Ten days after the Supreme Court of Nigeria declared that the N200, N500, and N1,000 notes would continue to be recognised as payment until December 31, 2023, the Central Bank of Nigeria (CBN) has reaffirmed the court’s decision.
Unambiguously stating that the previous year’s policy on the redesign of the currency was unfair and that Nigerians had not received an adequate warning, the ruling issued last week made this point. Long lineups formed in front of Nigeria’s most prestigious banks all week despite the Supreme Court’s forceful ruling, which included a partial reprimand of President Muhammadu Buhari.
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Why the initial ruling of the Supreme Court was ignored
The Central Bank and the Federal Government’s silence on the court judgment was the primary contributor to the widespread sense of unpredictability. There was no indication that the court order would be obeyed, and leading banks refused to receive or issue the old notes in spite of the order. According to a report, a bank employee was quoted as saying the following: “The banks cannot act on the Supreme Court ruling because the Central Bank, an independent body, controls us. The Central Bank has not directed us to align with the Supreme Court’s decision, so business will continue as usual.”
The Central Bank confirmed that it would comply with the court’s decision and extend the validity of the old notes until December 31, 2023 while simultaneously putting the new notes into circulation. This decision was made in light of the fact that the court had previously ruled that the old notes were invalid. However, this statement was made after the Federal Government had previously given the impression that it did not comprehend why the Federal Government and the Attorney General had chosen to disobey the ruling of the court. In the midst of everything that was going on, state governments started the week by releasing statements to the media encouraging people to accept the old notes and spend them.
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The opinions of some leaders over the confirmation of CBN
Chukwuma Soludo, the current governor of Anambra state and a former governor of the Central Bank of Nigeria, revealed on Monday morning, March 13th, 2023, that the CBN had made the decision to comply with the order issued by the court. At the time of his tweet, the CBN had not yet issued a statement regarding the verdict. Nevertheless, Soludo tweeted the following to the people of Anambra: “Residents of Anambra are therefore advised to freely accept and transact their businesses with the old currency notes (N200; N500; and N1,000) as well as the new notes. Residents should report any bank that refuses to accept deposits of the old notes.”
Residents are urged to report any financial institution that is unwilling to accept deposits of obsolete currency. The governor of Lagos state, Babajide Sanwo-Olu, sent out a tweet saying, “Kindly note that commercial banks have been directed to accept the old N500 and N1,000 notes as deposits and pay them out for withdrawals.”
The Central Bank of Nigeria (CBN) issued a statement seven days after the tweets from state governors, 17 of whom had initially filed a lawsuit against the Federal Government in court regarding the Naira redesign policy. In one section of it, it stated, “Accordingly, the CBN met with the Bankers’ Committee and has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023. Consequently, all concerned are directed to conform accordingly.”
The Central Bank of Nigeria’s (CBN) acknowledgement of the court judgment and its directive to banks to honor the old notes will likely be a relief to many Nigerians. There is optimism that it will bring an end to the lengthy bank lines that customers have stood in for the past eight weeks.