Supreme Court orders CBN to allow use of old naira notes

The Supreme Court of Nigeria has ruled on the validity of old naira notes the federal government eased out of circulation last month causing widespread suffering.

– A key point to note

The court said the Central Bank of Nigeria should continue to allow the use of the old 200, 500, and 1000 naira bills till December 2023. The notes are to circulate alongside the new bills the bank introduced.

– Why it matters

If the CBN complies immediately, citizens would have more cash and those who had unused notes will be able to exchange them. The ruling is expected to bring instant relief to longsuffering citizens who have endured months of devastating cash shortages that have destroyed businesses and left residents unable to meet basic needs like food and water.

The bank and President Muhammadu Buhari did not implement the court’s earlier directive that the situation be allowed to remain the way it was when the matter was first introduced to court.

– Learn more

The cash crisis began in October 2022 when the central bank announced that new naira notes would be introduced in higher denominations to fight counterfeiting and hoarding. Nigerians had until Feb. 10 to turn in old notes. Many did so, expecting to receive the new notes in return.

It became clear the banks did not have enough of the new notes and had to ratio the few new notes available.

Sixteen governors took the matter before the highest court, asking it compel the CBN to allow the continued use of the old notes. The governors, mostly of the ruling APC, accused the Buhari administration of using the policy against the presidential election candidate of the party, Bola Tinubu. Mr Tinubu was declared president-elect on Wednesday.

On Friday, a seven-member supreme court panel led by John Okoro unanimously directed that the CBN must continue to receive the old notes from Nigerians.

Justice Emmanuel Agim, who read the judgement, criticised President Buhari’s disobedience of the court’s earlier directive and said Mr Buhari’s February 16 broadcast giving a counter order smacked of “autocracy”.

“It is not in doubt that the president refused to comply with the order of the court that the old 200, 500, and 1,000 naira notes should continue to be legal tender,” the court said.

“Interestingly, there is even nothing to show that that the president’s directive for the release of N200 notes was implemented.

“I agree that the first defendant ought not to be heard when the president has refused to obey the authority of this court.

“Disobedience of order of court shows the country’ democracy a mere pretension and now replaced by autocracy. This suit is meritorious.”