Nigeria has in the past, had reasons to change, redesign and redenominate its currency; but, never, in the annals of the nation’s political history, has such an exercise brought so much hardship, confusion, apprehension, rancour and despondency, like is currently being witnessed and experienced. Perceptible disobedience to the order of the Supreme Court, pitching States against the Federal Government, and gradually descending to the masses against the Federal Government, resulting in unimaginable angst, expressed in wanton destruction of properties of financial institutions, and even loss of lives. All these coming a few days to the nation’s general election, will undoubtedly have consequences on the polls. Ebun Adegboruwa, SAN, Chief J.B. Daudu, SAN, Chief Anthony Aikhunegbe Malik, SAN, Dr Monday Ubani, Dr Sam Amadi, Kede Aihie and Jide Ojo interrogate the complex issues surrounding the present political, executive cum judicial quagmire Nigeria finds herself
Presidential Broadcast on Naira Redesign: Guilty As Charged –
Ebun Adegboruwa, SAN,
Background
On February 8, 2023, the Supreme Court of Nigeria made an order directing that the old Naira notes of N200, N500 and N1000 should continue to circulate alongside the new Naira notes, pending the hearing and final determination of the Motion on Notice filed by three States before the Court. The case was then adjourned to February 15, 2023. In its reaction to the suit and the order made therein, the Federal Government of Nigeria, through the Honourable Attorney-General of the Federation, filed its processes in the suit and gave an undertaking to obey the order of the Supreme Court. In the meantime, the problems associated with the scarcity of the new Naira notes continued unabated. At the behest of the President, the Council of State met, and gave an advice that if the new notes are not sufficiently available, then the old notes should continue to circulate concurrently with the new notes, until such a time that the latter will circulate widely. When the case came up before the Supreme Court on February 15, 2023, the interim order previously made was validated and extended.
President’s Broadcast
The following day on February 16, 2022, the nation woke up to listen to the President in his nation-wide broadcast on the crisis of the old and new Naira notes. The highpoint of the President’s broadcast is best captured in the now infamous declaration that the old N500 and N1000 notes have ceased to be legal tender, and that the old N200 will remain legal tender till April 10, 2023.
There are many absurdities in the President’s broadcast. The President himself acknowledged in that broadcast that the issue of whether or not the old Naira notes will remain legal tender, is already pending before the Supreme Court and he is a party in that case through his Honourable Attorney-General. If that is the case (and indeed, it is), then where lies the locus of the President to dabble into making proclamations on a matter pending before the Court? The President is not entitled to take the law into his own hands, by seeking to overreach whatever decision the Supreme Court may take on the matter, ultimately. Also, there is already a subsisting order made by the Supreme Court to preserve the status quo of the subject-matter of the case before the Court. The President cannot disobey or circumvent that order, in whatever form at all.
The statement by the President that the old N500 and N1000 notes have ceased to be legal tender amounts to overruling the subsisting order of the Supreme Court, which he has no powers under the law to do.
In every democratic setting such as obtains in Nigeria, there is the hallowed doctrine of separation of powers, by which the organs of government work separately and independently, without seeking to interfere with or undermine the statutory functions of the other organs. By virtue of Section 6(6)(b) of the 1999 Constitution, the judicial powers vested in the Courts extends to the determination of disputes between persons and persons, between persons and governments and between governments and governments. And, once that dispute is submitted to the Court for adjudication, the parties lose the power to act or take any decision on the subject matter, otherwise we will be faced with a situation of complete anarchy and lawlessness. The reason for seeking to preserve the subject-matter of a suit pending before any court, is simply to avoid situations whereby the decision that may be reached by the Court on the case on the merit loses value, or that the Court is made to face a situation of ‘fait accompli’ or complete helplessness. In this instance, suppose the Supreme Court decides ultimately that in line with Section 20(3) of the Central Bank Act, the old Naira notes will continue to be legal tender? Meanwhile the President has by his broadcast declared them illegal. That creates confusion in the land, because people now have to decide who to obey, between the Supreme Court and the President.
By virtue of Section 235 of the 1999 Constitution, “… no appeal shall lie to any other body or person from any determination of the Supreme Court.” In other words, the Supreme Court is the final authority in legal pronouncements in Nigeria. The Constitution is very careful in the selection of words to state no other “body” or “person” should seek to exercise authority over the Supreme Court, which is what the President has done through his broadcast, in respect of a matter in which he is directly a party. Section 287(1) of the Constitution provides as follows:
Section 287(1) of the 1999 Constitution:
“(1) The decisions of the Supreme court shall be enforced in any part of the Federation by all authorities and persons, and by courts with subordinate jurisdiction to that of the supreme Court.”
