A recent economic review by Quartus Economics has called on the Central Bank of Nigeria (CBN) to introduce higher-denomination currency notes, such as N10,000 and N20,000 bills, to restore the naira’s portability and reduce the escalating cost of cash transactions.
The report, titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, highlighted that the continued depreciation of the naira has rendered the N1,000 note, Nigeria’s highest denomination, almost obsolete in purchasing power.
“To make the naira portable again, Nigeria could introduce higher-value bills, e.g., N10,000 or N20,000 notes, or even consider a full redenomination of the currency,” the report stated.
Analysts noted that a N5,000 note introduced in 2012 would now be equivalent to a N50,000 note today, reflecting a 94% decline in the naira’s real value over the past two decades.
The report also dismissed concerns that higher-value notes could worsen inflation, describing it as a “myth unsupported by evidence.” According to the analysis, inflation is driven by cost-push and demand-pull factors, not by the denomination of currency.
“Countries introduce higher-value notes to maintain portability after significant currency depreciation, not to trigger inflation,” the report explained.
When the N1,000 note was introduced in 2005, it was worth nearly $7 at the official exchange rate. Today, it is worth less than 60 US cents, underscoring the naira’s sharp decline in value.
The report emphasized that the depreciation has made daily transactions cumbersome, especially in the informal sector, where cash remains dominant. Traders, artisans, and rural consumers often carry large amounts of cash for transactions that could be handled more efficiently with higher-value notes.
Additionally, printing, transporting, and securing lower-denomination notes has become increasingly costly for the CBN.
“Outside the formal sector and the urban elite, the naira’s heavy weight is a drag on the economy and slows growth. Moreover, the cost of printing and transporting low-value notes is prohibitive,” the report noted.
Quartus Economics concluded that introducing N10,000 and N20,000 notes, or conducting a broader redenomination exercise, would enhance transaction efficiency, lower printing costs, and bring Nigeria’s currency system in line with other emerging economies. The analysts argued that this policy remains relevant given the naira’s continued steep decline.
