Despite the Supreme Court’s interim order, barring the Central Bank of Nigeria (CBN) from implementing its February 10 deadline for the phasing out of old N200, N500 and N1,000 notes, the apex bank has announced that the old notes are no longer legal tender.
The development was disclosed on Monday by Haladu Idris Andaza, CBN’s branch controller in Bauchi, amid rising concern about the status of the old notes following the expiration of the deadline and the continuous scarcity of the new naira notes.
“For the avoidance of doubt, we wish to state categorically that CBN is ready and is open to receive all of those old notes based on certain conditions and criteria. Customers are free to come to the bank and deposit which they cannot do at the commercial banks anymore because the currency has ceased to be a legal tender since the 10th of this month,” Andaza said.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Earlier, the CBN governor Godwin Emefiele announced a 7-day window that follows the February 10 deadline, opened to allow people to deposit the old notes in their possession in central banks across the country.
Andaza said individuals and institutions with old banknotes can deposit them with branches of the apex bank across 36 states of the country.
“The management of the CBN decided that those customers will have a sigh of relief by coming to the offices of the CBN in all the 36 states in the federation including FCT to deposit their money. The customer has to go to the CBN portal and fill a form in the portal, there will be a form there concerning this currency redesign and exchange,” he added.
Governors of three northern states; Kogi, Kaduna and Zamfara, had earlier this month dragged the federal government to the Supreme Court, asking it to compel the CBN to rescind its policy on the new naira notes by allowing them to co-exist with the old notes. The three states cited the negative impact of the policy on the economy and the resulting suffering it has brought upon Nigerians.
In its ruling, the Supreme Court ordered the federal government to suspend the implementation of the February 10 deadline until the determination of the case on February 15. But the apex court’s jurisdiction to entertain the case has been called to question. In the federal government’s response to the lawsuit, the Attorney General of the Federation and the Minister of Justice, Abubakar Malami, said the singular fact that the CBN was not joined as a party in the suit robbed the apex court of necessary jurisdiction. He added that the federal government will be challenging the jurisdiction of the Supreme Court to handle the case on Wednesday.
Although Malami assured that the federal government will obey the order of the apex court in compliance with the rule of law, several reports indicate that the old notes are now being rejected by both commercial banks and the general public. It was gathered that the Lagos Island and Ikeja High Court registries turned down lawyers and litigants who attempted to make payments with the old notes, insisting that they pay only with the new naira notes.
According to reports, the registries began to reject the old notes because deposit money banks; namely FCMB, Polaris, UBA, and Fidelity, had refused to collect the old notes they had received from lawyers and litigants earlier.
The Supreme Court order was seen as a reprieve as scarcity of the new naira notes made the implementation of the naira redesign policy chaotic. It is not clear what will be the outcome of the three states’ lawsuit on Wednesday. But from what is currently playing out, further order from the Supreme Court against the naira swap policy will likely not be obeyed by the CBN.
In addition to the apex court’s questionable jurisdiction to handle matters relating to the naira redesign policy, economic experts have warned that using the courts to thwart policies of the central bank undermines its independence and sends the wrong signal to foreign investors.