Without doubt, the President, and indeed, all persons exercising authority in Nigeria, including the Central Bank of Nigeria, are bound to obey and give effect to all decisions of all Courts in Nigeria. It is more so important in this case, because it involves the highest Court in the land. In this case, the President cannot claim to seek to exercise any right of appeal against any decision of the Supreme Court, as that has been outlawed by Section 235 of the Constitution. This is why the broadcast of the President is sad for our democracy; it should not have been made at all, given the implications of the declarations stated therein. The President set himself in confrontation with the Supreme Court, by making a declaration that is contrary to that which had already been made by the Supreme Court. Since he already admitted that the matter is ‘sub judice’, the President should not have proceeded to vary the order of the Supreme Court. No one can pick or choose, which portions of the order of a court he will obey.
By virtue of Section 318 of the Constitution, ‘decision’ of the Court extends to “any determination of that Court and includes judgement, decree, order, conviction, sentence or recommendation”. So, whatever the Court has decided, sitting in its judicial capacity, becomes binding on all persons and authorities in Nigeria. The same Section 318 states that, authority includes government. The oath that was administered on the President is to defend and uphold the Constitution. In this regard, the President and indeed, the executive should not give the impression that citizens can brazenly disregard lawful orders of any court, as that will only encourage anarchy and lawlessness.
The President not only reviewed the order of the Supreme Court, but he actually overruled it, by setting a deadline of April 10, 2023 for the validity of the N200 old notes and declaring the N500 and N1000 notes as expired. No arm of government has the powers to do that which the President has done in his broadcast. And, it portends very grave danger to our democratic experience, where such a bad precedent is set, that the executive arm of government is at liberty to undermine the judiciary at will. The other point is that the President took an oath of office to defend and uphold the Constitution, from which he derives his powers as the head of the executive arm of government. That same Constitution enjoins the President, to obey and give effect to all orders and decisions of the Supreme Court.
Misleading the Public Resulting in Hardship
And, what is the issue at stake really? Nigerians were misled by the President and the CBN, that if they surrendered their old notes to the banks, they will have access to the new notes in exchange, which has not been the case. The CBN cleverly deceived us into giving up our old notes, when it had no plans to print enough new notes to go round.
This has now led to hardship for the people, wherein citizens are forced to sleep at ATM centres and stay in the banks for hours, just to collect their money. It has also affected business transactions and it has impacted upon the economy very negatively, where some workers now stay at home because they cannot access money to transport them from one location to another.
We have experienced protests against the policy of the Federal Government, which has led to the death of many. Surely this cannot be the intention of the President. Section 14(2)(b) of the Constitution, prescribes that the primary purpose of government is the security and welfare of the people. Thus, any policy of the government that leads to suffering, death, hardship and poverty, cannot be in the interest of the welfare of the people. Consequently, the President bears the onus to review the policy in such a way that it will benefit the people, ultimately.
Conclusion
The President must inspire confidence in the institutions of democracy, in particular the Judiciary. Once we get to the stage where citizens are free to decide which portion of the order of any court they will obey, then we are approaching the dangerous bend of a breakdown of law and order. If left unchecked, what the President has done is nothing less than executive rascality, and brazen disregard for and contempt of the Supreme Court.
The President should reverse his directive, and ask the CBN and all financial institutions to obey the subsisting order of the Supreme Court to continue to accept, use and transact business with the old N200, N500 and N1000 notes. It is gratifying that the case is coming up before the Supreme Court on February 22, 2023 when their Lordships will have the golden opportunity to assert their constitutional authority, by reversing the directives contained in the broadcast of the President. Anything short of this will rob that Court of its legitimacy and authority. It will also render all other courts subordinate to the Supreme Court, as mere talk shops whose orders and decisions will no longer be taken seriously by the citizens. Above all, it will leave the common man helpless and vulnerable.
Ebun Adegboruwa, SAN, Human Rights Lawyer, Lagos
Supreme Court, President’s Broadcast and Needless Crisis
Chief J.B. Daudu, SAN
The President’s speech to the nation, cannot in any guise be termed as contemptuous of Supreme Court order said to be in existence on the CBN issue as Adegboruwa, SAN has opined. Every arm of Government must perform its constitutional function, as allocated to it by the Constitution in Sections 4, 5 and 6 of the hallowed document. One arm of Government cannot therefore, prevent another arm from performing it’s sacred constitutional functions.
The President has done his best to douse the tension, by exercising his undoubted executive Presidential powers to salvage a very bad situation which was capable of throwing the nation into complete anarchy. Should the President wait until the 22nd of February, 2023, when the almighty Supreme Court will take arguments from a battery of senior Lawyers, and then rule one way or the other on a matter in which they have hinted that they too are looking for a way to ameliorate the sufferings of the Nigerian masses, which with the greatest respect to the SC, is not one of its functions or duties.
The Judiciary is strictly mandated by Section 6 of the 1999 CFRN as amended, to determine disputes between contending parties. The President’s performance of his own Constitutional functions, has not prevented the court from doing its own work, assuming it has jurisdiction to determine such issue in the first place.
