ATTORNEY-GENERAL OF KADUNA STATE V. ATTORNEY-GENERAL OF THE (2023)

Background

This case revolves around the disputes initiated by several state attorneys-general against the Attorney-General of the Federation regarding the demonetization directive issued by the President of Nigeria. This presidential policy aimed to withdraw certain denominations of the naira notes from circulation and introduce new designs. The plaintiffs contended that this action was executed without proper consultations as stipulated by the Constitution of Nigeria.

Issues

The Supreme Court considered multiple issues pertaining to the legality and implications of the president's directive:

1. Is the demonetization directive consistent with the constitutional provisions governing the executive powers of the President?
2. Did the President adequately fulfill the consultation requirements with relevant councils before issuing the directive?
3. Did the directive impede the executive powers of the constituent states?
4. Was the notice period given for the transition to the new currency sufficient and lawful?
5. What are the consequences of disobeying a judicial order regarding this directive?

Ratio Decidendi

The court ruled in favor of the plaintiffs, concluding that the President's directive was unconstitutional as it:

1. Failed to consult the National Council of States and other relevant bodies, a requirement rooted in the principles of federalism.
2. Did not provide adequate notice for the demonetization process, violating Section 20(3) of the Central Bank of Nigeria Act, 2007.
3. Impeded the rights and executive powers of the plaintiff states, thereby disrupting their administrative functions.

Court Findings

The court found that:

• The directive resulted in severe economic disruptions, including long queues at banks and limited access to funds for citizens.
• The President's lack of consultation with influential stakeholders undercut the legitimacy of the directive.
• A failure to ensure that citizens could access sufficient new currency alongside the old notes amplified confusion, effectively undermining the government's monetary policy goals.

Conclusion

The Supreme Court ruled that the President's directive on currency demonetization was invalid due to procedural failures in the execution of this critical monetary policy.

Significance

This ruling sets a crucial precedent about the limits of executive power in Nigeria, particularly in relation to policies with significant impacts on state governance and the economy. It underscores the importance of consultation and adherence to constitutional frameworks when implementing major financial directives and highlights the role of the judiciary in upholding the rule of law and protecting the rights of the constituent states.