Economists advise CBN to introduce N10,000 and N20,000 Notes

A new report 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 bills, to address the naira’s declining purchasing power and reduce the cost of cash transactions.

In the economic review titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, the firm warned that the naira’s persistent depreciation has made the current highest denomination, the N1,000 note, nearly useless in terms of real value.

“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 explained that the N5,000 note once proposed in 2012 would now be equivalent to about N50,000 due to a 94 per cent drop in the naira’s real value over the past 20 years.

They dismissed fears that introducing larger denominations could worsen inflation, describing the concern as “a myth unsupported by evidence.”

“Inflation is cost-push or demand-pull. Neither is related to currency denomination. Instead, countries introduce higher-value notes to maintain portability after a period of significant currency depreciation,” the report clarified.

When the N1,000 note debuted in 2005, it was valued at nearly $7 at the official exchange rate, but it is now worth less than 60 cents, highlighting the currency’s drastic fall.

Quartus Economics noted that this has made everyday transactions cumbersome, particularly in the informal sector, where cash use remains dominant.

The report further observed that printing and transporting lower-value notes had become increasingly expensive 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 stated.

Quartus Economics argued that introducing N10,000 and N20,000 notes, or carrying out a redenomination exercise, would make transactions easier, reduce printing costs, and bring Nigeria’s currency structure in line with other emerging markets.

It recalled that the CBN had planned to issue a N5,000 note in 2012 under then-Governor Sanusi Lamido Sanusi but dropped the proposal due to public opposition.

According to the firm, the same economic reasoning applies today given the naira’s steep decline.

“This proposal is not about printing more money,” the report noted, “but about modernising the naira’s denominations to reflect current economic realities.”

Quartus Economics said its estimate of the naira’s 94 per cent decline was based on the cost of key commodities, imported rice and domestic flight tickets.

The report noted that the price of a kilogram of rice has risen from N150 in 2005 to N2,500 today, while a flight from Lagos to Abuja now costs over N150,000, up from N12,000.

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“These indicators show how much the naira has lost its purchasing power, and a higher-value note is needed to make the naira portable again,” the report concluded.

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