Nigeria Supreme Court Postpones Ruling On Cash Swap Until After Election

February 23, 2023
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Nigeria’s Supreme Court has voted to postpone a key decision on the withdrawal of "old series" naira banknotes until after the country’s presidential election following criticism.

Nigeria’s Supreme Court has voted to postpone a key decision on the withdrawal of "old series" naira banknotes until after the country’s presidential election following criticism.

On Wednesday (February 22), the Supreme Court voted to adjourn a lawsuit that seeks to extend the deadline for withdrawing “old series” NGN200 ($0.43), NGN500 ($1.09) and NGN1,000 ($2.17) notes from circulation.

The lawsuit, filed against the federal government by five state governments, is now set to be decided on March 3.

This means that the verdict will be issued almost a week after the Nigerian presidential election on February 25, and just over a week before the state elections on March 11.

In effect, the adjournment of the lawsuit produces the desired outcome sought by the state governments, allowing their constituents to continue using the old banknotes, at least until the decision on March 3.

Originally, as reported by VIXIO, the deadline for the withdrawal of the old notes and their replacement with redesigned versions was set at January 31.

As the deadline approached, cash shortages began to spread throughout the country, resulting in riots and attacks on banks and ATMs.

Responding to pressure from the House of Representatives, the Central Bank of Nigeria (CBN) then agreed to extend the deadline for the withdrawal of the old notes to February 10.

However, this extension was deemed insufficient by five state governments, which then petitioned the Supreme Court for a temporary suspension of the CBN deadline.

Since then, the position of the federal government and CBN has softened somewhat.

Last week, President Muhammadu Buhari issued a directive stating that old NGN200 notes may continue to be re-issued and circulated for another 60 days, but old NGN500 and NGN1,000 notes should continue to be withdrawn.

“I am fully aware of the current hardship being faced as a result of some policies meant to bring overall improvement to the country,” Buhari said in a statement.

“I'm appealing to you to exercise further patience as we take measures to ease these hardships. God willing, there is light at the end of the tunnel.”

But this week, the federal government and CBN have come under yet more criticism from state leaders for their handling of the naira redesign policy.

Nasir Ahmad El-Rufai, governor of Kaduna State, said on Twitter that so far the CBN has withdrawn more than NGN2trn ($4.3bn) from circulation but printed only NGN400bn ($9.3m), leading to widespread cash shortages.

“In effect, currency confiscation was unilaterally and unlawfully implemented by the CBN,” said El-Rufai.

“Trade and exchange have collapsed. Human suffering, impoverishment and economic contraction resulted.”

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