New Telegraph

November 29, 2023

CBN, Naira swap, Supreme Court and unending debacle

The controversy concerning the naira redesign and the attendant suffering generated has been of major concern to Nigerians. In this piece, ADEYINKA ADENIJI gauged the feelings of the people, stating why the government should do more to ease their pain and discomfort caused by the development

The three highest denominations of the old naira note in the country, the N1000, N500 and the N200 can now safely be described as ‘controversial’. Without fear of being charged as disrespectful to a principal paraphernalia of sovereignty, the truth is that the naira has in the recent past been a subject for discussion and m commodity much sought for by the generality of the people, some of whom have had to face the most degrading kind of humiliation due to their inability to access the nation’s means of exchange.

This follows the effect of the Central Bank of Nigeria (CBN), policy of introducing currency remodeling and swapping policy, which had sadly relegated the naira to quasi-money. The policy led to a situation where the naira was being traded on the streets just like other currencies being sold at black markets and at black market rates.

An ugly situation that is synonymous with spitting in the face of the sacredness of a Legal Tender; a symbol of sovereignty of any nation, not under war. There has been public outcry suggesting that the judiciary may be failing in serving as “the last hope of the common man.” According to feelers from among those who know and are close to government hierarchies, a possible cause of the embarrassing scenario is the undue exposure of policymakers to Politics. Particularly in a volatile polity and in an electioneering period.

The policy

The CBN governor, Godwin Emefiele, had said the banknotes were redesigned due to a request from the federal government. He disclosed that the new notes would begin circulation from 15 December 2022, while the old banknotes would remain legal tender and circulate together until 31 January 2023. President Muhammadu Buhari however later directed the Central Bank of Nigeria (CBN) to release old N200 notes into circulation to co-exist with new N200, N500 and N1,000 banknotes for 60 days. He, however, said old N500 and N1,000 banknotes are no longer legal tender in Nigeria, apologising to Nigerians over the difficulty experienced in the implementation of the naira redesign policy. However, even as he acknowledged the difficulties Nigerians were passing through as a result of the new policy, the President lamented that the currency in circulation grew from N1.4 trillion in 2015 when he assumed office to N3.23 trillion at the end of 2022, noting that N2.1 trillion of the cash in circulation have been retrieved since the launch of the naira redesign policy of the Federal Government on October 26, 2022. After much anxiety from the people, the Supreme Court on March 3, 2023 waded waded into the controversial redesign issue by ruling the President out of order on the naira redesign policy The Kaduna, Kogi and Zamfara state governments had sued the Federal Government over the naira redesign policy and were joined on February 15 by Cross River, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states and later, Nasarawa, Niger, Kano, Jigawa, Rivers and Abia states The Justice John Okoro-led seven member panel had given an interim order on February 8 that the old and new banknotes should continue to circulate until the determination of the suit brought before it. In his national broadcast on February 16, 2023, 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. However, their lordships disagreed with the President on this naira redesign policy. In their judgment the seven-member panel unanimously decided that Buhari breached the constitution in the manner he issued directives for the redesigning of the naira. On the disobedience of the Supreme Court’s earlier order on the new notes, Justice Agim said Buhari’s broadcast of February 16, 2023 that only the N200 note should remain legal tender made the country’s democracy look like a mere pretension. The court also dismissed the preliminary objections by the Attorney-General of the Federation, Abubakar Malami, as well as those of Bayelsa and Edo states, and stated that it had jurisdiction to entertain the suit. Justice Agim held that the President failed to consult the National Council of States, the Federal Executive Council and the National Economic Council before directing the CBN to introduce new naira notes. It further directed that the new and the old notes should co-exist till the end of 2023.

