A new economic review by Quartus Economics has called on the Central Bank of Nigeria (CBN) to introduce higher-value currency notes such as N10,000 and N20,000 to restore the naira’s portability and reduce the rising cost of cash transactions.
The report, titled “Is Africa’s Eagle Stuck or Soaring Back to Life?” warned that the continued depreciation of the naira had rendered the N1,000 note, the country’s highest denomination, practically obsolete in terms of purchasing power.
“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.
Analysts explained that a N5,000 note that could have been introduced in 2012 would now be equivalent to a single N50,000 note today, reflecting a 94 percent decline in the naira’s real value over the past two decades.
The report dismissed claims that issuing higher-value notes could worsen inflation, describing such assumptions as a “myth unsupported by evidence,” and noted that inflation is driven by cost-push and demand-pull factors, not by currency denomination.
“Inflation is cost-push or demand-pull. Neither is related to currency denomination. Instead, countries introduce higher notes to maintain portability after an era of currency depreciation.
“Countries introduce higher-value notes to maintain portability after a period of significant currency depreciation, not to trigger inflation,” the report clarified.
When the N1,000 note was introduced in 2005, it was worth nearly $7 at the official exchange rate. Today, it is valued at less than 60 US cents, underscoring the sharp erosion of the naira’s value.
Quartus Economics observed that this depreciation has made everyday transactions more cumbersome, especially in the informal sector, where cash remains dominant. Many traders, artisans, and rural consumers now carry large volumes of cash for transactions that could be simplified with higher-value notes.
The report also highlighted the growing expense of printing, transporting, and securing lower-value notes, describing it as a significant burden on 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,” the report said.
It further argued that introducing N10,000 and N20,000 notes, or undertaking a broader redenomination exercise, would enhance transaction efficiency, lower printing costs, and bring Nigeria’s currency structure in line with other emerging economies.
It recalls that the CBN once proposed a N5,000 note in 2012 under then-Governor Sanusi Lamido Sanusi, but the plan was dropped following public opposition.
Quartus Economics maintained that the same rationale for the proposal remains relevant today, given the naira’s steep decline.
The firm emphasised that the proposed move was not about “printing more money,” but about modernising the naira’s denominations to reflect current economic realities and make daily transactions more practical.
According to the report, the 94 percent fall in the naira’s value was measured using the cost of two essential items — a kilogram of imported rice and a one-way flight from Lagos to Abuja.
From about N150 per kilogram of rice in 2005, the price now averages N2,500, while the cost of a local flight has surged from N12,000 to over N150,000.
“These indicators show how much the naira has lost its purchasing power, and a higher-value note is needed to make the naira portable,” the report added.