhance the credibility of the election. “In fact, if these policies are implemented fully and without shifting the deadline of February 10, President Buhari would have taken a very huge step closer to fulfilling his promise to the world that the 2023 general elections would be credible, free and fair.”

THE Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has said CBN should have introduced a N5,000 note rather than embarking on a currency redesign.

Speaking yesterday during an interview, Sola Obadimu, director-general of NACCIMA, said there would have been less pressure on Nigerians if the naira redesign policy was implemented differently.

Obadimu said the creation of a new N5,000 note would have mopped up the money in circulation without creating discomfort. He said the CBN would have also spent less money on printing new notes.

“If I were the CBN governor, all I would have done was to have introduced a N5,000 note. That would have helped to mop up the money in circulation without the kickbacks we are getting. Because it is a higher denomination, fewer amounts of bills would have been printed.’’

On the CBN’s cashless policy, the NACCIMA DG said it was a laudable initiative because “that is where the world is heading”.

He, however, expressed reservations with government’s level of preparedness, particularly in the aspect of internet infrastructure.

“For instance, when a financial transaction declines, you get debited and the bank cannot refund you for up to three weeks even if the transaction is to the same bank,” Obadimu said.

“So, for the urban network to improve and for the rural areas to catch up, the government has to invest heavily in infrastructure so that every part of Nigeria will be digitised.”