Experts view

In a chat with New Telegraph, a retired banker turned politician who prefers not to be mentioned, concluded that “such is the outcome of the breach of the doctrine of neutrality” on the part of certain critical public officeholders”. This, according to him, has made both the “swap policy and the ensuing crisis unmanageable,” adding that the emergency is made “worse because the bone of contention is such that it requires insulation from prejudices.” The former commissioner in one of the Southwestern states concluded that the “tim and manner of implementation raised sentiments against the lofty policy,” which he posited is pivotal to the attainment of the all-important Financial Inclusion. To the dismay of informed minds, fears nursed by Nigerians, days after the Supreme Court nullified the Federal Government’s naira remodeling and swapping policy remain palpable. According to popular outcries in the news space, those who got the old notes from the bank are finding them difficult to spend on the street. Going down memory lane as touching on issues around the controversial monetary policy: Consequent upon public outcry for an extension of the deadline of the demobilisation of the old currencies, which raged concurrently with public scepticism and queries as to the sincerity of the policy in the first place, the Federal Government through the apex bank had announced a further extension till February 17th, a 10-day deferment from the earlier scheduled 10th of February. Expectedly, this brought some modicum of mental solace the way of economically pressed masses, albeit without any improvement in the supply of cash. As a result, panic grew among the populace, as masses of people who had kept faith in the pronouncement of the apex Court soon began to experience difficulty in the banking system. It wasn’t surprising, however, to see enraged bank customers begin to stage protests as some of them went haywire in venting their frustration. The scarcity of newly redesigned currency notes, coupled with a near-collapsing commercial banking sector turned the cashneeding masses into games in the hands of POS operators, who charged a bizarre rate of between 35 to 40% for withdrawal of cash. This caused increase in the costs of doing business. Nigerians were made to pay for every payment they had to make. It also increased the cost of daily needs, as Nigerians seemed to have suspended all their lofty dreams for the year 2023, and thus reclined to subsistence lifestyles, whereby they only seek enough cash to take care of feeding themselves and other immediate needs. Economic sabotage among the trading masses, especially non-cash policy compliant petty traders, who insist on cash payment from customers, only for onward illicit sales of the notes to POS operators at a premium, who in turn transfers the cost to the common man, became the order of the day.

Emergence of overnight POS points

Curiously, many cash-based traders like those who sell beverages and sausages, motor park ticket sellers, and transporters acquired POS terminals and set up kiosks where they sell naira. An operator around Agege under bridge, who pleaded anonymity for security reasons, said she had not been opening her kiosk due to the scarcity of new notes. “I have old notes, but no one is collecting them. I don’t have anybody to sell for me, since money is still scarce.” She however revealed that those who have cash of N200 and N100 notes to sell are those who either have other businesses where they sell in cash, or have someone who does. While reiterating her preference for anonymity, the middle aged single mother revealed that the kiosk beside hers is owned by the wife of a transport management official. “That’s her husband,” she said, pointing to a chubby man in his forties who appeared to be issuing orders to some of the park wardens. Following their experience after an earlier judgement in the same manner, which was, in turn, nullified by the President in a nationwide live broadcast; the latest and final nullification of the policy regardless, the majority of the masses are once again thrown into a renewed thrashing under the sledgehammer of the CBN’s indifference to the ruling. This has caused great losses in domestic incomes with attendant dwindling effects on national productivity. Regrettably, confused Nigerians are now looking in the direction of Mr. President for what was described as an “unholy approval” and ridicule of the reputation of the legal system. Unavoidably, the generality of distraught Nigerian business people, including traders, transporters, and artisans, whose daily transactions are mostly cash-based are now crossed between the presumed infallibility of the Supreme Court and what has been described as ‘FG’s penchant for flouting of court orders’. While some decry the situation whereby the judiciary is equated to one of the MDAs (Ministries, Department, and Agencies), those who are legally minded have faulted the ground on which the apex Court assumed jurisdiction in the matter instituted by some state governments In an article published by national dailies in February, Dr. Sam Amadi, Director – Center for Public Policy & Research, Abuja, titled: “The Supreme Court erred in the naira redesign case”, started by stating that; “Several issues arise from this order. First, is the jurisdiction of the Supreme Court to entertain the suit of the three northern states against the Central Bank of Nigeria.” The notable Public analyst faulted how the appellant’s governors approached the Court, describing the same as “duplicitous” and a ploy “to evade proper jurisdiction.

