Why Nigeria’s Supreme Court vetoed the country’s Central Bank’s verdict on naira

The Nigerian supreme court has temporarily halted the ban on old naira notes.
The old notes were supposed to be considered non-legal tender by the 10th of February 2023.
The decision by the supreme court was reached by a seven-member panel led by Justice John Okoro.

Plans to outlaw the use of the old naira notes nationwide on the 10th of February 2023 have been temporarily put on hold by Nigeria's Supreme Court.

This decision is following massive bouts of civil unrest across numerous states within Nigeria. The supreme court’s decision was also spurred by a scarcity of the redesigned notes, and the further complications it could result in.

In November of 2022, the governor of the Central Bank of Nigeria, Godwin Emefiele, announced that some of the legal tenders in the country, specifically the N100, N200, N500, and N1000 notes would be redesigned. This redesign was initiated to strengthen the currency's value, amongst other reasons.

The governor of the Central Bank noted that this was the bank’s directive with the endorsement of the Nigerian Federal Government, spearheaded by the country's President Muhammadu Buhari.

By December, the Naira had been redesigned and Nigerians were instructed to return their old notes to the bank on or before January 31st, 2023. However, the Central Bank was forced to extend this deadline owing to a scarcity of new currency notes, and the new date was set at 10th February 2023. Read the story here.

As mentioned earlier, the deadline has been annulled by Nigeria’s supreme court, which ruled that the old notes would continue to be considered legal tender till further notice.

A seven-member panel led by Justice John Okoro made the decision on Wednesday morning, stopping an exparte plea filed by the three northern states of Kaduna, Kogi, and Zamfara. The case has been adjourned until February 15 for a hearing of the main suit.

Prior to the hearing and decision on their motion on notice for an interlocutory injunction, the three states had explicitly asked for an order of interim injunction prohibiting the Federal Government and the Central Bank of Nigeria (CBN) from setting February 10 as the deadline for the use and circulation of the old N200, N500, and N1000 notes.

For justice and the welfare of Nigeria, the applicants' attorney, Mr. A. I. Mustapha, SAN, pleaded with the top court to accept their request. He said that the government's policies had resulted in a chaotic scene across Nigeria.

He further stated that according to figures from the Central Bank of Nigeria (CBN), over 60% of Nigerians do not have bank accounts and that as a result of the policy, they are unable to even access their money in the bank.

The Central Bank of Nigeria (CBN), President Muhammadu Buhari, and 27 commercial banks had previously been barred by the Federal Capital Territory (FCT) High Court from suspending or interfering with the currency redesign deadline of February 10th or issuing any directive contrary to the said date.

In support, 13 of Nigeria's 18 political parties threatened to boycott the elections should the deadline be extended for a second time. But with civil unrest and no real solution to the complications surrounding phasing out the old notes just two days before the CBN’s time-limit, the supreme court had no choice but to step in.