Courts should be vigilant in performing their own duties, and not stray or migrate into attempting to discharge legislative or executive functions. That would be anathema, to the very essence of democracy itself.
Finally, courts must be cautious when exercising jurisdiction and/or making court orders, it ought strictly to confine itself to orders against direct parties to the proceedings before it. Secondly, it must be satisfied that it is in a position to enforce its orders, and thirdly, it must not make orders that will be classified as vain. In this vein, the President enjoys immunity under Section 308 of the Constitution; thus, it would be fruitless to invite the SC to begin contempt proceedings against the President of the FRN.
Chief J.B. Daudu, SAN, former President of the Nigerian Bar Association
Currency Swap/Redesign Policy Of The Federal Government: A Coup De Grace?
Chief Aikhunegbe Anthony Malik, SAN
Background
When on 26th October, 2022, Mr Godwin Emefiele, Governor of Nigeria’s Central Bank announced the Naira redesign policy of the Government/CBN which will affect the N200, N500 and N1000 denominations, it had appeared to many, mostly the uninitiated, as a redeeming silver lining on the nation’s darkening horizon. The banking Czar was on hand to justify the redesigning initiative, hinging same on the need to curb what he described as “the abnormalities bedevilling the Nigerian financial, monetary and security systems.” He had fixed the circulation of the new designs to commence on 15th December, 2022, while the old notes would remain valid for transactions until January 31, 2023. This initial cut-off date was, however, extended to February 10, 2023 on which only the new notes, alongside the other existing unaffected notes, would enjoy exclusive recognition as legal tender in Nigeria.
While the uninitiated have since known better and may have become disillusioned, it however, did not call for any much punditry to decipher that the currency redesign policy, having regard to the unpalatable concomitants, could not have been any shift in paradigm from a well-worn dysfunctional governance pattern pervading virtually every sphere of the nation’s political leadership – from simple sim card registration, NIN registration to voters’ registration, etc.
In what appears to be a covenant among Nigeria’s political leaders against any seamless transitions to better convenience in virtually all transactions in our national life and affairs, only the naïve would have imagined differently, that where a statute expressly provides a method or procedure by which an act can be performed, such procedure or method cannot again be further fraught with any other procedural or methodical impropriety.
Currency Redesign
Currency and related matters such as design, redesign or change, because of the pride of place that money occupies in the national life of any nation of the world, even though described and clothed with a label of executive policy, are defined, regulated and provided for by the Act of the National Assembly. In the case of Nigeria, the applicable statute is the Central Bank of Nigeria Act, 2007. Section 2 of the Act has as its principal objectives, the following functions of the Central bank [only as it relates to the trending issue of currency redesign or remodelling]:
(a) ensure monetary and price stability;
(b) issue legal tender currency in Nigeria;
Sections 18 and 19 of the Act, more elaborately and appositely provide for currency redesign as follows:
Section 18
(1) The Bank shall-
(a) arrange for the printing of currency notes and the minting of coins;
(b) issue, re-issue and exchange currency notes and coins at the Bank’s offices and at such agencies as it may, from time to time, establish or appoint;
(c) arrange for the safe custody of un-issued stocks of currency notes and for the preparation, safe custody and destruction of plates and paper for the printing of currency notes and disc for the minting of coins; and
(d) arrange for the destruction of currency notes and coins withdrawn from circulation under the provisions of section 20 (3) of this Act or otherwise found by the Bank to be unfit for use.
Section 19
(1) The Currency notes and coins issued by the Bank shall be-
(a) in such denominations of the Naira or fractions thereof as shall be approved by the President on the recommendation of the Board; and
(b) of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.
While one cannot reasonably question the exercise of these powers by the Central Bank of Nigeria in relation to the currency swap, it does not, however, beggar value judgement to seek to interrogate the motive(s) of the governing authorities behind the implementation of the policy at such crucial time as this in our national life.
The Central Bank Governor and Mr President, have both canvassed complementary reasons for the implementation of the currency swap policy. While the banking Czar has summed up the reasons in a one line rhetoric of “abnormalities bedevilling the Nigerian financial, monetary and security systems” , the President dilated on same in his address to the nation on 16th February, 2023. He predicated the policy on:
“(a) The need to restore the statutory ability of the CBN to keep firm control over the money in circulation. In 2015 when this administration commenced its first term, Currency-in-Circulation was only N1.4 trillion.
b) The proportion of currency outside banks grew from 78%in 2015 to 85% in 2022. As of October 2022, therefore, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the Banking System while N2.7 trillion remained permanently outside the system; thereby distorting the financial policy and efficient management of inflation;
c) The huge volume of Bank Notes outside the banking system has proven to be practically unavailable for economic activities and by implication, retard the attainment of potential economic growth;
d) Economic growth projections make it imperative for government to aim at expanding financial inclusion in the country, by reducing the number of the unbanked population; and
e) Given the prevailing security situation across the country, which keeps improving, it also becomes compelling for government to deepen its continuing support for security agencies to successfully combat banditry and ransom-taking in Nigeria….”
