The Supreme Court on Friday extended the validity of old banknotes in Nigeria, invalidating a government directive that has been causing a severe cash shortage in Africa’s most populous country for weeks.
In a ruling handed down, it said that President Muhammadu Buhari, whose government decided to outlaw old naira bills from February, did so without consultation, which “makes him a dictator”.
In October, the Nigerian authorities had suddenly announced the coming change of banknotes (including their color), and decided that the old bills would no longer be valid at the end of January, a date that was later postponed to 10 February due to shortages and popular pressure.
For more than a month, huge queues have formed in front of banks, unable to distribute sufficient new banknotes, plunging the population (half of whom live in extreme poverty) into immense distress. Many Nigerians work in the informal sector of the economy and rely solely on cash for their daily transactions.
Several regional authorities in Nigeria filed a lawsuit against the federal government, seeking to allow people to use both old and new banknotes until the banks had received enough new bills.
In its ruling, the Supreme Court agreed, stating that “the directive to stop the circulation of old bills is declared invalid. It thus extends their use alongside the new bills until 31 December 2023.
The Court deplored the lack of “consultation” and the fact that “no adequate notice was given to Nigerians before the withdrawal of the existing banknotes and the reintroduction of the new ones. According to her, “as a representative of the Federation, the President has a duty to consult. She added: “Not to do so makes him a dictator.
According to the government, the reform was intended to make monetary policies more efficient, but also to limit vote buying before the February 25 presidential election, a common practice in Nigeria.