By Femi Falana
In 1984, the Buhari military junta changed the colour of the Naira. In a country of 81 million people, bank customers and other citizens were given only two weeks to deposit old notes and replace them with new ones. The maximum amount that was allowed to be withdrawn at the material time was N5,000. The poor implementation of the policy destroyed businesrs and caused untold hardships including loss of lives in many parts of the country. The policy was not challenged because the country was under military jackboot.
Having not studied the poor implementation of the currency policy of 1984, Mr. Godwin Emefiele, had on October 26, 2022, announced the decision of the Central Bank to redesign, produce and circulate new series of the N200, N500, and N1, 000 denominations. Mr. Emefiele had said that the move would help to manage money supply, tackle currency counterfeiting and terrorism, among others. The CBN gave a period of about 100 days for bank customers in a country of 223 million people to deposit the old Naira notes and collect the redesigned notes.
The poor implementation of the policy has unleashed untold hardship on the masses of Nigeria by the unprecedented scarcity of the Naira, fuel scarcity and skyrocketing rise in fuel prices. The Fuel and currency scarcity is inexplicable and unacceptable. Sporadic peaceful protests have erupted throughout the country expressing the deep displeasure of the masses. Thus, the Federal Government has shirked its obligation to guarantee the security and welfare of the Nigerian people as provided under Section 14(2)(b) of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
The President has personally witnessed the anger of the people in Katsina State and Kano State Government. In the midst of the mass anger, President Buhari was reported to have assured that the Federal Government would ensure that citizens were unharmed in their businesses and no disruption is caused to the entire supply chain arising from the currency swap due to end shortly. But contrary to the assurance, citizens have been harmed already while their businesses have been disrupted. Based on the mass anger in the land caused by the poor implementation of the new currency policy some Banks have suspended operations until further notice.
PRESIDENTIAL APPROVAL OF REDESIGN OF CURRENCY NOTES
When the Minister of Finance, Mrs Zainab Ahmed claimed that she was not consulted before the announcement of the policy, Mr. Emefiele said that the Board of the Central Bank had sought and obtained the approval of the President in line with Section 19 of the Central Bank Act. The approval was confirmed by
President Buhari who stated that the policy was designed to stop the monetisation of the 2023 elections. The people of Nigeria hailed the policy but demanded for adequate time to replace the old currency notes with new ones.
Even though the Central Bank of Nigeria knew that enough new currency notes have not been printed it
directed millions of customers to deposit their old notes in the Banks and collect the new notes from the Automatic Teller Machine (ATM). But the ATMs have no new notes to dispense to customers. Hence, the long queues in the banks. The situation is worse in the rural areas where majority of people have no bank accounts. The crisis has engendered mass anger in all the states of the Federation and Federal Capital Territory. Consequently, some bank employees have been attacked as Bank buildings have been damaged by angry customers.
The deadline for currency swap was January 31. It was later extended to February 10. And during his meeting with APC Governors last week, the President gave a 7-day extension within which to resolve the twin crises of currency and fuel scarcity. The intervention of the President is in line with Section 20(3) of the Central Bank Act which provides that “Notwithstanding Sub-sections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this Sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.”
Furthermore, in exercise of his power under the Constitution the President summoned a meeting of the Council of State for advice on the resolution of the currency scarcity crisis. The Council advised the President to direct the CBN to print more money and if it is unable to do so, to allow the use of the old and new notes to reduce the suffering of citizens. The Governors of the 36 states of the Federation are members of the Council of State. The President has equally held a meeting with the heads of the anti graft agencies and two governors, i.e., Governor Aminu Tambuwal, the Chairman of the Nigeria Governors Forum and Governor Abubakar Bagudu the chairman of the APC Governors Forum.
DISPUTE BETWEEN STATES AND FEDERAL GOVERNMENT
It is pertinent to draw attention to Section 39 of the Central Bank Act which provides that the CBN may act as banker to States and Local Governments and to funds, institutions or corporations established by Federal, State and Local Governments while section 40 thereof stipulates that the Bank may act generaly as agent for the Federal Government, State Governments, or Local Governments. It is the case of the Plaintiffs that new currency policy of the Defendant has had adverse effect on the operations of their accounts in the CBN and other commercial banks in the country.
