A plan by the Nigerian government to switch from the old banknotes of its currency, the naira, to new banknotes with a different color and more security features was put on hold by the country’s Supreme Court Wednesday.
The initial government plan was for old naira notes to be null and void after Friday.
Shortages of the new naira notes left Nigerians without the means to fulfill their daily needs, sparking protests. In addition, the ruling party-affiliated governors of three northern Nigerian states, Kaduna, Zamfara, and Kogi, had filed a suit with the nation’s Supreme Court to halt the swap due to the disorder resulting from the note shortages.
In a response to the application, Nigerian Supreme Court Justice John Okoro wrote an interim injunction “restraining the federal government through the Central Bank of Nigeria or the commercial banks from suspending or determining or ending on 10 February, the time frame with which the now older version of the 200, 500 and 1,000 denominations of the naira may no longer be legal tender,” according to the News Agency of Nigeria, a state-owned wire service.
For comparison, 1,000 naira is worth $2.17. The main suit will be heard on Feb. 15.
The ruling All Progressives Congress candidate in Nigeria’s Feb. 25 elections approved the Supreme Court’s decision.
“Our country was dangerously careering toward anarchy and political and economic shutdown. But with the Supreme Court interim ruling, our country has been pulled back from the precipices. We thank our Supreme Court justices for ruling wisely on the side of the people who have been subjected to undue agony and pains,” Asiwaju Tinubu said in a statement, according to Nigerian newspaper The Guardian.
President Muhammadu Buhari unveiled the new currency plan last November in an attempt to rein in counterfeiting with new security measures and to recoup the millions of naira kept by Nigerian citizens outside of banks.
As of last October, only 500 billion naira were within the banks, out of the 3.23 trillion total naira in circulation. With the announcement of the switch and an original Jan. 31 deadline that was then extended to Friday, the CBN has brought back 1.9 trillion naira into the banking system.
The new policy has had problems. One bank manager was arrested by Nigerian authorities this week for refusing to disburse new naira notes despite having them on hand.
Other banks have had similar incidents, which “indicates sabotage of the government’s monetary policy by some banks,” Nigeria’s Economic and Financial Crimes Commission said in a statement according to the Associated Press.
The CBN has since limited the daily payouts at bank counters to try and stop the shortage, ordering deposit banks to “commence the payment of the redesigned naira notes over the counter, subject to a maximum daily payout limit of 20,000 [naira],” the bank said in an announcement.