Nigeria’s top court blocked the central bank from ending the use of higher-denomination naira notes, a policy that has disrupted banking in Africa’s biggest economy.
(Bloomberg) — Nigeria’s top court blocked the central bank from ending the use of higher-denomination naira notes, a policy that has disrupted banking in Africa’s biggest economy.
The Supreme Court ruling bars the central bank from halting the use of 200- 500- and 1,000 notes from Feb. 10. The matter was adjourned until the Feb. 15 hearing of a lawsuit brought by three state governors challenging the central bank plan.
“We were successful in obtaining an interim injunction against the Feb. 10 Central Bank of Nigeria deadline for use of the old notes until the determination of the substantive suit,” Aisha Dikko, attorney general of the Kaduna state government in northern Nigeria, said on Wednesday.
Nigeria’s demonetization policy has divided the ruling All Progressives Congress, with its presidential candidate, Bola Ahmed Tinubu, arguing that the policy may undermine the party’s chances in elections later this month. The Kaduna, Kogi and Zamfara state governors — all of whom belong to the APC — said in court that their “states are on the verge of anarchy” because their residents can’t obtain new notes after depositing the old ones.
President Muhammadu Buhari, who is serving his final four-year term that ends in May, has backed the central bank policy.
The Supreme Court has “saved the country from needless political and economic crises and miseries which have clearly become the unintended consequences of the monetary policy of the apex bank,” Tinubu said Wednesday in an emailed statement. “We have seen how a good policy can be poorly implemented to cause unintended problems for the people who should be the beneficiaries.”
The International Monetary Fund on Wednesday also urged the central bank to consider extending the deadline for the old notes to cease to be legal tender if the lack of access to new notes persists.
–With assistance from William Clowes.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.