Legality of the New Naira Policy_ Reviewing the CBN Act and the Supreme Court Judgment




Over the years, the Nigerian legal tender has been redesigned a lot of times and for different reasons.  The redesign of currency is so important in any nation that it has been recommended as international best practice required of central banks all around the world to redesign banknotes every five to eight years. Accordingly, on October 26, 2022, Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), announced that the country’s apex bank would be redesigning the N200, N500 and N1,000 notes.  The redesign of the naira note as expressed by the CBN governor was intended to bring about good changes and decrease in crime and corruption. However, the nobility of an idea or action can be counterfeited if the approach brings about intolerable hardship on people. Regrettably, the CBN policy caused widespread chaos across the nation, as frustrated Nigerians staged protests amid poor banking operations. 

Legally speaking, all policies and programmes of government should be tailored towards the provisions of section 14 (2) (b) of the Constitution of the Federal Republic of Nigeria, 1999 which states that the security and welfare of the people shall be the primary purpose of the government. In other words, all plans and actions of the government at any point in time should be targeted towards achieving the common good.

However, even while we may all agree that the policy worked hardship on the people, we must also state that the naira redesign policy opened the doorway for the development of law. Since the naira redesign policy worked hardship on the people, both lawyers and average citizens have turned to the constitution to determine whether the action of the CBN and the judgement of the supreme court is legal and acceptable in a democratic society.

The power play between the President and the Supreme court did not escape the prying eyes of innocent citizens, seeing how people were reluctant to spend and receive the old naira note despite the recent judgement of the Supreme court. This article aims to examine the legality of the new naira note by reviewing the CBN ACT and the Supreme court decision. 

The Review of the CBN Act 

The Central Bank of Nigeria Act 2007 as an act of the National House of Assembly established the Central Bank of Nigeria by the first section of the Act. The Act also gives states the power and the functions of the CBN. 

One of the prominent functions of the CBN in relation to the new naira redesign policy is provided in Section 2(b) of the Act, which provides that the CBN can issue legal tender currency in Nigeria. To further strengthen the power of the CBN to make legal tender currency, the Act provides in sections 17, 18, and 19 the autonomy of power in carrying out these duties to the exclusion of other bodies. 

Although the aforementioned sections gave the CBN great powers, it also provided for checks and balances by virtue of section 20 (3). The President’s position as the approving authority on currency change is enshrined in 20 (3) of the CBN Act, 2007. In  other words, whereas the CBN is the adviser, the designer and the implementer of the naira redesign policy, the onus is squarely on the President  to approve. 

From the above review of the CBN Act, it can be submitted that the CBN was legally right to have initiated a naira redesign if it was of the view that such a policy will strengthen the economy of the country. Also, the President is empowered by the Act to authorise the same.

Accordingly, the bulk of the issue is not about whether or not the CBN had the power to redesign the naira note or the President’s right to authorise the same. The issues surrounding the new naira design began with scarcity of cash, the judgement of the Supreme court and the action of the President thereafter. 

A Review of the Supreme Court Judgement

Following a suit by interested parties regarding the CBN’s naira redesign policy, the Supreme court gave a judgement. The leading judgement stated that although the  CBN Act does not expressly state that the President must hold consultation with the Council of states and the National Economic Council without prior notice or giving reasonable notice to the public, the duty is implicit in section 5 of the Constitution of the federal republic of Nigeria that makes the President an agent of the federation. Such duty is inherent in a democracy. Also, that there is nothing to show either through newspapers and gazette that reasonable notice was given to the public and was therefore in violation of section 20(3) of the CBN Act. Notice was given only by way of press remark by CBN governors on 26 October 2022. 

On the 8th of February, the Supreme Court intervened in the new naira policy on the basis of the suit brought by three state governments – Kaduna, Kogi, and Zamfara – citing the hardships the continued scarcity of naira notes brought to the people by granting an interim order restraining the CBN from stopping the use of the old naira notes of N200, N500 and N1000 until the 15th of February, 2023 when the suit might be fully heard. 

A few days after, the President gave an order that only the 200 naira old note is to be accepted as legal tender, thereby making a contradictory order different from the one given by the court. This blatant disregard of the court order led to a lot of debate on the legality of the judgement and the propriety of the President’s action. When it comes to the question of legality of a court judgement, some salient points must be noted and discussed. These salient issues will be discussed in subsequent paragraphs. 

