HomeBusiness and EconomyGovernors ask Supreme Court to halt CBN’s naira swap deadline

    Governors ask Supreme Court to halt CBN’s naira swap deadline


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    By Eric Ikhilae, Bisi Olaniyi, Fanen Ihyongo, and Ernest Nwokolo,

    •Kaduna, Kogi, Zamfara states sue Federal Government
    •Four political parties get High Court injunction to block extension
    •EFCC arrests bank official with N29m new notes

    The raging storm over the naira redesign and scarcity has moved to the courtrooms.

    Three states – Kaduna, Kogi and Zamfara – have urged the Supreme Court to suspend the policy immediately.

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    They said it was doing more harm to the economy and livelihoods than envisaged.

    Just as the governors were filing their case, a High Court of the Federal Capital Territory (FCT) issued an interim injunction stopping the Federal Government from extending the February 10 deadline for the phaseout of the old naira notes.

    The court ruled on an application by four political parties – Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM).

    Outside the courts, Kano State Governor Abdullahi Ganduje accused Central Bank of Nigeria (CBN) Governor Godwin Emeifiele of punishing Nigerians after failing to secure the presidential ticket of the All Progressives Congress (APC).

    The governor spoke a day after former APC National Chairman Adams Oshiomhole accused Emefiele of plotting to scuttle this month’s elections.

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    The former Edo governor was of the opinion that the CBN governor wanted to discredit the party.

    Nigerians have been groaning amid the scarcity of old and new notes.

    There were long queues in banking halls and Automatic Teller Machines (ATMs) as the cash crunch bit harder yesterday.

    The banks, through their spokesman, had denied hoarding the cash. But, the situation got worse yesterday as many ATMs remained empty and banks turned weary customers away.

    Governors Dapo Abiodun (Ogun) and Godwin Obaseki (Edo) met with bank chiefs in their states in a bid to find a solution.

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    Also yesterday, the Economic and Financial Crimes Commission (EFCC) arrested a bank manager in Abuja for hoarding N29 million worth of new naira notes.

    The agency said: “An operations manager of a leading commercial bank in Abuja Central Area was on Monday arrested by operatives for refusing to load the ATMs, despite having N29 million of the redesigned naira notes in the branch’s vaults.”

    The states’ prayers

    Kaduna, Kogi and Zamfara are praying the Supreme Court to order the immediate suspension of the demonetisation policy until it complies with the relevant provisions of the law.

    The states filed a joint suit through their Attorneys-General.

    The states, in an originating summons filed on February 3 by a team of lawyers, led by Abdulhakeem Mustapha (SAN), raised four questions for the court’s determination.

    In the suit marked SC/CV/162/2023, they prayed the apex court to make the following declarations:

    · That the demonetisation policy being currently carried out by the CBN under the directive of the President is not in compliance with the extant provisions of the Constitution, CBN Act 2007 and extant laws on the subject.

    · That the three-month notice given by the Federal Government through the CBN, under the directive of the President, the expiration of which will render the old banknotes inadmissible as legal tender, is in gross violation of the provisions of Section 20(3) of the CBN Act 2007 which specifies that reasonable notice must be given before such a policy.

    · That in view of the express provisions of Section 20(3) of the CBN Act, the Federal Government, through the CBN, has no powers to issue a timeline for the acceptance and redeeming of banknotes issued by the Bank, except as limited by Section 22(1) of the CBN Act 2007, and the Central Bank shall at all times redeem its bank notes.

    The three states filed along with the originating summons, a motion for an injunction.

    They seek to restrain the Federal Government and its agents, including the CBN, and commercial banks, among others, “from suspending or determining or ending on the 10th of February 2023 the timeframe within which the now older versions of the 200, 500 and 1000 denominations of the naira may no longer be legal tender pending the hearing and determination of the substantive suit.”

    The states stated their grounds, saying: “Since the announcement of the new naira note policy, there has been an acute shortage in the supply of the new naira notes in Kaduna, Kogi and Zamfara states.

