Nigeria’s Supreme Court rules CBN naira redesign invalid

Nigeria’s Supreme Court has ruled that old banknotes remain legal tender until the end of the year, bringing relief to millions affected by a chaotic redesign of the naira notes.

The justices said that not enough notice was given to the public before the old notes were withdrawn.

Not enough of the new notes were released, leading to widespread anger and frustration.

Many people were unable to get cash to pay for food and slept outside banks.

The policy was announced last October and the new notes were released in mid-December. People were initially given until the end of January to hand in all their old notes, although this had previously been extended amid the chaotic scenes.

Reading out the ruling, Justice Emmanuel Agim said the correct process had not been followed.

“The directive given by President is invalid. Such directive is not just handed down after personal conversation with the governor of CBN [Central Bank of Nigeria],” he said.

The court also berated President Muhammadu Buhari for not obeying a previous provisional order to halt the policy until it decided the case. It said there was nothing to show that President Buhari’s directive for the release of old 200 naira notes until 10 April was implemented.

“Disobedience of order of court shows the country’s democracy [is] a mere pretension and now replaced by autocracy,” it said in a scathing verdict.

Nigerians are still experiencing difficulties accessing cash at banks and cash machines and it is not clear what immediate impact the reversal will have.

Many had already deposited their old notes at the banks and with the new ones unavailable, large numbers have switched to online banking.

However, millions of people and businesses in the rural areas remain heavily dependent on cash.

Sixteen Nigerian states had challenged the redesign of the 200, 500, and 1,000 naira notes, saying that the deadline was too tight.

The central bank said that the redesign would help bring down inflation, control the amount of money in circulation and make ransom payments in Nigeria’s huge kidnap industry more difficult. Many suspected that the policy was also targeted at politicians involved in vote-buying during elections.

A tightly contested presidential election last Saturday was won by the ruling party. Some cases of vote-buying were reported, but fewer than in previous polls.