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National Tribune

Flagging The Conscience Of Truth

Governors Take Steps to Postpone Supreme Court’s Currency Swap Reversal Until After the Election.

ByWeb Manager

Feb 13, 2023

To slow down the Supreme Court’s decision on the case brought against the Central Bank of Nigeria (CBN) by Kaduna, Kogi, and Zamfara states over its plan to phase out the use of old N200, N500, and N1,000 banknotes, some governors have decided to join the lawsuit.

The states of Ondo, Kano, and Ekiti have already joined the suit, and Rivers state has announced its intention to do so as well. According to sources at the Federal Ministry of Justice who spoke with THISDAY, the ministry had not yet received a certified copy of the Supreme Court’s ruling on the currency issue as of Friday’s close of business.

The sources emphasized that the governors joining the Supreme Court suit aimed to delay the judgment and keep the old currency in circulation until after the election.

A source, who wished to remain anonymous, stated, “The governors behind the multiple joinder suits aim to delay the judgment and maintain the use of the old currency while attempting to sway Supreme Court justices to prevent a ruling and push the decision past the presidential election. They want to use the cash for the election. Thus, they are adding more joinder suits to prolong the outcome of the judgment, allowing both currencies to coexist. This is a fight back by those looking to buy votes.”

This information was released as the governors of the 36 states held a meeting in Abuja over the weekend and resolved to direct their Attorneys General to review the case and consolidate the legal reliefs sought by the states. The governors also called on the federal government and the CBN to respect the rule of law and cease the currency restrictions, which they deemed responsible for an economic crisis.

The assertions were made by the Nigeria Governors Forum (NGF) in a communiqué signed by its chairman, Rt. Hon. Aminu Tambuwal, at the end of a meeting of the forum. On February 8, the Supreme Court suspended the CBN’s February 10 deadline for discontinuing the use of old currency notes. The CBN had ordered citizens to exchange the old N1,000, N500, and N200 banknotes for a new design by the deadline. However, the Supreme Court, in response to an ex parte application by Zamfara, Kogi, and Kaduna states, prevented the CBN from banning the old notes until the hearing and determination of the case, which has been scheduled for February 15. The ban on the old banknotes has caused cash shortages, protests, and bank attacks in some areas. Additionally, on yesterday, the Ekiti State Government applied to join the case against the federal government at the Supreme Court regarding the CBN’s currency redesign.

Despite this, the central bank told the Federal High Court in Akure that extending the expiration date for the old naira notes would harm the fight against fraud, corruption, and criminal activities in the country. As the 2023 presidential election approaches on February 25, the Catholic Bishops Conference of Nigeria (CBCN) has called on Nigerians to resist vote-buying. The 36 state governors implored the federal government and the CBN to consider the voice of reason expressed by Nigerians, the Council of State, and other stakeholders before the economy becomes irreparable for the next administration. The state chief executives accused the apex bank of implementing a currency confiscation program, rather than the currency exchange policy outlined in Section 20 (3) of the CBN Act, 2007.

The Nigeria Governors Forum (NGF), in a communiqué issued at the end of a meeting, expressed sympathy and support for Nigerians who are facing difficulties under the Central Bank of Nigeria’s (CBN) current currency redesign policy and cash withdrawal restrictions. The governors made a distinction between the CBN’s redesign policy and the goal of going cashless, pointing out that the former is a currency confiscation program and not the currency exchange policy intended under Section 20 (3) of the CBN Act, 2007. The communique explained that currency confiscation means that the amount of liquidity provided to the public is inadequate due to restrictions on the amount that can be withdrawn. The governors’ forum expressed concerns about the lack of respect for the civil liberties and rights of Nigerians and their freedom to use their legitimately earned income as they wish.

The communique further read, “The NGF believes that the best way to promote a cashless economy and encourage digital transactions is to offer a range of incentives to customers, not through the harsh measures seen in recent months. The CBN’s claim that the reason for this policy is the rapid increase in currency in circulation is not supported by its own data. According to the CBN, currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022, but the bank failed to consider factors such as the growth of the country’s nominal GDP, the doubling of consumer prices, rising population, and the impact of huge advances from the Central Bank of Nigeria to the federal government during this time.

“It can be concluded that either the CBN data is incomplete, or that Nigerians have done exceptionally well in their transition to a cashless economy. The substantial informal sector in the country also suggests that the CBN significantly underestimated the actual cash needs of the economy.”

According to the governors, the inability to use the new notes has had far-reaching consequences, including a black market for the naira, soaring food prices, variable commodity prices based on the method of exchange, long lines at ATMs and bank branches as individuals scramble to access a fraction of their money in new notes, and more. The governors warned that the country is at risk of a CBN-induced recession.

The communique stated, “Therefore, we call on the federal government and the CBN to respect the rule of law and heed the concerns expressed by Nigerians and various stakeholders, including the Council of State before the damage to the economy becomes too severe for the next administration to fix. The NGF members agreed to instruct their Attorneys General to review the case at the Supreme Court with a view to consolidating the legal remedies sought by the states.”

Ekiti State Joins Supreme Court Suit Against Retirement of Old Banknotes

Ekiti State government has applied to join as a co-plaintiff in a lawsuit against the federal government at the Supreme Court over the CBN’s deadline for phasing out old N200, N500, and N1,000 banknotes. The application for joinder was filed last Friday by Ekiti State Attorney General and Commissioner for Justice, Mr. Dayo Apata, seeking three reliefs. The lawsuit, with the case number SC/CV/162/2023, has Attorneys General from Kaduna State, Kogi State, and Zamfara State as plaintiffs and the Attorney General of the Federation as the defendant.