    “Citizens who have dutifully deposited their old naira notes have increasingly found it difficult and sometimes next to impossible to access new naira notes in order to go about their daily activities.

    “This inadequacy of the notice coupled with the haphazard, cack-handed manner the exercise is being carried out and the attendant hardship same is wreaking on Nigerians (and this includes citizens of Kaduna, Kogi and Zamfara States of Nigeria) has been well acknowledged even by the Federal Government of Nigeria itself.

    “The Naira (whether old or new) is scarce.”

    The plaintiffs also filed a motion for abridgement of time to five days from the date of service within which the defendant, the Attorney General of the Federation (AGF), could file a response to the suit.

    In their supporting affidavit, the states added: “Contrary to the requirement for the naira redesign policy to be implemented within a reasonable time frame, the Federal Government of Nigeria has embarked on the policy within an unreasonable and unworkable time frame.

    “This has adversely affected Nigerian citizens within Kaduna, Kogi and Zamfara states as well as their governments, especially as the newly redesigned naira notes are simply not available for use by the people as well as the state governments.

    “Government activities and services requiring the use of cash have been adversely affected on account of the massive cash shortage, thus making it difficult for the government to effectively operate.

    “People in the plaintiff states (Kaduna, Kogi and Zamfara) have been deprived of their right to access their hard-earned money from their bank accounts having deposited their old naira notes with the banks.

    “The people cannot access funds to purchase basic necessities such as food, transportation, health care, etc.

    “As for the majority of the indigenes of the plaintiffs’ states who reside in the rural areas, they have been unable to exchange or deposit their old naira notes as there are no banks in the rural areas where the majority of the population of the states actually reside.

    “The majority of people in rural areas of the Plaintiffs’ states do not have bank accounts and have so far been unable to deposit their life savings which are still in the old naira notes.

    “Economic activities in the plaintiffs’ states have grounded to a halt as people in the various states have no money to trade with and this is adversely affecting the states’ revenue as taxes that would accrue to the states on account of the various economic activities in the states are no longer forthcoming.

    “There is restiveness amongst the people in the various states on account of the hardship being suffered by the people and the situation will sooner than later degenerate into the breakdown of law and order.

    “Critical stakeholders have had reasons to communicate their concerns to the Federal Government on account of the challenges and hardship being experienced by Nigerians as a result of the naira exchange policy.

    “The Nigerian Bar Association via a letter dated 23rd January 2023, addressed to the Governor of the Central Bank of Nigeria, has expressed its concerns regarding the implementation of the said policy.

    “The plaintiff state governments cannot stand by as they are duty-bound to protect citizens in their states and prevent the breakdown of law and order in the states.

    “There is no justifiable basis for the ongoing difficulty and suffering being meted out on the governments and good people of Kaduna, Kogi and Zamfara states by the Federal Government.

    “If sufficient and reasonable time had been given by the Federal Government of Nigeria for the naira redesign policy, all the current hardship and loss being experienced by the plaintiffs’ state governments as well as people in the various states would have been avoided.

    “Owing to the hardship occasioned by the short and unreasonable notice by the Federal Government on the implementation of the naira redesign policy, the Senate of the Federal Republic of Nigeria whilst inter alia acknowledging the shortage of the new naira notes, had reason to pass a resolution for extension of the time frame for implementation of the policy until the 31st of July, 2023.

    “On account of the hardship being experienced by Nigerians as a result of the short length of the notice for the implementation of the new naira redesign policy by the Federal Government, the Federal Government through the CBN on the 29th of January 2023, announced a 10-day extension of the implementation period, to last until the 10th of February 2023.

    “By the further extension, the old naira notes would lose their legal tender status by 10th February 2023, while a further seven-day grace period was purportedly given as the deadline for the deposit of the old naira notes.

    “The 10-day extension by the Federal Government is still insufficient to address the challenges bedevilling the policy.