The Jurisdiction of the Supreme Court.

Prominent among the defence raised by the defence council over the new naira suit is the preliminary objection stating that the  Supreme Court lacks jurisdiction to hear the case and that the case is not within the ambit of the original jurisdiction of the court.

When it comes to the question of legality of a court decision, the issue of jurisdiction readily comes to play. In the popular case of Madukolu v Nkemdilim The Supreme Court of Nigeria decided that a court is incompetent and without jurisdiction where any or all the conditions precedent for assuming jurisdiction are absent. A court is only competent when –

a. It is properly constituted with respect to the members and qualifications of its members;

b. The subject matter of the action is within its jurisdiction;

c. The action is initiated by due process of law; 

d. Any condition precedent for the exercise of its jurisdiction has been fulfilled.

In the extant case, the preliminary objection of the defendant is that there have been more pointers to the absence of paragraph b in the above listed because the Supreme court lacked  jurisdiction as it relates to subject matter. 

Chapter 7 of the CFRN provides for the judicial arm of government with respect to the establishment and jurisdiction of the court. The opening section establishes the apex court referred to  as the Supreme court of nigeria while section 232 confers the original jurisdiction of the Supreme court. The section  states; 

The Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute between the Federation and a state or between states if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends. 

By the provisions s. 232 (2), the National Assembly extended the Supreme Court’s Original jurisdiction to adjudicate on any disputes arising from law or facts between the National Assembly and the President; the National Assembly and any state House of Assembly; and the National Assembly and a state of the federation.

The Supreme Court itself has held in a plethora of  cases that it is not the parties alone that matters in deciding the jurisdiction of the court, the subject matter of conflict is at all time material and worthy of consideration.

However, Justice Agim in delivering that lead judgement stated that the dispute is between the states and the government of the Federation and therefore within the original jurisdiction of the court. He also further stated that the suit challenges the validity of the decision of the President to redesign naira, release the new notes into circulation and withdraw the old notes without consultation with Nigerians through the Council of states and the National Economic Council. Also, without prior notice or giving reasonable notice to the public. In addition, the Supreme court made reference to the  practices in other nations as it relates to currency redesign. The Court stated that in other countries, old and new currency notes are allowed to circulate simultaneously for not less than one year.

On the strength of the above argument, the Supreme court extended the deadline for the phasing out of the old naira note till December 31st, 2023.


The Supreme court judgement is very commendable and wise considering the logic and soundness of the judgement. However, it is not infallible. From the review of the sections of the CBN Act mentioned in this article along with the suit by some states of the federation, it is submitted that the CBN should have been added as a party to the suit. This is because it would be affected by the Supreme court judgement and it played an active role in the naira redesign. Treating the new naira policy as the sole act of the President might be seen as a clever attempt by the Supreme Court to sustain the suit instead of dismissing the suit.  On a final note, it is safe to conclude that to all intents and purposes, the new naira policy is justifiable, but the approach was improper.  




  1. Esegi Maureen, Nigeria: Naira resign policy: what you need to know. Available at . Accessed on 30th March, 2023.
  2. Tola Owoyele, 14 times Nigeria redesigned banknotes in the past.  Available at .  Accessed on 30th March, 2023. 
  3. Ibid
  4. Ayodeji Ayogboyega, Mary Izuaka, Naira redesign mixed reactions trail CBN directive as bank struggle to meet customers demands. Available at . Accessed on 30th March, 2023. 
  5. Waziri Adio, Naira redesign policy and execution flaws. Accessed on . Accessed at 30th March, 2023. 
  6. Constitution of the Federal Republic of Nigeria, 1999  as altered
  7. Ebun-Oluwa Adegboruwa, The naira redesign policy. Available at . Accessed on 30th March, 2023. 
  8. Ade Adesomoju and Ameh Ejekwonyilo (Premium Times) accessed 30th march, 2023.
  9. Madukolu v Nkemdilim (1962) 2 SCNLR 341
  10. The Constitutional Juridiction of a Court in Nigeria. Available at Accessed 30th March, 2023.

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