NEW NAIRA NOTES: EL-RUFAI & OTHERS HEAD TO THE SUPREME COURT

Enough of the new Naira notes saga. This moment you read on the papers that some state governors have instituted an action against the Federal government over the new naira notes problem, and later that same day, you see another news that a set of people have dragged the CBN governor to FCT High Court seeking an order preventing the extension of the deadline for old Naira notes. One issue, two different courts, different parties.

The gist is that, three governors, Governors Nasir El-Rufai of Kaduna state, Yahaya Bello of Kogi State, and Bello Matawalle of Zamfara state instituted an action against the Federal government at the Supreme Court of Nigeria (SC) through their various State Attorney-Generals.

What the three governors want the SC to do is to declare that the Demonetization policy of the Federation by the CBN under the directive of Mr. President is not in compliance with the provision of the 1999 Constitution (as amended) and the Central Bank of Nigeria Act 2007. Secondly, they want the SC to declare that the three-month notice given by the FG and CBN for the expiration of the old bank notes as legal tender is a gross violation of the provisions of section 20(3) of Central Bank of Nigeria Act 2007. In all, the main problem is that these State governors are not totally happy with the new Naira notes change thing going on in Nigeria.

First and foremost, I want you to understand that it is not a new thing for a State Government to sue the Federal Government. It has always been. In fact, section 232 (1) of the 1999 Constitution provides that;

“The Supreme Court shall, to the exclusion of any other Court, have original jurisdiction in any disputes between the Federation and a State……..”

 So, whenever there is a dispute between a State and the Federal Government, the only place to run to is the Supreme Court of Nigeria. It is only the Supreme Court that look into matters of such nature, and decides the fates of both parties.

There is no need to go into the political agenda of both parties concerning this issue. That is not why I am here. I am here to walk you through the provisions of the 1999 Constitution and the CBN Act 2007 as it regards the issue on ground and if the governors stand a chance at the SC.

A closer look at the latter part of section 232 (1) of the Constitution shows that the Court only looks into disputes between the parties,

“….. if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends”

This means that “there must be a justiciable dispute between the said State(s) and the Federal Government, and the said dispute must involve a legal interest which is being or about to be injured”. What do we really define as a dispute? A disagreement, an argument, a debate. A justiciable dispute would mean a real controversy between the state(s) and the Federal Government.

The questions I have for the three sitting governors are, is the change of the Naira note a “real controversial dispute” between the State(s) and the Federal Government? Is there a reasonable Cause of Action? Has the change of the Naira notes in anyway affected the legal rights of the State(s) government?  Like, what is really the argument, disagreement between these two parties that affect the legal interest of the States? These are issues that the SC would consider before deciding whether or not to hear the matter at all. Note: If the SC holds that it cannot hear the matter, the suit would be thrown out of the Court.

Like I always say, my opinions are subject to the decision of the Justices of the Supreme Court. So, let us imagine that the SC holds that this is really a dispute that it should look into, the next hurdle to cross would be the provisions of the Central Bank of Nigeria Act, 2007. Section 20(3) of the Act provides:

“……………, the Bank (CBN) shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof any note or coin with respect to which a notice has been given under this subsection, and   shall, on the expiration of the notice, cease to be a legal tender…..”

The simple explanation of the above provision is that the CBN can on the instruction of Mr. President change the Naira notes, but it must give “reasonable notice” to that effect. Obviously, the problem the governors are having is the time frame, the said “notice” given by the Central Bank. Can three months be said to be “unreasonable notice”?

The FG is yet to respond to this action. When it does, the main issue would probably be “What is the actual definition of the phrase “Reasonable notice” as stated in the Act? Would the Justices of the SC hold that three months was more than enough time for a change of the Naira notes? One has to wonder what the Court would use as its parameter in measuring if three months is reasonable enough.

To me, if the State governors are being honest, they ought to have brought this action before now, like just when the notice was initially issued. In law, it is best to act timeously, not sleeping on your “right” only to wake up at the dying minute and place undue pressure on the Court.

The State governors also have to take note of the action before the FCT High Court, Abuja, that was instituted by some Political parties, wherein the Court ordered the CBN stick with the February 10^th deadline. That is to say, there is a subsisting order of Court which must be obeyed by CBN, unless the governors appeal against it. That in itself is a long process.