The Supreme court of Nigeria has no legal jurisdiction to preside over matters regarding the Central Bank of Nigeria (CBN). The Federal High Court does.
February 10th (Friday) was the CBN’s final deadline for Nigerians to swap old banknotes for new ones. But a contention between the apex bank and the Supreme Court- the highest court in Nigeria- has lingered after the latter passed a ruling to stall the deadline. The court ruled that CBN should postpone the deadline to enable people ease of transaction. But the apex bank did not move.
This tussle between the court and the bank followed a lawsuit by the Kaduna State, Kogi State and Zamfara State Governors, who argued that the policy was undermining the welfare of Nigerians. Even the International Monetary Fund (IMF) had called on the CBN to extend the deadline.
But the CBN has argued that the Supreme Court lacks jurisdiction to hear the suit levelled against it as the dispute concerns its monetary policy and is not a case between the federation and the state governments. More so, the Federal Government (FG) insisted on the deadline.
“It is true that Supreme Court has original jurisdiction to hear matters between two or more States or between a State and the Federal Government (FG), or between the National Assembly and FG. But this matter is between some states and the CBN. The Supreme Court has no original jurisdiction to hear the subject matter of the suit,” said the Head of Legal to a leading commercial bank in Nigeria who spoke with Ventures Africa anonymously. “The issue is not a dispute with state governments. Rather, it bothers a CBN policy. And that should be within the jurisdiction of the Federal High Court.”
The new monetary policy came to be for multiple reasons. Top on the list is to prevent vote-buying in the upcoming elections. By February 25th, Nigeria will be conducting its 8th Presidential elections since the commencement of its 4th republic. It is common knowledge for party representatives to offer money to voters at polling units to buy their votes. Thus the CBN attempts to save Nigeria’s democracy by reducing the amount of money in circulation while encouraging free and fair presidential elections.
Again, the monetary policy was introduced to prevent counterfeits, corruption, and terrorist funding. If other things were equal, it would have helped the country transition smoothly into a cashless economy- stabilise and strengthen the Nigerian economy. Needless to say, the cash-swap policy is a great idea but it would have been better if the government had introduced it earlier in 2022 to enable old notes to phase out gradually without hurting the populace.
After the new banknotes were printed and introduced in October last year, the CBN had advised Nigerians to swap their old notes for the new ones. But the new banknotes were rare to find, making it difficult for people to exchange old notes. So, many, especially those in rural communities, could not access new notes from banks. Some people along the border communities of the country now trade in CFA Franc, the legal tender of neighbouring Francophone countries.
These multiple problems made the government move the initial deadline of January 31st to February 10th. Still, there are clamours for another extension. If the CBN succumbs to mounting pressures and moves the deadline again, life would be relatively easy for more Nigerians. However, vote-buying would be prevalent in the coming elections and the whole purpose of the new banknotes and the cash swap policy would be defeated by at least 50%.