Nigeria’s high court docket halts botched plan to exchange forex notes


Nigeria’s highest court docket and the IMF have weighed into the botched plan to exchange the nation’s largest forex notes, a rollout that has induced chaos within the west African financial system simply weeks forward of a crunch basic election.

The Supreme Courtroom on Wednesday slapped a brief ban on the enforcement of the present deadline to exchange the N200, N500 and N1,000 notes on Friday, pending the listening to of a lawsuit introduced by three northern states difficult the brand new forex redesign. It adjourned that listening to till February 15.

The central financial institution, which is overseeing the introduction of the brand new notes, has already needed to lengthen the deadline to swap the outdated forex after shortages of the notes led to very large queues at banks throughout the nation.

The IMF additionally referred to as for Nigeria to permit extra time to finish the method, noting “issues” with the rollout. “Regardless of measures launched by the central financial institution to mitigate the challenges within the banknote swap course of, the IMF encourages the central financial institution to contemplate extending the deadline, ought to issues persist within the subsequent few days,” the US-based lender stated on Wednesday.

The trio of states took the federal authorities to court docket, arguing that the shortage of recent notes was inflicting extreme hardship and saying there had been “inadequate and unreasonable time” to finish the method. The states argued that “financial actions had been . . . grinding to a halt” on account of the forex redesign. The central financial institution declined to remark.

The interim order is the most recent twist within the chaotic rollout first introduced late final 12 months. The central financial institution stated on the time that the brand new notes could be safer, forestall counterfeiting and permit Nigeria to maneuver to a extra trendy card and digital payment-based financial system.

The notes had been unveiled in October however the central financial institution solely began supplying them to business lenders in December, resulting in a scarcity throughout a rustic the place most transactions are in money. The unique January 31 deadline for the outdated notes to stop being authorized tender had already been prolonged by 10 days earlier than Wednesday’s Supreme Courtroom ruling.

Lengthy queues have fashioned outdoors money machines and scuffles have damaged out in banking halls as clients jostled to withdraw cash forward of the deadline. There have been protests in components of the nation amid frustration over the unavailability of the notes.

Financial institution executives say they haven’t been provided with sufficient Naira to exchange the outdated ones which have been collected, estimated to be virtually N2tn. Nigerian anti-corruption companies and President Muhammadu Buhari have alleged that some banks are hoarding the brand new forex.

The go well with introduced by the states underscored the tensions inside the ruling All Progressives Congress (APC) forward of presidential and parliamentary elections to exchange the outgoing Buhari on February 25.

All three states are led by APC governors. Bola Tinubu, the APC candidate, has claimed that the controversy over the brand new notes is a ploy to derail his presidential marketing campaign.

Nasir Ahmad el-Rufai, governor of Kaduna, one of many states that filed the go well with and a Tinubu ally, stated on nationwide tv that unnamed “components in [Nigeria’s presidential palace] need us to lose the elections as a result of they didn’t get their means” throughout final 12 months’s occasion primaries.