The application was based on the grounds that the directive of the federal government had caused a shortage in the supply of naira notes in the state and had a negative impact on the livelihoods and financial well-being of the citizens of Ekiti State, including the state government’s revenue, levies, and taxes. The directive also created palpable anxiety among the citizens of Ekiti State.

Ekiti State, as a federating state of Nigeria, argued that it has a common interest with the other plaintiffs in the outcome of the suit and thus, sought the leave of the court to join as a co-plaintiff in order to be bound by the outcome of the suit. The state government also claimed that there would be no injustice or embarrassment to any of the parties on record if Ekiti State were to join as a co-plaintiff to represent its grievances.

The sole issue for determination was whether Ekiti State had made a compelling case for the court to consider its application. The argument was supported by the court’s past position that anyone whose presence is crucial to a suit must be made a party to the proceedings, as stated in the cases of Green v Green, Peenok Inv. Ltd v Hotel Presidential, and LSBPC v Purification Tech (Nig) Ltd.

The Central Bank of Nigeria (CBN) has told the Federal High Court in Akure that extending the expiry date for the old Naira notes would harm the efforts to combat corruption and fraud. In a counter-affidavit filed in response to a suit by the Social Rehabilitation Grace and Supportive Initiative (SRG), the CBN defended its refusal to extend the expiry date and explained that it is necessary to protect Nigeria’s democracy.

The Social Rehabilitation Grace and Supportive Initiative, led by Nigeria-born US doctor, Dr. Marindoti Oludare, along with Omoyele Ishola, had brought the suit before the court, asking it to force the CBN to extend the expiry date by six months. The applicants were seeking an extension to the February 10 deadline set by the CBN for the expiration of the old Naira notes. However, the Supreme Court recently ruled that the CBN cannot enforce the deadline until a hearing of a suit filed by three states, which is scheduled for Wednesday.

In response to the suit, the CBN’s counsel, Oyetola Atoyebi, argued in the counter-affidavit that the plaintiffs had no valid reason for filing the suit and called for it to be dismissed. Atoyebi argued that extending the expiry date for the old Naira notes of N200, N500, and N1000 would create opportunities for vote-buying and compromise the upcoming election. He also stated that extending the timeline would harm the fight against fraud, corruption, and other criminal activities committed with the use of the old currency.

The CBN cited the rising kidnapping crime in the country as a reason for not extending the deadline and argued that a change in currency notes could help put an end to it. In reference to the currency change in India in 2016, the CBN stated that India’s citizens strictly adhered to the timeline, leading to a positive impact on the Indian economy.

The applicants were seeking an interim injunction to prevent the CBN from enforcing the February 10 deadline and an order compelling the CBN to extend the submission of the old Naira notes by a minimum of six months before they lose their legal tender value. The applicants argued that the CBN did not give adequate notice to the public and failed to print enough new N200, N500, and N1000 notes to ensure efficient supply and circulation. They added that the scarcity of the new notes had caused hardship for the applicants and the general public.

In a 26-paragraph Supporting Affidavit by Omoyele Ishola, the third applicant, he stated that the CBN did not have the power to prescribe a deadline for submitting the old Naira notes and failed to provide a means for Nigerians abroad to exchange their old notes. He added that the CBN’s failure to make the new notes available had caused hardship for the applicants and many Nigerians both at home and abroad. The deponent also stated that the CBN had not acted in accordance with the provisions of the CBN Act of 2007.

The first applicant, Dr. Marindoti Oludare, stated that when he visited Nigeria from the US on December 29, 2022, he withdrew old Naira notes from a First Bank of Nigeria ATM and returned to the US with the old notes. He added that the CBN did not have the power to prescribe a deadline for submitting the old Naira notes and failed to provide a means for Nigerians abroad to exchange their old notes.

The Second Applicant group faced difficulties in making preparations for their upcoming inauguration on February 11, 2023, due to long ATM lines and limited access to cash for withdrawals. The former administration of President Goodluck Jonathan had redesigned the N20 and N50 notes, causing both old and new notes to be legal tender for two years before the old notes became obsolete. As a result, the group sought relief from the court in the form of an interim injunction to prevent enforcement of the February 10th deadline for old N200, N500, and N1000 notes, or to extend the submission deadline by at least six months. In the alternative, they asked for an interim injunction to prevent the setting of a deadline that goes against the Central Bank of Nigeria Act.

The Catholic Bishops Conference of Nigeria (CBCN) urged Nigerians to resist vote-buying and called on the Independent National Electoral Commission (INEC) to ensure a transparent election process. CBCN President, Archbishop Ugorji, delivered a Pastoral Letter condemning vote-buying as an attempt to silence the poor and vulnerable while making it harder for good but poor candidates to win elections. He called on Nigerians to vote according to their conscience and convictions. The President of the Christian Association of Nigeria (CAN) also provided guidelines for Christians to choose a presidential candidate based on character, capacity, and competence, and trained 1200 observers to monitor the 2023 elections.

Meanwhile, Kano State Governor, Dr. Abdullahi Gandjue, shut down Wellcare supermarket for refusing to accept old naira notes, contrary to the state government’s instructions. The chairman of the State Consumer Protection Council, Dr. Baffa Babba Dan Agundi, warned other marketers in Kano to accept the old notes or face legal action. Wellcare Alliance Limited sent an apology letter to Ganduje, explaining that their staff had given incorrect instructions about the new notes due to confusion about the state’s policy on the old notes.

Credit: THISDAY

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