A dispassionate evaluation of the reasons embodied in the afore-quoted portion of Mr President’s statement, presents a paradox of mixed outcomes. In so far as the current challenges confronting virtually the entire citizenry [save the Emefieles of this world and perhaps, those in Aso rock] are concerned, nothing has put more falsehood to Emefiele’s own summed up reason of “the abnormalities bedevilling the Nigerian financial, monetary and security systems”, than the pervading situation of the near complete collapse of the economy being experienced in the country. One then wonders which other abnormalities on the Nigerian financial, monetary and security systems have been more grievous on the people?
To worsen the situation of Nigerians, even the electronic platform that could have become the last resort for the privileged few collapsed at a point across many banking platforms, a situation that impelled desperate Nigerian citizens into outlawry and has culminated in several banks being vandalised or burnt down. Another paradox of end result to belying Emefiele’s reason of “abnormalities bedevilling the Nigerian…. security systems” and many such other imminent security issues soon to follow if the present situation be left unabated. The judicial intervention by the Apex Court of Nigeria is not spared the same concern as the interim order it handed down, in the wake of the invitation by desperate litigants, appears to have further exposed the court’s flanks to avoidable criticism.
In all of this, one is again left to wonder what the governing authorities of CBN and the Presidency really seek to achieve with the currency swap policy, having regard to the palpable unpreparedness of the Government in the provision of safeguards against the usual sabotage of such Government policies by other interests. Unsurprisingly, the Government appears to have been caught in a guilty posture, bearing in mind the oppositions against the extant currency policy. Strangely, such opposition have even emerged from within the ranks of the ruling party, where some State Governors are in the vanguard of the advocacy for civil disobedience against the policy.
Conclusion
If there is one policy of this Government that is/was most ill-thought out, it is this currency policy. It has scant or no regard for the crucial roles money plays, not only as a medium of exchange, but as a store of value in every modern economy.
Therefore, to whimsically swap or redesign the currency, for whatever interest it is sought to be achieved, and deny thereby the citizenry of the convenience of the fundamental roles of money as a store of value and medium of exchange, clearly defeats whatever fiscal and security objectives sought to be achieved. The end results of the ongoing financial crises, cash crunch, the added fillip to an already spiralling insecurity situation, lawlessness, all but point to a symbol of a bleeding nation on the edge of precipice.
May God Save Nigeria.
Chief Aikhunegbe Anthony Malik, SAN, Constitutional Lawyer, Abuja
Chaos, Violence and Destruction Over Naira Deadline Unhealthy
Dr Monday Onyekachi Ubani
The President’s announcement to the country, is in clear contempt of the Supreme Court’s earlier order restraining the Government from deadlining the old currency notes of 200, 500 and 1000 respectively, until the application on notice before it is heard. He should have allowed the judicial process to run through. His intervention, though well intended as posited by some economists, sends a dangerous signal in our democracy. The international community are watching, seeing how much we mess our system up. It is ill-advised, and no Lawyer worth his salt should make unfounded allegations of bribery as reason to undermine the Judiciary.
The macro and micro economic benefits of this Naira redesign may be altruistic and good for economic growth in the long run, but the poor implementation strategy that has occasioned hardship, has taken the shine off the good intentions. People are suffering in not having access to their money, and the CBN that is the culprit, is being treated with kid gloves. Let us not blame the POS Agents and the Banks, for chaos and confusion in the implementation of the policy. The poor implementation strategy of the CBN, is too glaring for everyone to see.
We are hoping that the 200 old notes will now be made available to the citizens to ease their sufferings.
I need to reiterate that the President erred in law, to have subtly overruled the Supreme court’s express order. It is contemptuous of the Supreme Court Order simplicita. Let us not be carried away, that he grudgingly permitted old N200 notes to continue to be circulated till sometime in April this year. He has breached the Supreme Court Order by that announcement. For me as a Lawyer, it portends grave danger to our legal system.
Eruption of Protests and the Elections
The pockets of violence we are witnessing across the country in some of the States of the Federation, is evidence of frustration that the people are experiencing in accessing their money in the banks. Having returned their old currencies, the new notes are nowhere to be seen. People do not know whether it is the CBN or the commercial banks, that should be held responsible for the confusion. The Apex Bank and the commercial banks, are trading blames on who is responsible for the hardship the people Pare presently experiencing.
The chaos, violence and destruction here and there are not healthy for the polity, especially as we are few days away from the general election. I understand that, INEC is starved of funds for logistics. We are in a big trouble, if we through this ill-implemented policy, destroy the few gains we have made in our electoral journey. Something should be done fast.
The old note of N200 and the new currencies should, as a matter of urgency, be made surplus in the system to stem unrest and the present chaos being experienced all over the country.
