The Kano State is challenging the unilateral decision of the Nigerian government through the Central Bank to recall old N200, N500 and N1,000 banknotes without recourse to the Federal Executive Council and National Economic Council.
The Kano and Ondo State governments have filed a suit before the Supreme Court challenging the new banking policy of the Central Bank of Nigeria in Abuja.
The Kano State is challenging the unilateral decision of the Nigerian government through the Central Bank to recall old N200, N500 and N1,000 banknotes without recourse to the Federal Executive Council and National Economic Council.
On the other hand, the Ondo State Government is challenging the Federal Government of Nigeria over the directive issued through the apex bank, limiting daily cash withdrawals from banks.
The two state governments are saying the cash swap policy of the federal government and its redesign of the naira through the CBN was arbitrary.
They asked the court to reverse the controversial policy.
Due to the policy, there is a scarcity of cash in the system, forcing many Nigerians to queue for long hours in banks and at ATM galleries to withdraw rationed cash. The policy is affecting businesses, with many business owners lamenting poor sales because of the paucity of cash in the system.
The suit filed by the Kano State Government on Thursday by Sunusi Musa (SAN), on behalf of the Attorney General of the state was marked SC/CS/200/2023.
The government is seeking a mandatory order reversing the recall of N200, N500 and N1,000 notes from circulation due to the policy.
It noted that the policy is affecting millions of Kano residents.
The state government is also asking the court to compel the Muhammadu Buhari-led Federal Government to reverse the naira redesign policy, which allegedly failed to comply with the 1999 Constitution (as amended).
It is seeking among other declarations: “A Declaration that the combined reading of the provisions of the section 148(2) of 1999 constitution and Part 1, and Paragraph 19 of the Third Schedule thereof, the President cannot unilaterally without recourse to the Federal Executive Council and National Economic Council respectively give approval to the Central Bank of Nigeria for the implementation of cash withdrawal limit pursuant to the demonetization economic policy of the Federal Government of Nigeria.”
On its part, the Ondo State Government in an originating summon filed and signed by the state Attorney General, Sir Charles Titiloye, is asking the Supreme Court to stop the implementation of the directive issued by the Federal Government through the apex bank on limitation of daily cash withdrawals from banks.
The suit noted that the policy has paralysed economic activities in the state.
The state government noted that the policy is an infraction on the legal rights of the Ondo State Government and its citizens to access funds for the execution of developmental projects, and small credit facilities to petty traders (who have no bank accounts).
It added that the policy adversely affects commercial activities in the state.
The applicant urged the Supreme Court to declare that the Buhari government cannot issue a directive through the apex bank seeking to amend or vary an existing Act of the National Assembly “particularly Section 2 of the Money Laundering Act which relates specifically to limitations on cash withdrawals for individual and Corporate organization to Five (5) million Naira and Ten (10) million Naira respectively”.
According to the new guidelines issued by the apex bank, an individual can withdraw a maximum amount of N500,000 a week while a corporate organisation can withdraw a maximum amount of N5 million a week.
Ondo government noted that it has over 149 Ministries, Departments, and Agencies to run on a daily basis with a substantial number of people without bank accounts through which they can make monetary transactions.
The government called for the intervention of the Supreme Court to stop further implementation of the controversial policy and the suffering of its people.
In a related case, Ondo State Government filed an application before the Supreme Court seeking to join the suit instituted by Zamfara, Kaduna, and Kogi states challenging the time frame within which Nigerians can exchange their old naira notes for new ones.
The CBN had declared today, Friday, February 10 as the last day for using the old currency notes as legal tender. But the Supreme Court on Wednesday temporarily halted the Nigerian government's move to stop the use of old naira notes on February 10, 2023.