Naira redesign: Implementing the Supreme Court’s ruling

Days after a Supreme Court judgement extending the legal tender status of the old banknotes till December 31st 2023, some banks in Kano, Oyo and the Federal Capital Territory have started re-issuing the old 500- and 1,000-naira notes, while some banks say they await further directive from the Central Bank of Nigeria. Chamberlain Peterside the CEO of Xcellon Capital Advisors, joins CNBC Africa for this discussion.

Tue, 07 Mar 2023 11:42:59 GMT

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AI Generated Summary

The Supreme Court extended the legal tender status of old 500- and 1,000-naira banknotes until December 31st, 2023, following challenges in the distribution of new notes.
Some banks have started re-issuing old banknotes to address cash shortages, while others await clarity from the Central Bank of Nigeria.
Chamberlain Peterside emphasizes the importance of the CBN complying with the Supreme Court's decision to support economic activities and ensure financial stability.

In a recent Supreme Court judgement, the legal tender status of the old 500- and 1,000-naira banknotes has been extended until December 31st, 2023. This ruling has led to some banks in Kano, Oyo, and the Federal Capital Territory re-issuing the old notes, while others await further directives from the Central Bank of Nigeria. Chamberlain Peterside, CEO of Xcellon Capital Advisors, joined CNBC Africa to discuss the implications of this decision. The Supreme Court's intervention came in response to the Central Bank's plan to redesign and recolor the Naira notes for reasons such as combating inflation, addressing counterfeiting, and tackling vote buying. However, the rush to introduce the new notes led to significant challenges in their distribution, with long lines forming at ATMs and bank branches. The delays prompted the Supreme Court to extend the deadline for the old notes' withdrawal and the new notes' introduction. This move aims to alleviate the pressure on citizens and facilitate smoother transactions in the interim. While the CBN has not issued a formal response to the judgement, some banks have begun re-issuing the old banknotes to ease the cash shortage. The lack of a clear directive from the CBN has left banks in a state of uncertainty, with some speculating that the central bank may challenge the Supreme Court's decision. Peterside believes that challenging the judgement would be unlikely, given the Supreme Court's authority as the highest court in the country. He stresses the importance of the CBN complying with the ruling to support economic activities and ensure the smooth functioning of the financial system. While the transition to e-channels has shown progress in reducing cash reliance, the need for physical currency remains significant, particularly in the informal sector. Peterside encourages the CBN to prioritize adherence to the Supreme Court's decision and work towards enhancing financial inclusivity and accessibility for all Nigerians.