It is therefore submitted that the main dispute between the Federal Government and the affected State Governments is that issuance of redesigned Naira notes by the Central Bank with the approval of the President and the deadline approved by the President for the currency swap as well as insufficiency of the new currency notes have created economic crisis in Kaduna, Kogi and Zamfara States. Furthermore, the restriction of the amount of cash withdrawal from the bank accounts of the State Governments is illegal and unconstitutional as it is ultra vires the Defendant.
Not a few lawyers have questioned the jurisdiction of the Supreme Court to hear and determine the case of the Attorney-General of Kaduna State & 2 Ors v Attorney-General of the Federation (SC. 2023) on the ground that there is no dispute between the Federal Government and the Plaintiffs. As far as they are concerned the dispute is between the Plaintiffs and the Central Bank of Nigeria. The lawyers have referred to the case of Attorney-General of Lagos State v Attorney-General of the Federation (2014) 9 NWLR (Pt. 1412) 217 which pertained to the operation of the Federal Inland Revenue Service (FIRS) against an agency of Lagos State Government which the Federal Government contended accrued to it.
With respect, the case of the Attorney-General of Lagos State v Attorney-General of the Federation (supra) is completely irrelevant to the facts of this case. In that case, the President was not involved in the operations of the statutory functions of the FIRS. But in this case, the President approved the issuance of the redesigned Naira notes. He also approved the deadline for depositing the old currency notes as well as the restriction of cash withdrawal to facilitate the demonetisation of the 2023 general elections. It is therefore grossly misleading to contend that the Plaintiffs have no axe to grind with the Federal Government in spite of the involvement of the President in the authorisation and implementation of the redesign of the new Naira notes.
It is curious to note that lawyers have not cited the case of Attorney-General of Lagos State v Attorney-General of the Federation (2005) 2 WRN 1 which pertained to the directive of President Olusegun Obasanjo to the Minister of Finance to seize the statutory allocations of the Lagos State local government councils over the creation of additional 57 local governments. Even though it was found that the establishment of local government councils was inchoate the Supreme Court declared the seizure of the fund belonging to the local government councils illegal and unconstitutional.
In view of the foregoing, it is grossly misleading to contended that the Supreme Court lacks the jurisdictional competence to hear and determine the case of Attorney-General of Kaduna State & 2 Ors v Attorney-General of the Federation (Suit No SC. 2023). In other words, to the extent that the President gave approval for the issuance of the new currency notes and approval for the extension of the deadline for the deadline of February 10, 2023 for the currency swap as well as approval for the restriction of cash withdrawal it is indisputable that the dispute is completely outside the jurisdiction of the Federal High Court.
PRINTING OF REDESIGNED NAIRA NOTES WITHOUT APPROPRIATION
It was recently reported that Aisha Ahmad, Deputy Governor, of the financial System Stability Directorate of the apex bank who represented Emefiele the CBN Governor before a House of Representatives committee disclosed that N500 million worth of new currency notes had been ordered from the mint. She however failed to answer questions on how much was expended to produce the same. The national assembly members ought to have drawn her attention to section 59 of the Constitution which requires the President to submit a money bill for appropriation of the fund for printing the redesigned currency notes.
In Dr. Uzor Ikebudu v Central Bank of Nigeria (Suit No FHC/L/CS/343/2013) the Federal High Court declared that the refusal to submit its budget for appropriation by the National Assembly was illegal and unconstitutional. The court proceeded to grant a perpetual injunction restraining the Central Bank from failing or refusing to submit its budget to the National Assembly for appropriation on a yearly basis. But in defiance of the judgment of the Federal High Court and in utter breach of the Constitution the Central Bank has been spending trillions of Naira to print currency notes without appropriation by the National Assembly.