Experts fault Supreme Court’s interference

While averring that the Supreme Court reserves the right to assume jurisdiction over matters between States and the FG, Amadi equally posited that the proper judicial route was for the appellants to sue the Central Bank and retail money banks directly, since, according to him, “they are the real focus of the suit”. Therefore going by Amadi’s remarks as touching on the principle of jurisprudence, moreover, if found as a sufficient legal ground on which the FG and the CBN may lawfully continue to stand in the way of the Supreme Court verdict, and which undoubtedly remains about the only ponderable alibi, one can then be safe to say that the end to the continued socioeconomic crushing of Nigerians is far from sight. Also, multitudes of citizens who now lay in agony for a ‘presidential body language’, may be realistically excused of the blame for the “fallacy” of considering the President as the “all in all” who can turn the hands of the clock dimmed fit. It is nevertheless constructive to note that as hypothetical as their wishes may sound, keen observers have unanimously opined that the lack of that which is desired by the ‘multitude of citizens, no matter how irrational or uncivilised it may be, has had impacts on the elusive stability in the economy. The judgement of the apex court, which brought back the old notes fell short of attracting the deserved esteem, in form of an expected nationwide instantaneous compliance, especially when the content of the pronouncement was anticipated to bring relief. Dr. Amadi concluded that “the interim order implies that the court nullified in the interim the policy of the CBN and has granted the plaintiff the relief they want, albeit for a short period.” He implied that the ex parte injunction may have “granted the appellants relief in disguise”. A scenario he painted not far from the usurpation of the duties of a lower Court – with a dimension to exclusivity and first preference. The CBN governor in response to the judgement had insisted there was no need for a shift in the deadline. This generated heated debates and the public space was polarised between those who spoke for and or against the policy. It also sparked panic as commercial banks rejected cash deposits of the controversial bank notes.