Dr Monday Onyekachi Ubani, Chairman of NBA Section on Public Interest and Development Law (SPIDEL)
The Law and Economics of a Currency Mess
Dr Sam Amadi
The current suit of some Governors, challenging the Naira redesign policy at the Supreme Court, has thrown Nigeria into in a currency mess. The suit challenges the decision of the CBN based on Presidential approval, to redesign some denominations of the Naira. The high-points of the mess are three. First, there is a macroeconomic policy aspect of the mess. This involves the authorisation by the President to the Central Bank to redesign the Naira, and end the life of some of the denominations. There is a project management side of the mess. This involves the implementation of the policy by the Central Bank and the commercial banks. The third aspect of the currency mess is judicial management. This relates to how the Judiciary has intervened in the controversy. These three aspects of the mess, need to be clarified for effective resolution. We discuss these aspects in the context of the power of the President, the nature of monetary policy and the required character of judicial review of the policy.
The Extent of Presidential Power in Constitutional Democracy
In constitutional theory, the President holds three key positions. He is the ‘Chief Executive’. In this position he is directly in charge of domestic policy. The President is also ‘the sole organ’. This relates to foreign affairs. The President has the exclusive prerogative to manage Nigeria’s foreign affairs (with the other single instance of legislative approval of treatise to become law). Thirdly, the President is the ‘Commander-in-Chief’. In that position, he manages the Nigerian Armed Forces and has responsibility to mobilise the Armed Forces for the nation’s defence.
The President’s constitutional role as the Chief Executive is captured in Section 5 of the Constitution. This power extends to the “execution and maintenance’ of the Constitution and other laws made designates the President as the Commander-in-Chief of the Armed Force. Item 26 of the Second Schedule to the Constitution, ‘External Affairs’ is exclusively the responsibility of the President as the sole representative of Nigeria in foreign affairs. The exercise of the power of ‘sole organ’ and ‘Commander-in Chief’ is exclusive of the State Governors, whilst the exercise of ‘Chief Executive’ power is in competition with State Governors. No State Governor can act as Commander-in-Chief or Sole Organ in any capacity, but a State Governor can act as Chief Executive as allowed by the Constitution in Section 5(2).
The important point to make with respect to the powers of the President as the personal holder of executive power of the Federation, is that he cannot exercise such power beyond what has been expressly provided for in the Constitution and any other law made by the National Assembly. This accords with the position of the President in the Article 2 of the US Constitution, which Justice Jackson in Youngstown Sheet & Tube Co. v Sawyer (343) U.S. 579 (1952), interpreted to lay down three considerations for exercise of presidential power, to wit, (1) presidential power is greatest when its exercise is authorised by the Constitution or Congress. (2) it is weakest when not based on express provision of the law, and (3) it is illegal when contrary to the law. As Professor Nwabueze argued, this expansive presidential model was adopted instead of the parliamentary model, because of the need for effective administration of the national economy.
The Presidential approval of the Naira redesign, is anchored in a clear authorisation in the CBN Act. Therefore, it deserves the highest level of deference by both the legislature and the judiciary. This contrasts with the case in AG Bendal v AG Federation 1984 1 SC where the Supreme Court rightly nullified the action of the President in signing an appropriation Act, because the President exceeded his powers contrary to the Constitution.
The Character of Monetary Policy and the Degree of Judicial Deference
The controversy before the Supreme Court, is in respect of a monetary policy by the CBN. That policy related to the redesign of the currency which Item 15 of the Exclusive List to Section 4 of the Constitution has assigned to the President of the Federation, to the exclusion of the State Governors. Furthermore, the CBN Act grants the CBN and the President exclusionary powers over currency and other monetary policies. Studies, more recently the one done by Luis Ignacio Jacome and Samuel Pienknagura, in 2022 for The IMF Working Papers, have shown that there is an inverse relationship between the independence of the Central Bank in managing monetary policy and long-term inflation. This finding has influenced macroeconomists to demand for independent central banks. The UK moved into central bank independence after the Thatcherite era. Today, independence of the Central Bank, is now normative in monetary policy.
This independence has two aspects. First, is goal or political independence. This requires the bank to set the goals of macroeconomics, without external political control. The second is instrument or economic independence, which requires the bank to be independent in choice of tools and instruments to implement monetary goals it has set. The CBN Act grants both independences. The CBN is free to set monetary goal and to implement them. In the case of currency design, Section 20(3) just requires the approval of the President. The responsibility to implement, is entirely that of the CBN.
Judicial Management of Monetary Policy
Nothing in the Constitution, in the logics of economics and in administration law, requires that Governors of States should play any role in determining and implementing monetary policies. There are two sides of Naira redesign. The first is the policy itself, that requires the approval of the President. The other is the implementation, which is exclusively in the domain of the CBN. Each of these sides, triggers different judicial approach.
