Cash crisis: States reject CBN’s partial compliance - THE NATION
MIFFED by the partial or a near zero compliance with the Supreme Court judgment on the naira redesign policy by the Central Bank of Nigeria (CBN), some states are set for another round of legal battle.
This followed the persistence of cash scarcity despite the apex court’s verdict on March 3 that the old N1000 and N500 notes be recirculated and be allowed to run with the redesigned notes till December 31.
In a two paragraph states on Tuesday (11 days after the judgment was delivered), the CBN directed banks to resume the collection and payment of the old notes.
The CBN directive came on a day the Presidency said the apex bank Governor, Godwin Emefiele and the Attorney-General of the Federation and Minister of Justice, Abubakar Malami needed no clearance from President Muhammadu Buhari to obey the judgment of the Supreme Court.
It was learnt yesterday, no fewer than 10 states have opted to continue with the legal battle over the use of old and new naira notes.
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The states, sources said, have directed their lawyers to reactivate the contempt proceedings against AGF, Malami (SAN) and Emefiele.
The contempt charges will be activated from next week in the apex court.
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They described the CBN directive to banks to enforce the Supreme Court judgement as “deceptive” because of “lack of cash backing.”
Investigation revealed that the states have rejected the attitude of the CBN to the judgment of the court.
The aggrieved states, which obtained the judgment are: Kaduna, Kogi, Zamfara, Ondo, Ekiti, Katsina, Ogun, Cross River, Lagos and Sokoto.
It was learnt that a review meeting by some of the governors yesterday indicated that the people of the 10 states have no access to the old and new N1,000, N500 and N200 notes.
They claimed that they were “not swayed by the deception” of the CBN, which only issued a statement without giving effect to the judgment.
According to findings, the grouses of the states were based on the following five grounds:
* Non-availability of the currency notes of N1, 000, N500 and N200.
* Many people in the10 states have been going to banks without access to cash.
* Most ATMs are not dispensing N1,000, N500 and N200.
* CBN has not taken any concrete step to reduce the suffering or hardship of the people of the affected states.
*Contrary to the judgment of the Supreme Court, the CBN is still limiting the amount that can be withdrawn and the charges therein.
In an exclusive chat with our correspondent, the lead counsel to the states, Mr. A. U. Mustapha (SAN), said: “As far as our clients are concerned, there is no compliance with the judgment of the Supreme Court. What the CBN has done is deceptive, cosmetic and merely playing to the gallery to deride the highest court in the country.
“The governors said the people of their states are still suffering from the non-availability of the concerned currency notes.
“In the light of the judgment, it is a derision of the Supreme Court CBN to refuse to make the affected currency notes available or limit the amount a customer can withdraw.
“We have a clear mandate from our clients to go ahead with the already initiated contempt proceedings against the AGF and the CBN.
“We want the AGF and the CBN to come and prove to the Supreme Court that they have substantially complied with its judgment.”
Responding to a question, Mustapha said: “We will go ahead with the contempt proceedings from next week. We are set for the next phase of the legal battle in the interest of all Nigerians.”
The Supreme Court had extended the validity of the old N200, N500 and N1, 000 to December 31st, 2023.
The Attorney-General of the Federation was served the enrolled order, dated March 3rd, 2023 last Friday.
By the service, the order became automatically applicable to all agencies of the Federal Government, including the Central Bank of Nigeria (CBN).
The enrolled order of the Supreme Court, which was exclusively obtained by The Nation, reads as follows: “It is ordered that this suit has merit. That the demonetisation directive/policy by the President of the Federation to wit: withdrawal of the old 200, 500, and 1000 naira notes is not consistent with the provision of the Constitution of the Federal Republic of Nigeria 1999(as amended) which makes provision for the Executive power of the President of the Federation and the extant laws on the subject matter.
“That the three months’ notice given for the implementation and completion of the said demonetisation policy by which time the old N1,000, N500 and N200 naira notes shall cease to be legal tender does not satisfy the condition set out in Section 20(3) of the CBN Act 2007.
“That the President cannot unilaterally give a directive to embark on the demonetization policy pursuant to Section 20(3) of the CBN Act 2007 in view of Nigeria’s Fiscal Federalism, the economic interest of the Constituents of the Federation and without consultation with, and advice from the plaintiff, individually, and in their capacity as members of the National Council of States and National Economic Council and that the directive cannot be given without consultation with, and advice from the cabinet, the National Security Council and other stakeholders.
“That in issuing the directive for demonetization policy pursuant to Section 20(3) of the CBN Act, 2007 on behalf of the Federation of Nigeria, the President is under an obligation to ensure that adequate structures are put in place for the plaintiffs and Nigerian citizens prior to the implementation of the said directive.
“That the demonetisation directive/policy by the President of the Federation to wit: withdrawal of the old N200, N500 and N1, 000 notes unlawfully impede the exercise of the Executive Powers of the plaintiffs’ states and other obligations to facilitate and protect the welfare of the citizens of the said states pursuant to Section 5(2) and other provisions of the Constitution of the Federal Republic of Nigeria 1999(as amended) as well as other extant laws.
“That the directive given by the President pursuant to Section 20(3) of the CBN Act 2007 limiting the amount that can be withdrawn and the charges therein without an enabling law is unconstitutional and not binding on the plaintiffs.
“That the directive of the President of the President of the Federation exercised is illegal to the extent that it restricts, without an enabling law, the rights of the plaintiffs to freely use their money in various bank accounts.
“That the old version of N200, N500 and N1,000 notes shall continue to be legal tender alongside with the new or redesigned version until 31st December, 2023.
“That the reception of old N200, N500 and N1,000 notes and the swapping of same with new Naira notes shall continue till 31st December, 2023.
“That all the consolidated suits listed in pp. 12-13 of the judgment shall abide this judgment.”