Despite Supreme Court’s Ruling, Old Naira Notes Lose Legitimacy

The old N200, N500 and N1000 have lost their legitimacy in the eyes of the public such that even courts are rejecting them.

Specifically, lawyers and litigants were on Morday prevented from filing court processes at the Lagos High Court, as officials insisted they would only accept new naira notes.

Consequently, many lawyers and litigants were turned back by court officials at the registry, saying the banks no longer accept the old N200, N500 and N1000 notes as legal tender.

The currency rejections happened as a member of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), Professor Mike Obadan, on Monday, alleged that the naira redesign policy was becoming chaotic due to resistance from some powerful Nigerians opposing it for personal interests.
At the Lagos High Court, some accounts officers at the registry, who spoke on condition of anonymity, told THISDAY that their attempts to deposit old notes they had earlier collected into the government account were rejected by Polaris Bank. He advised lawyers who did not have new naira notes to take advantage of e-Filing, which he said could be done from the comfort of their chambers, homes or anywhere.
The officials further said the only currency acceptable for filing of court processes in the Lagos Judiciary Registry was the new naira notes recently introduced by the CBN.
A lawyer at the Lagos High Court, who did not want his name mentioned, said he was at the court registry at Osborne Division, Ikoyi, to file processes, but was turned back because he had only old naira notes.

The Supreme Court had in a ruling on February 8 suspended the CBN’s February 10 deadline to stop the use of old currency notes. The bank had ordered citizens to swap out old N1, 000, N500, and N200 banknotes for a redesigned currency by the deadline. But the apex court, ruling in an ex parte application by three states – Zamfara, Kogi and Kaduna – stopped the CBN from banning the old notes pending the hearing and determination of the case. It fixed February 15 for hearing. The move to ban the old banknotes had caused confusion among bank customers.
A seven-member panel of the court, led by John Okoro, gave the order of interim injunction.

The order, according to Okoro, who read the lead ruling, was to subsist pending the hearing and determination of the motion on notice filed by the states for interlocutory injunction.
Speaking on a panel on the state-owned Nigerian Television Authority (NTA), Obadan, a professor of economics, noted that the apex bank was not ill-prepared for the currency redesign exercise, but some unscrupulous persons were sabotaging the process.

The presidential candidate of All Progressives Congress (APC), Bola Tinubu, recently alleged that the policy was targeted at him, while several governors in his party have approached the Supreme Court to halt the process as well as allow the new and old notes to circulate together.
But Obadan wondered why the new naira notes appeared to be scarcer the more the CBN pumped new notes into circulation, saying “it seems that snakes are swallowing it.”

He added, “I would like to say that the challenges that Nigerians have seen and the kind of pain people are experiencing is not due to the fact that the central bank is ill-prepared or was not prepared for the implementation. This is not because I am connected in a way to the Central Bank of Nigeria.
“If you observe the situation, right from the beginning of implementation, you will find that there had been resistance to the implementation of the policy. There are vested interests that right from day one did not want the policy to be implemented because they perceived that implementation of the policy would hurt their own private interests.
“And so they have been at war with the central bank, sort of, doing everything to thwart the implementation of the policy. The Central Bank of Nigeria has been pushing out new Naira notes, invariably every week. I don’t know how many times it does that to banks…for onward disbursement to various individuals, enterprises and so on.

“Unfortunately, the more the new notes are given out by the central bank, the more you hear cries that there are shortages and of the central bank not pushing out enough new Naira notes as the monetary authority.”

According to the MPC member, the CBN has the record of all the notes pushed out in recent days and, therefore, would not deliberately ensure that there are shortages within the system.

He stated, “The central bank knows the quantity of new notes that it expects to be in circulation in line with its set of objectives. And it’s been working in line with the objectives. They know the notes pushed into circulation. But the new notes appeared to be swallowed by snakes, or something else that tend to make the notes generally unavailable.”

He explained that the expectation was that as the new notes were pushed out by the central bank, they would go into circulation and economic agents and actors would use the notes and spread them.

“But you will find that most of the new naira notes are not in circulation,” Obadan said. “They are being hoarded for a purpose, for certain vested interests because more and more notes are being pushed into circulation every week,” he stressed.
Besides, Obadan argued that many Nigerians were already getting used to online payment platforms, which should ease the physical use of the local currency, reason why there should be no serious shortage of the new naira notes in circulation.

“So, it’s not that the central bank had a fault at the beginning in respect of implementation,” he noted.

However, he admitted that, perhaps, the central bank could have pushed out the lower denominations, which are less amenable to the counterfeiters.

He said, “the central bank is not an enemy of the Nigerian people. It is working in line with its mandate and taking actions and implementing them in line with what will enable them to accomplish the mandate, bearing the Nigerian people in mind.
“Ultimately monetary and price stability, which are the primary objective affect the Nigerian people. So, my point is that let us not continue to blame the central bank’s implementation, otherwise, how would it have been implemented?
“Initially, the central bank allowed over the counter withdrawals of the new naira notes and that was very strongly abused. And then the bank changed gear to Automated Teller Machines (ATMs) and the findings now show that even the commercial banks have not been helpful in implementing the policy of withdrawal through the ATMs. So the blame must be put at the doorstep of those who need to be blamed.”

Give Order on Recirculation of Old Naira Notes, Groups Urge Buhari
The Youth Awake Now (YAN) and the National Youth Council of Nigeria (NYCN) have urged President Muhammadu Buhari to prevail on the CBN governor, Mr. Godwin Emefiele, to reissue the old notes in large quantity in order to cushion the effects of naira scarcity in the country.

The groups also urged the federal government to order the Nigerian National Petroleum Company Limited (NNPCL) to immediately clear the bottlenecks around petroleum supply chains.
Representatives of the groups, who spoke in Lagos, included the Yoruba Youth Leader, Eric Oluwole; Yoruba Youth Alliance, Lekan Wilki; Yoruba Youth Community Policing, Abiodun Rosanwo; Yoruba Afenifere Youths, Adewale Adeyemo; and Congress of Yoruba Youths, Yinka Adedugbe.
They stressed the urgent need for normalisation of all petroleum supply chains through which petroleum products that constituted the life blood of all economic activities of the peoples got to the consumers.
YAN expressed optimism that if the twin problems of scarcity of fuel and physical cash would be addressed, normalcy would return speedily to the Nigerian economy, while government would have succeeded in averting any threat to the successful conduct of the February 25 presidential election and all the other scheduled elections.
They stated, “Ahead of the 2023 general election, the youth leaders in the South-west are getting concerned about the building momentum, lingering crisis over the biting scarcity of the new naira notes and fuel. The bottled-up anger and the threat of violence being unleashed over the frustrations being experienced, the youths cannot continue with this hardship in our region.

“We feel saddened by the prevailing conditions in which Nigerians generally in recent weeks have been forced to eke a living, compelled to do so by the artificially induced scarcity of physical cash due to the hasty and untidy implementation of the currency design, currency swap and cashless policies by the CBN as approved by the federal government.

“These conditions are aggravated by the worsening fuel scarcity across the country, with its adverse consequences, which literally have grounded the socio-economic activities of our people, making living in Nigeria now difficult and almost unbearable.”

The groups that added that the youths had consistently been at the receiving end of policies made by various administrations in the country. They lamented that the youths had repeatedly been denied opportunities to explore their youthful potential for their own advancement and to the overall benefit of the society.

Emmanuel Addeh in Abuja, Wale Igbintade and Segun James in Lagos