NAIRA SCARCITY: 10 States To File Contempt Charges Against FG, CBN

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Ten states are set for a fresh legal battle with the Federal Government and the Central Bank of Nigeria (CBN) following the non-compliance of the Federal Government and the apex bank with the March 3rd judgment of the Supreme Court on the extension of the validity of the old naira notes.

The non-implementation of the court order has heightened anger and frustration across the land as Nigerians wait endlessly for government to give the green light for the resumption of the use of the old N500 and N1000 notes.

At press time, traders, filling stations and transporters still refused to accept the notes while the new notes remained scarce.

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The governments of Kaduna, Kogi, Zamfara, Ondo, Ekiti, Katsina, Ogun, Cross River, Lagos and Sokoto states yesterday served the Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN) the enrolled order of the Supreme Court on the extension of the validity of the old N200, N500 and N1,000 to December 31st, 2023.

By the service, the order became automatically applicable to all agencies of the Federal Government, including the Central Bank of Nigeria (CBN).

Malami and CBN Governor Godwin Emefiele risk being committed for contempt of the court if by Monday, they refuse to comply with the order of the apex court.

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The 10 states have activated the machinery to file contempt charges against Malami and Emefiele if they defy the order of the Supreme Court.

The delay in releasing the Certified True Copy (CTC) seems to have encouraged the banks to adopt different attitudes to the judgment of the apex court.

Some of the banks have been giving the old notes to customers but the banks insist that customers go through the strenuous process stipulated by the CBN for the old notes to be banked.

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It was gathered that the enrolled order, dated March 3rd, 2023, was served on AGF Malami yesterday.

One of the counsel in the matter said: “We have finally served the Attorney-General of the Federation the enrolled order of the Supreme Court.

“What we did on Friday was to fulfill all righteousness by serving the enrolled order on the AGF. The Federal Government has been evasive by claiming that it had not received the Certified True Copy (CTC) of the judgment, which we have obtained and made available to it. The burden is on Malami to act as the Chief Law Officer of the Federation to comply with the order.

“There is no hiding place for the government; there is no excuse again. While we are waiting for the government’s decision, the law provides us backing for Plan B.”

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The enrolled order of the Supreme Court, which was sighted by The Nation, reads as follows: “It is ordered that this suit has merit. That the demonetization directive/policy by the President of the Federation to wit: withdrawal of the old 200, 500, and 1000 naira notes is not consistent with the provision of the Constitution of the Federal Republic of Nigeria 1999 (as amended) which makes provision for the Executive power of the President of the Federation and the extant laws on the subject matter.

“That the three months’ notice given for the implementation and completion of the said demonetization policy by which time the old N1,000, N500 and N200 naira notes shall cease to be legal tender does not satisfy the condition set out in Section 20(3) of the CBN Act 2007.

“That the President cannot unilaterally give a directive to embark on the demonetization policy pursuant to Section 20(3) of the CBN Act 2007 in view of Nigeria’s Fiscal Federalism, the economic interest of the Constituents of the Federation and without consultation with, and advice from the plaintiff, individually, and in their capacity as members of the National Council of States and National Economic Council and that the directive cannot be given without consultation with, and advice from the cabinet, the National Security Council and other stakeholders.

“That in issuing the directive for demonetization policy pursuant to Section 20(3) of the CBN Act, 2007 on behalf of the Federation of Nigeria, the President is under an obligation to ensure that adequate structures are put in place for the plaintiffs and Nigerian citizens prior to the implementation of the said directive.

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“That the demonetization directive/policy by the President of the Federation to wit: withdrawal of the old N200, N500 and N1, 000 notes unlawfully impede the exercise of the Executive Powers of the plaintiffs’ states and other obligations to facilitate and protect the welfare of the citizens of the said states pursuant to Section 5(2) and other provisions of the Constitution of the Federal Republic of Nigeria 1999(as amended) as well as other extant laws.

“That the directive given by the President pursuant to Section 20(3) of the CBN Act 2007 limiting the amount that can be withdrawn and the charges therein without an enabling law is unconstitutional and not binding on the plaintiffs.

“That the directive of the President of the President of the Federation exercised is illegal to the extent that it restricts, without an enabling law, the rights of the plaintiffs to freely use their money in various bank accounts.

“That the old version of N200, N500 and N1,000 notes shall continue to be legal tender alongside with the new or redesigned version until 31st December, 2023.

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“That the reception of old N200, N500 and N1,000 notes and the swapping of same with new Naira notes shall continue till 31st December, 2023.

“That all the consolidated suits listed in pp. 12-13 of the judgment shall abide this judgment.”

The Supreme Court declared that Buhari cannot implement the demonetization policy pursuant to Section 20(3) of the CBN Act 2007 without consultation with, and advice from the cabinet, the National Security Council and other stakeholders.

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It also said Buhari’s directive limiting the amount that can be withdrawn and the charges therein without an enabling law was unconstitutional.

One of the lawyers to the plaintiffs, said: “The truth is that the order of the apex court is binding on the CBN and Emefiele because the CBN Governor acts as an agent of the bank and the CBN is also an agent of the Federal Government. In this case, the Federal Government was represented by the Attorney-General of the Federation.

“We are set for the next stage of the battle. We will initiate contempt proceedings against the AGF and the CBN Governor if the judgment is ignored. Our team is ready to see to the logical conclusion of this case.”

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In its unanimous judgment, a seven-member panel of the apex court, led by Justice John Okoro, said the procedure adopted by government in effecting its cashless/naira swap policy was wrong.

Justice Emmanuel Agim, in the lead judgment, held that condition precedent was not met before President Muhammadu Buhari directed the Central Bank (CBN) governor to distribute the new notes and withdraw the old ones.

According to him, the directive by President Buhari to the CBN governor to distribute new notes and withdraw old one was invalid because no reasonable notice was given to Nigerians as required under Section 20 (3) of the CBN Act.

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He noted that rather than issuing a formal or public notice, what the CBN governor did was to simply give a press statement, which he equated to the required three-month notice under Section 20(3) the CBN Act.

He said the press statement did not qualify as a reasonable notice envisaged under the CBN Act.

The justice added that Federal Government’s reliance on the said press release as the notice of plan to distribute new naira notes and withdrawal of the old ones showed its disregard for the importance of giving reasonable notice as a valid foundation for the introduction of new naira notes and withdrawal of old ones.

Malami’s spokesman, Dr. Umar Gwandu, had told The Nation last weekend that “the functions of the office of Attorney General do not include monetary policy regulation.”

He had been contacted to respond to the silence of the federal government on the court order.

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The CBN silence is however causing confusion in the banking industry with some of the commercial banks giving out the old naira notes while others seem not to be interested at all.

However customers who accept the old notes are stuck with them.

Traders, artisans and cab drivers are rejecting the old notes in favour of the new ones or Point of Sale (PoS) payments.

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