Saddening is also the truism that the seemingly irreconcilable fiscal saga is now like the proverbial bout of two fighting elephants and the generality of the masses who suffer adverse impacts of cash crunch may be described as the unfortunate grasses… It also raised questions as to the value of nullifying a policy of the CBN, when the Godwin Emefiele-led Bank of last resort does not take positive action to put out more cash to ensure that the ‘stay action’ order achieves its purported aim of averting what the Matawale/El Rufai group of appellant governors described as “looking anarchy”. It also interrogates the presumed infallibility of justice, as represented by Jurist Okoro. However, as bickering continues in the public space as to the aptness of having to wait on President Muhammadu Buhari for approval of a supposed sacred order of the Supreme Court, the people continue to groan under difficulties encountered even as they seem to have switched to “survival mode”. Adebukola Adeoye sells soup at Agege. Due to the scarcity of banknotes created by implementation issues around the swapping policy, most of her customers are willing to pay with a bank transfer. She has had little or no problems in this situation, however, having voluntarily limited herself to sourcing her stocks only from cashless policycompliant suppliers, whose prices she says are higher, when compared to buying directly from rural-dwelling growers of vegetables and foodstuffs, has become an issue. “If my suppliers would accept old notes, why won’t I accept them.” She queried hypothetically, averting her preference for general acceptability of the once-banned N1000, N500, and N200 notes. For many reasons, which include, but not limited to low literacy level, low internet penetration, the underbanked nature of the Nigerian financial system, nationwide poverty which places electronic gadgets beyond the reach of the common man, and shallow internet penetration have severally contributed to the seamless transformation into a digital economy. As the scarcity of bank notes persists and helpless citizens are still at the mercy of anyone who can supply them with ‘raw cash’ of new naira note, Adebukola grew concerned about falling sales. The policy inconsistency between the Federal Government and the CBN is affecting her business. The latest court announcement ought to ease her stress, but the dangers of bad judicial precedent continue to hurt her efforts. When Emefiele, insisted on the demobilisation of the old notes contrary to February 8th interim injunction, which directed maintenance of the status quo ante on the CBN policy and adjourned final judgement to the 15th of February, 2023, commercial banks stopped accepting old notes and tension engulfed parts of the country. Sadly, traders who relied on the interim injunction were caught up in the frenzy of uncertainty occasioned by CBN’s contradiction of the court order; thereby regretting their invested trust in the judiciary. The date fixed for substantive judgement on the matter no longer mattered to Nigerians. Sadly, they thought whatever comes out from there may be upturned and the tide turned against them once again. The Supreme Court seems like a toothless dog. It is one thing to pronounce, it’s another for such pronunciation to be effective. This was informed by the erosion of public confidence caused by the earlier disregard of the Supreme Court pronouncement by the Federal Government through the apex Bank. The contemptuous option of the CBN wore off public faith in the powers of the Judiciary, including the Supreme Court – the highest in the land. Some of the most vulnerable to the crunching effect of the policy believe it would take enforcement of relevant laws to achieve the needed stability (For instance, the CBN Act 2007 prohibits the sale and rejection of the Naira notes.) The blame game shaped almost every public discussion. While the generality of the masses who have been impoverished by the cash crunch heap much of the blame on the CBN, who they say have mopped up almost N2 trillion in the old N1000, N500, and N200 notes from circulation, for not expediting action in reintroducing the currencies in compliance with the SC verdict. Others appear at a loss amidst what has been described as FG’s ‘penchant for disregard for court judgments. Disillusioned, they lay an ambush, on the lookout for a ‘presidential body language’, without which, in their belief, hardship occasioned by the cash crunch may tarry unnecessarily. Adebukola says she was ready to collect the old notes, but they seem not to be in circulation. Sales are still at their low ebb. Observation around Lagos metropolis reveals widespread reservation and doubts as to the efficacy of the final judgement on the 3rd of March, 2023. Not even a press statement by the CBN governor, to the effect that the public can now continue to spend old the old N1000, N500, and N200 notes alongside the new ones could allay their fears. The people obviously needed massive sensitization to ‘re-tune’ what have become bastardised emotions towards the sanctity of legal decisions as binding on all, irrespective of status. Mrs. Bolarinwa, a textile dealer around the railway corridor at Agege said “the people need to be convinced beyond reasonable doubt that what happened before will not happen again.” Even when she was reminded of the supremacy of the Supreme Court, overall including the Presidency, she remained pessimistic. A presidential address appears to be the only way to convince her, like others close to her shop inside the market, that they wouldn’t be burning their fingers again, following the verdict of the SC Speaking further, Bolarinwa directed her message to the reporter, help us tell them, (referring to the government) “After all, the President addressed the nation on January 8th, when the Court pronounced that which was contemplated,” he should find something to do about this one too,” she concluded. Pastor Adejumo, a retiree who now sells goods at Sari, Iganmu, Ajeromi Ifelodun, Local Government Area Lagos, insisted that “market women without formal education may not be blamed” for the seeming stalemate despite, a Supreme Court pronouncement. Others who spoke are not far in thought; enforcement of extant laws, mass sensitization, and proper monitoring of the banking system to checkmate the activities of criminal naira racketeers are some of the ways to go. Mrs. Dunni Olajide sells clothing items in Offa, Kwara State. She also operates a POS withdrawal and deposit service. According to her, many people are pessimistic because of their last experience, maintaining that they can’t be blamed. The mother of two, however, expects the government to embark on massive sensitization on the latest development. “It’s not too much if each local government authority can embark on market-to-market sensitisation drive,” she said adding that the negative impacts of CBN’s contempt of the earlier Court injunction in the matter is beyond just a press statement from the apex Bank. The people need to hear something from somewhere before they will re-embrace the latest judgement, it once burnt them, she said.

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