If anyone quarrels with the approval of the policy, it can sue the President either that he did not observe due process as required by law or that he exceeded his powers in Section 5 of the Constitution. Such an action can proceed in the Supreme Court in its original jurisdiction as provided under Section 232, at the suit of any State. Note that, the cause of action of such a suit must be that the President exceeded his constitutional power in approving the monetary policy. In the present circumstances, this will require challenging the constitutionality of the CBN Act, because Presidential approval is unambiguously provided in the Act.
The Governors suit at the Supreme Court, does not challenge the constitutionality of Presidential approval of the policy, rather its implementation. That should proceed against the CBN at the Federal High Court in line with Section 251 of the Constitution, because it is not a matter of a dispute between the State and the Federation on the exercise of constitutional power, but a matter of unreasonable, chaotic and irrational implementation of an approved policy. That is an issue of implementation of a duly approved policy. The dispute contemplated by Section 232, must be such that challenges the extent of the power of the Federation in relation to the States. That is the essence of all the cases rightly decided on Section 232 of the Constitution. A concern that the implementation of the policy is wrongful in any sense is a matter that the Federal High Court should handle, because it does not go to the balance of power between the Federation and Federating States, and does not challenge the constitutionality of the exercise of presidential power.
The final point on judicial management, is that the Supreme Court ought to be less enthusiastic to invalidate a decision made by a regulatory body exercising part of Section 5 power on monetary policy unless the decision is manifestly illegal, unreasonable, or irrational. The Supreme Court should not invalidate such action, merely on the reason that it could have been done differently or more prudentially. Judicial deference should cover even less prudential decisions by the political branch, especially when made by experts who enjoy statutory independence. That is the essence of cases like Chevron v NRDC, 467 U.S. 837 (1984) and Associated Provincial Picture House v. Wednesbury Corporation (1948) 1 K.B. 223.
It is an impermissible exercise of judicial power, to usurp the power of the executive to make and implement policies, even when such policies are incompetent. The cure for incompetence is not a judicial order, but administrative and political action.
Dr Sam Amadi, Law and Economics Scholar; Director of Abuja School of Social and Political Thoughts
Supreme Court Injunction on Deadline of Old Naira Notes, Speculative Impact on Elections
Kede Aihie
On February 8, 2023, the Supreme Court of Nigeria put a temporary injunction against the deadline for the replacement of the old Naira notes as a legal tender. This decision has come as a relief to many Nigerians who have been struggling to replace their old notes, due to the short notice provided by the Central Bank of Nigeria (CBN) and the shortage of the new notes. The CBN had set a deadline of February 10, for the replacement of the old Naira notes with the new ones. The old notes were supposed to be phased out completely, and those who failed to exchange them would no longer be able to use them as legal tender.
However, this decision by the Supreme Court has put a pause on the deadline, and it is now uncertain when or if the CBN will be able to proceed with the replacement of the old notes. This is a welcome development for many Nigerians who have been struggling to exchange their old notes, due to the long queues and limited availability of the new notes.
A new twist was further added by the CBN, stating that old notes are no longer legal tenders. Then President Buhari addressed the nation and instructed the CBN to reintroduce the old N200 notes. Some APC Governors have kicked against this, and are asking citizens to ignore the President’s directives and keep their old notes.
Unbanked Population May Lose Cash Savings
While the temporary injunction on the replacement of the old Naira notes may have come as a relief to some Nigerians, it has also emerged that over 50% of Nigeria’s unbanked population may lose their cash savings. This is due to the CBN’s requirement that old notes could only be exchanged through an existing bank account.
Many Nigerians who do not have bank accounts have been left stranded, as they are unable to exchange their old notes for new ones. This has raised concerns that these individuals may lose their cash savings, as the old notes are phased out completely.
The temporary injunction on the replacement of old Naira notes by the Supreme Court of Nigeria, has brought some relief to Nigerians who have been struggling to exchange their old notes. However, the requirement for existing bank accounts for the exchange of old notes has left over 50% of Nigeria’s unbanked population at risk of losing their cash savings.
On Tuesday, the CBN said old naira notes of N200, N500, N1000 notes are no longer legal tender in the country since Friday, February 10, 2023 despite the Supreme Court order. President Buhari in his national broadcast, instructed the CBN to dispense the old N200 notes, which had ceased to be legal tender. Buhari, to my mind, effectively disobeyed the Supreme Court, which is very unfortunate and sets a bad precedent for future administrations.
The Supreme Court has adjourned hearing of the substantive case to 22 February, just three days before the general elections. In the meantime, seven State Governments (All APC controlled) have sued the Federal Government. Two opposition (PDP controlled) States, have joined the suit on the side of the Federal Government.
I will end on this note, the Supreme Court’s ruling should be obeyed, no matter how unpopular it appears. Most Lawyers, agree on this. Public confidence in some judicial pronouncements of late, especially in political matters, is mixed. A lot of judicial reforms are required, to regain public trust.