    “The Federal Government cannot bar Nigerians from redeeming their old naira notes at any point in time, despite the fact that the old notes are no longer legal tender.

    “Unless this honourable court intervenes, the governments and people of Kaduna, Kogi and Zamfara states will continue to go through a lot of hardship and would ultimately suffer great loss as a result of the insufficient and unreasonable time within which the Federal Government is embarking on the ongoing currency redesign policy.”

    Court to Fed Govt: No deadline extension

    Ruling on the application by the four political parties, Justice Eneojo Eneche restrained President Mohammadu Buhari, the CBN, Emefiele and 27 commercial banks “from suspending, stopping, extending or interfering with the currency redesign terminal date of February 10th or issuing any directive contrary to the February 10 date.”

    He gave the interim order in a ruling on a motion M/4284/2023 filed in a suit numbered FCT/HC/CV/2234/2023.

    Justice Eneche, according to the enrolled order sighted by our correspondent, held, among others: “An interim order of mandatory injunction is hereby made directing and mandating the defendants, whether by themselves, staff, agents, officers, interfacing banks or financial institutions or however described to comply with, implement and give effect to the currency re-design and restricting of the old of N200, N500, N1000 bank notes on or before the fast dote of 10th day of February 2023, pending the hearing and determination of the motion on notice;

    “An order of interim injunction is hereby made restraining the defendants whether by themselves, staff agents, officers, interfacing banks or whosoever not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500 and N1000 bank notes being 10th day of February 2023 or in any other manner howsoever issue any other contrary or inconsistent directive ever the subject matter beyond the last date of 10th day of February 2023, pending the hearing and determination of the motion on notice.

    “An order is hereby made directing the heads, Chief Executive Officers, Managing Directors and/or alter egos of the 4th to 30th defendants (the commercial banks) to forthwith show cause as to why they shall not be arrested and prosecuted for the economic and financial sabotage of the Federal Republic of Nigeria by their illegal act of hoarding, withholding, not paying or disbursing the new N200, N500 and N1000 bank notes, being the legal tender of the Federal Republic of Nigeria to their respective customers, despite supplies of such currency.”

    The plaintiffs, in a supporting affidavit, claimed that politicians who ostensibly are in possession of illicit funds are the ones who want the policies suspended.

    The judge said the orders are to last for seven days in the first instance, and adjourned till February 14 for a hearing of the motion on notice.

    Ganduje takes on Emefiele

    Ganduje believes the close-to-election timing of the naira swap policy was done by Emeifiele to get back at Nigerians for failing to secure APC presidential ticket.

    Speaking at a campaign rally in Tsanyawa, he alleged that the CBN governor was out to sabotage the success of the ruling party’s presidential candidate, Asiwaju Bola Tinubu.

    At the palaces of the district heads of Kunchi and Tsanyawa local governments, the governor urged community leaders to create awareness within their jurisdictions to “let people know that the hardship people facing is singlehandedly caused by the CBN governor, to purposely cause confusion in our democratic process.”

    Ganduje added: “The CBN governor is only doing this to cause confusion in the forthcoming elections for not just reason.

    “He has not been in good mood for long, because he failed to secure a presidential ticket on the platform of our great party, the APC.

    “Currency redesign is done across the globe, but not in the way we are witnessing in our country. The timing is wrong, and the deadline given is very wrong and deliberate.”

    The governor said the Kano government and APC in the state were against the CBN governor’s action.

    He said his administration would invite bank managers to explain why there growing scarcity of banknotes.

    “We will summon bank managers very soon to interrogate them on the shortage of new naira notes in banks.

    “They should come over and explain to us, why our people are still suffering over this issue of naira swap. And I will go to them individually to supervise what is happening and why,” he said.

    Ganduje said palliatives would be distributed to cushion the effects of the naira scarcity.

    “We have planned to start distributing palliatives very soon across all the 44 local governments areas to cushion the effects of the hardship caused by the CBN governor to our people,” the governor said. (TheNation)

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