The Supreme Court of Nigeria has ruled that the circulation of old Nigerian naira banknotes extends until the end of the year, deeming the naira redesign policy invalid.
According to the Supreme Court justices, while adopting the initiative on introducing new naira banknotes, the correctness of the process had been violated.
"The directive given by President is invalid. Such directive is not just handed down after personal conversation with the governor of CBN," Justice Emmanuel Agim said.
The old banknotes were replaced by new ones in mid-December last year, following the announcement of such a policy in October, It was designed to bring down inflation, control the circulation of money, and make ransom payments for illegal activities more difficult, the Nigerian Central Bank said.
However, the redesign reform eventually led to a lack of new notes, and resulted in cash scarcity across the nation and huge lines outside banks, local media said.
Earlier, the Supreme Court of Nigeria temporarily suspended the deadline for the transition to the new banknotes, which was initially set for February 10, 2023.
The decision followed a lawsuit filed by the states of Kaduna, Zamfara, and Kogi against the federal government in order to stop the transition due to the problems it caused.
A few days after the suspension of the transition, Nigerian President Muhammadu Buhari directed the CBN to extend the use of the old banknotes for 60 days, allowing them to co-exist with the new ones.
"To further ease the supply pressures particularly to our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10 to April 10 when the old N200 notes ceases to be legal tender," Buhari said.
The president also apologized to Nigerians, as many of them encountered numerous obstacles triggered by the redesign policy implementation.