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Nigeria’s Supreme Court temporarily suspended Friday’s deadline to stop using old banknotes. The government’s move caused a cash crisis in the country
Nigeria’s Supreme Court temporarily suspended Friday’s deadline to stop using old banknotes. The government’s move had caused a cash crisis in the country. After the government’s decision to carry out the withdrawal of the old bank notes, the northern states of Kaduna, Kogi, and Zamfara challenged the decision in the Supreme Court.
Many banks have not had enough of the new naira notes, leading to desperate and chaotic scenes as people tried to get their hands on them leading to fights at ATMs, protests, and mob attacks on commercial banks. Nigeria is going to polls this month, which has cast doubts in the minds of people how it could be held peacefully amidst the present chaos. The head of the election commission said some election service providers will need to be paid in cash, which the election watchdog felt would be difficult in the present situation.
The Central Bank said the currency redesign would help it tackle inflation, which is currently running at about 21%. They also feel it is an effective solution to curb counterfeiting, which is rampant while moving towards a cashless society. It added that 80% of the notes currently in circulation were being held outside financial institutions. It hoped the redesign would bring some of that money being hoarded by individuals and companies back into the financial system, and rein in prices.
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Lawyers representing the Northern states argued that the government’s policy had led to an excruciating situation that is almost leading to anarchy in the land. Justice Okoro, who heard the case, imposed an Interim Injunction restraining the federal government from going ahead with the proposed plan. The case will be heard again on 15th February.
