A new economic report is urging the Central Bank of Nigeria (CBN) to introduce higher-value currency notes, such as N10,000 and N20,000 bills, to combat the severe decline in the naira’s purchasing power and restore its portability.
The review, conducted by Quartus Economics and titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, warns that persistent depreciation has rendered the N1,000 note—the country’s highest denomination—largely impractical for everyday transactions.
“To make the naira portable again, Nigeria can introduce higher-value bills, e.g., N10,000 or N20,000 notes, or redenominate the currency entirely,” the report stated.
The analysts highlighted the dramatic erosion of the naira’s value over the last two decades, calculating a 94 per cent decline in its real value. To illustrate this, the report noted that a N5,000 note, which was proposed back in 2012, would now need to be a N50,000 note to hold equivalent purchasing power today.
Dispelling Inflation Fears
Addressing the common concern that introducing higher denominations would fuel inflation, the report dismissed this as a “myth unsupported by evidence.” It clarified that inflation is driven by cost-push and demand-pull economic factors, not the face value of currency notes.
“Inflation is cost-push or demand-pull. Neither is related to currency denomination,” the report explained. “Instead, countries introduce higher-value notes to maintain portability after a period of significant currency depreciation, not to trigger inflation.”
When the N1,000 note was introduced in 2005, it was equivalent to nearly $7. Today, its value has crashed to less than 60 US cents, making cash transactions increasingly cumbersome. Quartus Economics pointed out that this reality places a heavy burden on Nigeria’s cash-dominant informal sector, forcing traders and consumers to carry bulky amounts of cash for routine purchases.
The report also argued that the continued printing and circulation of low-value notes have become economically inefficient for the CBN. “Outside the formal sector and the urban elite, the naira’s heavy weight is a drag on the economy and slows down growth. Besides, the cost of printing and transporting today’s low-value notes is prohibitive,” it said.
This is not the first time such a proposal has been floated. In 2012, then-CBN Governor Sanusi Lamido Sanusi advocated for the introduction of a N5,000 note, but the plan was ultimately shelved following public and political opposition. Quartus Economics argues that the economic rationale for that proposal is even more compelling today.
The firm stressed that its recommendation is not about “printing more money” to increase the money supply, but about modernizing the currency structure to reflect the current economic realities and make the naira practical for daily use again.
