Naira Redesign: Join Case Against FG, Nigeria Governors’ Forum (NGF) Direct States’ Attorneys-General

State governors have directed their Attorneys General to join the case filed at the Supreme Court against the new naira notes by the Central Bank of Nigeria (CBN). About seven state governments, mostly those controlled by the ruling All Progressives Congress (APC), have already filed suits at the apex court against the CBN policy.

The Supreme Court last week temporarily suspended the ban on the use of old notes till February 15 when the suit filed by these state governments will be heard. The state chief executives after its meeting on Saturday directed their Attorneys General to review the suit at the Supreme Court with a view to consolidating the legal reliefs pursued the states.

Chairman of the Nigeria Governors’ Forum (NGF), the umbrella body of state governors, Aminu Waziri Tambuwal in a communiqué, also called on the Federal Government and the CBN “to respect the rule of law and listen to the voice of reason expressed by Nigerians and several other stakeholders including the Council of State, before the damage to our economy becomes too great to fix by the next administration.” Tambuwal, who is the governor of Sokoto State, said the apex bank is confusing naira redesign with cashless policy, adding that the two are mutually exclusive.

“It has become necessary to make a distinction between the Central Bank of Nigeria’s (CBN’s) naira redesign policy backed by Section 20 (3) of the CBN Act, 2007 and the aspirational policy of going cashless, both of which are mutually exclusive at this time.

“It is our considered view that what the CBN is at present pursuing is a currency confiscation programme, not the currency exchange policy envisaged under S20 (3) of the CBN Act, 2007. “Currency confiscation in the sense that the liquidity provided to the general public is grossly insufficient due to the restrictions placed on the amount that can be withdrawn regardless of the amount deposited,” he said. The communiqué said the current approach of the CBN raises concerns about the respect for the civil liberties and rights of Nigerians as it relates to their freedom to use legitimately earned income as they so wish.

The governors expressed the belief that the deployment of a cashless policy to deepen digital transactions is the best practice around the world, which he said, is to create incentives to attract customers. He condemned what he described as “a draconian approach as we have witnessed in the last three months.” The Sokoto State governor argued that: “The CBN for what it describes as the astronomical increase in the currency in circulation as the basis for this policy is not supported by its own data. “According to the CBN, the currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022.

“The bank appears not to have taken into consideration the increase in the size of the country’s nominal GDP over this period, the doubling of consumer prices, rising population, and the impact of the humongous Ways & Means advances to the Federal Government by the Central Bank of Nigeria over this period. “In the circumstances, it is safe to draw either of two conclusions – the CBN data may be incomplete or in fact, Nigerians conmay have done exceptionally well in the transition to a cashless economy.

“In addition, considering the sizeable informal sector in the nation, the amount of banknotes created in exchange so far by the CBN implies it vastly underestimated the economy’s actual cash needs. “The inability to use the new notes has had far-reaching economic effects, leading to the emergence of the naira black market, severe food inflation, variable commodities prices based on the method of exchange, and long queues as well as crowds around Automated Teller Machines (ATMs) and banking halls across the country with individuals hoping to get a fraction of their money in new notes to meet their daily livelihood.

The country runs the risk of a CBN-induced recession. “While we acknowledge the submission of the Attorney General of the Federation that the Federal Government will comply with the ruling of the Supreme Court which calls for the halting of CBN’s plan to end the use of the old currency notes, we are yet to observe changes in the financial system.”