Federal Government Stands Firm on February 10th Naira Swap Implementation, Seeks Dismissal of States’ Legal Challenge

The doubts surrounding the Central Bank of Nigeria’s (CBN) naira redesign policy persist, as the Supreme Court overturned a previous injunction from a high court in the Federal Capital Territory (FCT) yesterday. The injunction had barred the Federal Government and the CBN from disregarding the February 10 deadline for the current currency exchange.

The recent ruling by the Supreme Court seemed to have eased the scarcity of cash in the country, however, the Federal Government approached the court last night, requesting it to dismiss a lawsuit challenging the February 10 deadline set by the Central Bank of Nigeria (CBN) to end the legal tender status of the old currency notes of N200, N500, and N1,000. The Federal Government argued that the Supreme Court does not have jurisdiction to hear the case, which was filed by three northern states (Kaduna, Kogi, and Zamfara) controlled by the ruling All Progressives Congress (APC).

The Federal Government maintained that the case is not a dispute between the federation and the state governments, but rather a matter related to CBN’s policy. As such, it argued that the lawsuit should not have been brought directly to the Supreme Court for resolution, but rather to the Federal High Court.

The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, sued as the sole defendant on behalf of the Federal Government and filed his objections to the lawsuit as a preliminary matter at the Supreme Court on Wednesday night.

The three state governments, in their application challenging the naira redesign policy, requested an order preventing the CBN from ending the use of the old notes on February 10, citing the difficulties that the scarcity of the new notes has caused for many Nigerians.

Yesterday, after hearing the argument of the applicant’s lawyer, a seven-member panel of the Supreme Court led by John Okoro issued an interim injunction, halting the Central Bank of Nigeria’s (CBN) plan to end the use of the old banknotes on February 10 as scheduled. The hearing of the main case was then adjourned until February 15.

Following the court ruling, President Muhammadu Buhari held a meeting with the CBN Governor, Godwin Emefiele, and the Attorney-General of the Federation, Abubakar Malami, at the Presidential Villa in Abuja. The outcome of the meeting was not known at the time of publication, apart from the AGF’s request for the Supreme Court to dismiss the lawsuit brought by the three northern states (Kaduna, Kogi, and Zamfara).

The International Monetary Fund (IMF) called for an extension of the February 10 deadline for the cash exchange, citing the hardships being faced by Nigerians. In a statement by its Resident Representative to Nigeria, Ari Aisen, the IMF encouraged the CBN to consider extending the deadline if problems persist in the lead-up to February 10.

The IMF is the first international financial organization to publicly call for an extension of the deadline for depositing old naira notes. The governor of Kaduna State, Nasir el-Rufai, urged Nigerians to continue using the old denominations of the redesigned notes, saying that the APC presidential candidate, Asiwaju Bola Tinubu, would reverse the decision if elected on February 25.

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