A new economic review by Quartus Economics has urged the Central Bank of Nigeria (CBN) to introduce higher-value currency notes, such as N10,000 and N20,000 bills, 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 naira’s continued depreciation has made 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, which could have been introduced in 2012, would now be equivalent to a single N50,000 note today, reflecting a 94 per cent decline in the naira’s real value over the last two decades.
The report added that the idea that introducing higher-value notes could worsen inflation is a “myth unsupported by evidence,” noting 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 equivalent to nearly $7 at the official exchange rate. Today, it is worth less than 60 US cents, highlighting the naira’s sharp erosion in value.
Quartus Economics noted that this depreciation has made everyday transactions burdensome, especially in the informal sector, where cash remains dominant. Traders, artisans, and rural consumers now carry large amounts of cash for transactions that could easily be done with fewer higher-value notes.
The report also highlighted that the cost of printing, transporting, and securing lower-value notes has become prohibitive for the CBN.
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“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 argued that introducing N10,000 and N20,000 notes, or a broader redenomination exercise, would improve transaction efficiency, reduce printing costs, and align Nigeria’s currency structure with that of other emerging economies.
The PUNCH recalls that the CBN once proposed introducing a N5,000 note in 2012 under then-Governor Sanusi Lamido Sanusi, but the plan was abandoned after public opposition.
Quartus Economics now argues that the same policy logic remains valid more than a decade later, given the naira’s steep decline.
The firm emphasised that the proposed measure is not about “printing more money,” but about modernising the naira’s denominations to reflect current economic realities and make transactions more practical.
According to the report, the 94 per cent fall in the naira’s value was calculated using the cost of two essential items: a kilogramme of imported rice and a one-way flight ticket 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 risen from N12,000 to more than 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.#CBN
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