The Central Bank of Nigeria (CBN) at the weekend justified its reluctance to extend the expiry date for the old Naira notes on the need to save Nigeria’s democracy by forestalling vote-buying in the coming presidential election.
The apex bank gave the reason, among others, in a counter-affidavit to a suit filed against it by a group, Social Rehabilitation Grace and Supportive Initiative (SRG) led by a Nigeria-born United States medical practitioner, Dr. Marindoti Oludare.
The SRG, code-named Social Rehabilitation Gruppe, was launched amid pomp and ceremony in Akure, the Ondo State capital, at the weekend.
Reacting to the group’s suit before a Federal High Court sitting in Akure, in which it asked the court to compel the CBN to extend the expiry date for the old Naira notes by six months, the apex bank urged the court to dismiss the suit, averring that the plaintiffs had no justifiable reason for filing it.
In a counter-affidavit through its counsel, O. M. Atoyebi (SAN) and co., the CBN opposed the defendants’ interlocutory injunction on the grounds that “the extension (of expiry date for old naira notes of N200, N500 and N1000) will give room for vote-buying and undermine the forthcoming election”.
It also added that “the extension of the timeline will jeopardise the fight against fraud, corruption and criminal activities perpetrated with the use of the old currencies”. It specifically cited the festering kidnapping crime, claiming a change in currency notes will end it.
Countering the SRG’s reference to currency change in India in 2016 in which the group said the Indians were given enough time to replace old Indian rupees, the CBN differed in its narration of the Indian experience.
It said, “The government of India announced the change of their legal tender on November 8, 2016 and was implemented within two days.”
The CBN added, “The entire citizens of India of about 1.417 billion adhered to the timeline strictly, which has led to positive improvement of the Indian economy. “
But in its suit, the SRG argued that the CBN acted beyond its powers by setting a timeliness for the expiration of the old Naira notes.
“While we know of a fact that the CBN has the right to denominate the Naira, it has no right to erase the value acquired by individuals,” the group stressed.
It also remarked that “the administration of former President Goodluck Jonathan also redesigned currency notes, following which the new and old naira notes were both legal tender for over two years before the old notes went out of circulation”.
Oludare, the first plaintiff, also stated, “When I visited Nigeria from the United States of America on December 29, 2022, I went to Automated Teller Machine operated by First Bank of Nigeria Plc in Lagos to make some cash withdrawals but the machine dispensed only the old notes”.
He said the CBN had failed to also provide a means whereby Nigerians resident abroad could exchange their old notes.
The SRG remarked that the time given by the CBN could not be considered a reasonable time, “as contained in Section 20 (3) of the CBN Act 2007, considering the population of the country, which according to Worldometre elaboration of the United Nations ‘ data, stands at about 219, 375,886; about 2.64% of the world population”.
It averred that setting a hurried expiry date for the old naira notes at a time Nigeria is preparing for a major election smacked of mischief and could derail a smooth transition from one government to another.
It said India did the same thing in 2016 but that they sought a cessation of liability ordinance in order for the old notes to cease from being a legal tender. And the rupees were readily available in all banks during this period.
“The cessation of liability is not in the CBN act hence they do not have the right to stop being liable for those old notes,” the group appraised.
In the suit therefore, the four plaintiffs, namely Oludare, the SRG, Omoyele Ishola and Demola Obadofin, are asking the court to extend the February 10, 2023 for the expiration of the old naira notes by six months.
The applicants are also seeking, among others, an interim injunction restraining “the respondents and her privies, agents, or servants from enforcing the deadline date of 10th February 2023, wherein the old N200, N500, and N1000 currency notes cease to be legal tender, pending the hearing and determination of the motion on notice”.
The applicants also add that the court should give “an order compelling the respondent to extend the submission of old N200, N500 and N2000 currency notes, by a minimum of six moths before same are finally called in and cease to be a legal tender, pending the hearing and determination of the motion on notice”.
In tow, the applicants want an order of interim injunction restraining the respondent from setting a deadline for setting old N200, N500 and N1000 currency notes, saying such is alien to the provisions of the CBN Act 2007, pending hearing and determination of the motion on notice.
In the suit filed by their counsel, L.E Ukpabi, the plaintiffs averred that the the scarcity of naira notes occasioned by the redesigning of N200, N500 and N1000 notes had brought untold hardship to the Nigerian public, as the notice for the swap was too short.
Already, the court has fixed Thursday, February 16, 2023 for hearing.