Kede Aihie Esq, Publisher of Nigerian Magazine, London, UK
Implications of 2022 Naira Swap Crisis on the Polity and the Elections
Jide Ojo
Introduction
This weekend’s seventh consecutive general elections in this Fourth Republic, has been imperilled by the ongoing Naira Redesign and currency swap crises. Not a few political juggernauts have read political undertones, to what was initially considered a sound economic decision. In the ruling All Progressives Congress, things have fallen apart as some of the Governors of the political party have openly disagreed with the President, Muhammadu Buhari, on the handling or purported mishandling of the policy. Even a serving Minister, Festus Keyamo, SAN has said openly that the President was misadvised by the CBN Governor, Godwin Emefiele. Some APC Governors have dragged the Federal Government to court on this matter, while untold hardship has been visited on the Nigerian populace. There have been protests against the policy in many Nigeria States, lives have been lost and property worth billions of Naira destroyed. In fact, the standard bearer of the ruling party, Asiwaju Bola Ahmed Tinubu, has accused a cabal in the Presidency of hoarding Naira and fuel, in order to make him lose the Presidential race scheduled for this weekend, February 25, 2023. Therefore, should APC lose massively in next Saturday’s elections, the ready alibi is the lingering fuel scarcity and cash crunch.
The current currency crisis, has shown the nexus between economy and politics and vice versa. There is a field of Politics called Political Economy. An online source known known as Cosmologically Insignificant, in analysing Max Weber’s theory of substructure, superstructure and human rights says “Politics and law are parts of the superstructure, which are determined by the substructure. They are formed by the interests of those who have economic power, and they serve to defend these interests”.
Brief History of Currency Redesigning in Nigeria
According to an Associate Professor of History at Obafemi Awolowo University who also hold a doctorate degree in Law, Adetunji Ogunyemi, significance of currency is six-fold, and they are as follows: Legal tender; Store of Value; Means of Exchange; Symbol of national sovereignty; “Supreme Ambassador” of a country’s financial relations, and a pillar of freedom from labour oppression. Ogunyemi while presenting a paper titled “History of Currency Change and Redesigning in Nigeria Before 2023: It’s Merits and Demerits” at a Konrad-Adenauer-Stiftung and National Institute for Legislative and Democratic Studies Training Workshop for the Press Corps of the House of Representatives and Senate on February 6 and 7, 2023, traced the history of the first currency redesigning of the Naira to July 2, 1977 when N1, N5 and N10 were redesigned. The second redesigning took place in 1984 under the incumbent President, when he was military Head of State. The issuance of N50 note by General Ibrahim Babangida in August 1991; the redesigning of N5, N10 and N50 under Professor Chukwuma Soludo as the CBN Governor in February 2007. President Olusegun Obasanjo’s administration introduced high denomination notes as follows: N100 (December 1999), N200 (Year 2000), N500 (2001) and N1000 (2005).
It will be recalled that on Wednesday, October 26, 2022, at a media briefing, the current CBN Governor, Godwin Emefiele, announced the redesigning of some of the banknotes. He hinged the Apex Bank’s decision, on the powers conferred on it by Section 2(b) of the CBN Act 2007. According to Emefiele, currency management by CBN has faced a number of challenges, for some time now. These include: Significant hoarding of banknotes by members of the public, with statistics showing that over 85% of currency in circulation are outside the vaults of commercial banks. At the end of September 2022, available data at the CBN indicated that N2.73tn out of the N3.23tn currency in circulation, was outside the vaults of Commercial Banks across the country; and supposedly held by the public. This, to my own mind, is indicative that Nigerians have not fully accepted the cashless policy of the Central Bank.
Other challenges are: Worsening shortage of clean and fit banknotes, with attendant negative perception of the CBN and increased risk to financial stability; Increasing ease and risk of counterfeiting, evidenced by several security reports. Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, our existing series of the Naira has not been redesigned in the last 20 years.
CBN believes that the redesign of the currency will help deepen our drive to entrench cashless economy, as it will be complemented by increased minting of our eNaira. This will further rein in the currency outside the banking system into the banking system, thereby making monetary policy more efficacious. Also, in view of the prevailing level of security situation in the country, the CBN is convinced that the incidents of terrorism and kidnapping would be minimised, as access to the large volume of money outside the banking system used as source of funds for ransom payments will begin to dry up.
Ab initio, citizens were asked to bring in their old naira notes from October to December 15, 2022 when they will start getting the new Naira notes of N200, N500 and N1000. There was no mention of a withdrawal limit at this point. Nigerians were told that the new currencies will be printed by the Nigerian Printing and Minting Company, better known as Mint. President Buhari proudly said Nigeria is one of the four countries in Africa, that prints her own currency. The currency swap was initially meant to end by January 31, 2023. Unfortunately, things haven’t gone as planned. The new Naira notes were not available as at December 2022. It was not until mid-January 2023 that many Nigerians were able to sight the new currencies. However, there was acute shortage of the new banknotes.. Unfortunately, about three days to the end of January 31, 2023, many business owners stopped collecting old naira notes from their customers. I personally experienced this rejection of the old notes on January 27 and 28, 2023, when I couldn’t spend the old notes with me. Mercifully, on Sunday, Janaury 29, 2023, the CBN Governor after meeting with President Buhari, announced the extension of the lifespan of the old notes to February 10, 2023.