CASHLESS POLICY AND MONEY LAUNDERING ACT
Upon the adoption of the cashless policy the CBN decided, with the approval of the President, to restrict the amount that can be withdrawn from any bank account to not more than N20,000 per day and not more than N100,000 per week. The cash withdrawal was later increased from N20,000 to N100, 000 and maximum of N500,000 per individual per week. Owing to the fact that the CBN has not printed enough money cash withdrawal has since been further reduced to N5,000 by the banks.
It is submitted that the restriction is illegal as it violates section 2 of the Money Laundering Act, 2022 which provides that no person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a)5,000,000 or its equivalent, in the case of an individual ; or (b) N10,000,000 or its equivalent, in the case of a body corporate.” Since the Money Laundering Act 2022 has not been amended by the National Assembly the restriction of cash withdrawal policy of the Federal Government cannot be justified in law.
EX PARTE ORDER GRANTED BY SUPREME COURT
By virtue of section 22 of the Central Bank Act which provides that the CBN shall redeem old currency notes, I had said that the deadline of February 10 given by the CBN for the currency swap was not sacrosanct. When Mr. Emefiele appeared before the House of Representatives ad hoc committee looking into the implementation of the policy on January 31 he said commercial banks must accept the old Naira notes even after the expiration of the 10 February deadline. He has since turned round to state that only the CBN could redeem the old currency notes after the deadline.
The Supreme Court was therefore on a strong legal wicket when it granted the ex parte order to halt the deadline of February 10 and fixed the hearing of the substantive suit to February
In other words, having been seized of the matter the apex court acted under its Rules in intervening by granting the ex parte order to preserve the res. The judicial intervention is justified by the decision of the apex court to hear the case with dispatch in spite of the several time bound appeals which are currently being attended to by their Lordships.
CBN IS NOT INDEPENDENT AS IT IS AN AGENT OF FG
In misleading the CBN Management, some lawyers have insisted that the apex bank is an independent institution and that it is not a party to the case of Attorney-General of Kaduna State & 2 Ors v Attorney-General of the Federation pending at the Supreme Court.
Interestingly, the Supreme Court ruled that the CBN is an agency of the Federal Government in the case of Obiuwvera v Central Bank of Nigeria where Rhodes-Vivour JSC held:
”This suit has to do with the administration or management and control of the Federal Government. The respondent is a Federal agency and the appellant is/was its employee. The termination of the appellant’s appointment is on administrative action by an agency of the Federal Government, the respondent.”
In the same vein, in the case of Fayose v EFCC & Anor (2018) LPELR 46474(CA) the Court of Appeal dismissed the claim of that the CBN is an independent institution when Dongban-Mensem JCA (now PCA) held:
“The independent status of the 2nd Respondent touted by the Appellant is a lame link. Section 1(3) of the Central Bank of Nigeria (Establishment) Act has not been shown to be independent of the legal guidance of the Hon. Attorney-General of the Federation who is the Chief Legal Officer of the Federal Republic of Nigeria. Nor was it demonstrated to the Court of trial that the independent status of the CBN takes it out of the supervisory management of the Hon. Ministry of Finance who is a Public Officer.”
In view of the pronouncements of both appellate courts to the effect that the CBN is an agency of the Federal Government the provocative disregard for the valid and subsisting order of the Supreme Court by the Management of the apex court should not go unchallenged in view of section 287 of the Constitution which stipulates that, “The decisions of the Supreme Court shall be enforced in any part of the Federation by all authorities and persons, and by courts with subordinate jurisdiction to that of the Supreme Court.” Otherwise, the CBN would have set down a dangerous precedent for the subversion of the rule of law in Nigeria.
The currency and fuel crises constitute unprecedented challenge to economic survival of ordinary people that may threaten the 2023 elections which provide an opportunity for the people to choose a party considered to be representative of their aspirations. The officials of the CBN and other banks involved in hoarding or selling the new currency notes should be prosecuted to serve as a deterent to other economic saboteurs.
Since it is now clear that enough Naira notes have not been printed the Central Bank should allow the old and new Naira notes to be legal tender in Nigeria. This suggestion is in line with Section 22 of the Central Bank Act which permits the replacement of old currency notes with new ones after the deadline fixed by the CBN.