A wave of relief swept across the country yesterday after the Supreme Court extended the validity of the old N200, N500 and N1000 notes to December 31, 2023.
The apex court did not only faulted the procedure adopted by the Federal Government in introducing and implementing its cashless/naira swap policy, it also raised serious objection to government’s failure to obey its February 8th interim injunction ordering that the old notes should remain legal tender until the conclusion of the suit filed by 16 state governments.
Although the Supreme Court delivered its judgment in the suit as early as 12 noon yesterday, the banks were still awaiting directive from the Central Bank on the next step at press time.
Up to the close of operations by the banks yesterday, customers were all over the premises of the various financial institutions, struggling to access cash.
Many Point of Sale (POS) operators and automated teller machines (ATMs) had no cash to dispense.
House of Representatives Speaker Femi Gbajabiamila, Kaduna State Governor Nasir El-Rufai, the Manufacturers Association of Nigeria (MAN) and the Centre for the Promotion of Private Enterprise (CPPE) all hailed the Supreme Court judgment.
In the unanimous judgment, a seven-member panel of the apex court, led by Justice John Okoro, said the procedure adopted by government in effecting its cashless/naira swap policy was wrong.
Justice Emmanuel Agim, in the lead judgment, held that condition precedent was not met before President Muhammadu Buhari directed the Central Bank (CBN) Governor to distribute the new notes and withdraw the old ones.
According to him, the directive by President Buhari to the CBN governor to distribute new notes and withdraw old one was invalid because no reasonable notice was given to Nigerians as required under Section 20 (3) of the CBN Act.
He noted that rather than issuing a formal or public notice, what the CBN governor did was to simply give a press statement, which he equated to the required three-month notice under Section 20(3) the CBN Act.
He said the press statement did not qualify as a reasonable notice envisaged under the CBN Act.
The judge added that Federal Government’s reliance on the said press release as the notice of plan to distribute new naira notes and withdrawal of the old ones showed its disregard for the importance of giving reasonable notice as a valid foundation for the introduction of new naira notes and withdrawal of old ones.
He held that since the requirement that reasonable notice should be given was not met by the Federal Government, the directive given by the President to the CBN governor for the distribution of the new notes and withdrawal of the old ones was invalid.
Justice Agim expressed displeasure at government’s failure to obey the February 8th interim injunction ordering that the old notes should remain legal tender until the conclusion of the case.
He noted that rather than comply with the order, Buhari made a national broadcast varying the order made of the court.
He held that there was no dispute that Buhari disobeyed the court, because in doing so, the President in his February 16 broadcast directed that only the old N200 notes should remain in circulation.
Justice Agim held that the rule of law, on which our democratic governance is founded, does not give the President or any other person the discretion to vary a court order.
In addition, he said the disobedience of court order by the President in a democracy such as that of Nigeria was a sign of the failure the Constitution, a threat to democratic governance and a drift towards autocracy.
The judge held that had the Federal Government complied with due process and consulted widely before introducing such a policy with huge impact on the nation, the current disorderliness and pains being experienced by the citizens would have been avoided.
He said: “It is not in dispute that the President of Nigeriadid seek the advice of the National Council of State, the National Economic Council, the National Security Council, the Federal Executive Council and other stakeholders before directing the CBN governor to issue new naira notes and withdraw the existing ones.
“Before introducing such policy with far reaching effects on the constituent states of the federation, the President ought to consult widely with all stakeholders.”
He noted that even when the president realised belatedly the need to consult, he invited the CBN governor to brief the National Council of State on the policy, but still failed to heed the advice given by the council.
Drawing examples from Europe and other developed societies, Justice Agim said in most cases where new notes are introduced, they co-exist with the old notes for a minimum of one year.
He recalled that a hasty execution of the naira policy in India some years ago created major disruptions in the country’s socio-economic life as is being witnessed in Nigeria today.
Justice Agim faulted the cash withdrawal limit also contained in the policy and held that it was a violation of the right of the owners of such funds to their property, and therefore unlawful.
The court dismissed all the objections raised against the suit by the defendants – the Attorney General of the Federation (AGF), Attorney General of Bayelsa State and the Attorney General of Edo State.
The court held that as against the defendants’ contention that the suit ought to be filed at the Federal High Court, it was properly filed before the apex court because it bordered on dispute between some states and the Federal Government in regard to the President ‘s exercise of the Executive powers of the federation.
He also held that the plaintiffs had the locus standi (the legal right) to approach the court on the issue because the Federal Government’s economic policy has adversely affected their activities in the states and disrupted the socio-economic life of the people.
The judge also said that the CBN was not a necessary party in the case because it is an agency of the Federal Government, which was sued through the AGF.
Other members of the panel – Justices Amina Augie, Mohammed Lawal Garba, Ibrahim Saulawa, Adamu Jauro, Tijani Abubakar, including Justice Okoro – agreed with the lead judgment.
Governors Nasir El-Rufai, Yahaya Bello and Bello Muhammad as well as Bello Matawalle were in court to witness proceedings.