Litigation Over the Currency Swap
In the course of the time, the APC Governors Forum sent representatives to the President, to appeal to him to prevail on the CBN to allow the old notes to circulate concurrently with the new ones till the end of the year or at least six months. The President himself called for a meeting of the Council of State which met on Friday, February 3, 2023. The National Council of State (NCS) tasked the CBN to make the new Naira notes available, or recirculate the old Naira notes to ease the current suffering of Nigerians. The Governments of Kogi, Kaduna and Zamfara also headed to the Supreme Court, and got an interim order to stay the deadline for circulation of the old Naira notes.
As at Wednesday, February 15, 2023, nine States joined as parties in the suit filed by Kaduna, Kogi and Zamfara challenging the Naira swap deadline. This is as the Governors, Nasir El-Rufai and Yahaya Bello of Kaduna and Kogi respectively, attended the court proceedings. The Justice John Okoro-led seven-member panel (Amina Augie, Muhammad Lawal Garba, Adamu Jauro, Ibrahim Saulawa, Tijanni Abubakar, and Emmanuel Agim) joined the Attorneys-General of Katsina, Cross River, Lagos, Ondo, Ogun, Ekiti and Sokoto States as co-Plaintiffs. The Attorneys-General of Edo and Bayelsa State, were joined as co-Respondents. The case has been adjourned for hearing on February 22, 2023.
Meanwhile, the Socio-Economic Rights and Accountability Project has filed a lawsuit against the President, over “the unlawful directive banning the use of old N500 and N1,000 banknotes, contrary to the interim injunction granted by the Supreme Court that the old N200, N500, and N1000 notes remain legal tender.” Joined in the suit as Defendants are the AGF, Abubakar Malami, SAN, and the CBN.
Impact of Naira Scarcity
Majorly affected by the cash crunch are micro and small enterprises whose owners do not have bank accounts, and as such, cannot not receive online money transfer. Many of such businesses have been recording low sales, or fold up outrightly. In fact, many POS Operators have ceased to operate, as they could not access cash for their potential customers. Lawyers and litigants in the Federal Capital Territory, Abuja, have expressed frustration over their inability to file court proceedings as a result of the scarcity of new Naira notes. The News Agency of Nigeria interviewed some Lawyers on Sunday, and gathered that the Lawyers in Abuja were worried as the situation is affecting their legal practice.
President Buhari’s Appraisal of the Policy
In his national broadcast on February 16, 2023, President Buhari noted that “Notwithstanding the initial setbacks experienced, the evaluation and feedback mechanism set up has revealed that gains have emerged from the policy initiative. I have been reliably informed that since the commencement of this program, about N2.1 trillion out of the banknotes previously held outside the banking system, have been successfully retrieved. This represents about 80% of such funds. The President further noted that, “this new monetary policy has also contributed immensely to the minimisation of the influence of money in politics. This is a positive departure from the past, and represents a bold legacy step by this administration towards laying a strong foundation for free and fair elections.” He thereafter, gave approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 notes cease to be legal tender.
Implication on the Forthcoming 2023 Elections
On Tuesday, February 7, 2023, Chairman of INEC, Professor Mahmood Yakubu, met with Godwin Emefiele, over the new Naira policy, at the CBN headquarters in Abuja. In his courtesy visit to the CBN, Yakubu expressed concern about the policy, and how it might affect the 2023 general elections if not managed. He said some of the service providers, especially transporters, are required to be paid in cash, and besides, experience has shown that emergency situations do arise on election day, which could demand the use of cash by the Commission. He, therefore, requested concessions regarding the Naira redesign policy, with specific reference to the limitations placed on cash withdrawals. Responding, the CBN Governor assured INEC, as well as Nigerians, that the Apex Bank won’t do anything inimical to the successful conduct of the polls, giving assurance that the Apex Bank will provide INEC needed Naira notes as required.
Views of Kano and Kaduna State Governors
Governors Abdulahi Ganduje and Nasir El-Rufai have openly disagreed with the President on this issue, and believed it is politically motivated to prevent Asiwaju Bola Ahmed Tinubu from winning the next presidential election.
Conclusion
Professor Ogunyemi in the earlier referenced paper believes that “The current currency redesigning, though well-intentioned, but the administration and management of the process has produced dire, unintended consequences for the system, and untold hardship for the citizens, It could have been better handled, through careful planning and appropriate timing”.
I totally agree with this scholar’s submission, that the currency redesign and Naira swap was a right thing being done at the right time, and it may hurt APC at the 2023 elections.
Jide Ojo, Development Consultant, Author, and Public Affairs Analyst
