A new economic review has called on the Central Bank of Nigeria (CBN) to introduce higher-value currency denominations — specifically N10,000 and N20,000 notes — to restore the naira’s portability and ease the rising cost of cash-based transactions.
The report, published by Quartus Economics and titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, argued that the naira’s sustained depreciation had rendered the N1,000 note — the nation’s highest denomination — practically useless in terms of real purchasing power.
“To make the naira portable again, Nigeria can introduce higher-value bills such as N10,000 or N20,000 notes, or alternatively, redenominate the currency entirely,” the analysts proposed.
According to the study, the naira’s real value has declined by about 94 per cent over the last two decades. It noted that the N5,000 note, once proposed in 2012, would today hold the equivalent purchasing power of a N50,000 note.
The report dismissed concerns that the introduction of higher-value denominations would worsen inflation, describing such fears as “a myth unsupported by empirical evidence.” It maintained that inflation was largely influenced by cost-push and demand-pull factors, not the face value of currency denominations.
“Countries introduce higher-value notes to maintain portability following prolonged currency depreciation, not to trigger inflation,” the report stated.
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 — a stark indicator of the naira’s decline.
Quartus Economics further observed that the depreciation had placed enormous strain on everyday transactions, particularly within the informal sector where cash remains dominant. Traders, artisans, and rural dwellers now carry bulky sums for simple transactions that could otherwise be simplified with higher-value notes.
The report also highlighted the rising costs associated with printing, transporting, and securing lower-denomination notes, describing them as “prohibitive” for the apex bank.
“Outside the formal sector, the naira’s sheer physical burden slows commerce and frustrates economic growth. Introducing N10,000 and N20,000 notes would improve transaction efficiency and reduce operational costs,” the analysts noted.
Quartus Economics maintained that Nigeria’s currency structure was long overdue for modernisation to align with those of other emerging economies. It added that the move would not mean “printing more money” but rather adjusting the denomination mix to reflect current economic realities.
The CBN had, in 2012 under then-Governor Sanusi Lamido Sanusi, proposed introducing a N5,000 note. However, the plan was abandoned after strong public opposition. Quartus Economics now insists that the rationale behind the proposal remains valid, especially as the naira continues to weaken.
The report calculated the 94 per cent loss in naira value using key price indicators — including a kilogram of imported rice, which rose from N150 in 2005 to N2,500 today, and a one-way flight from Lagos to Abuja, which increased from N12,000 to over N150,000.
“These figures show how drastically the naira has lost its purchasing power,” the report concluded. “Introducing higher-value notes is now a necessity, not an option, if Nigeria must restore confidence and convenience in its currency.”
