Economists Urge CBN to Introduce ₦10,000 and ₦20,000 Notes to Restore Naira’s Value

Nigeria’s weakening currency may soon require a major policy rethink, as a new report by Quartus Economics has urged the Central Bank of Nigeria (CBN) to introduce higher-value naira notes — specifically ₦10,000 and ₦20,000 denominations. The report argues that such a move is necessary to restore the naira’s portability, ease the burden of cash transactions, and reflect the country’s current economic realities.

Titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, the review warned that the naira’s sharp depreciation has rendered the ₦1,000 note — Nigeria’s highest denomination — nearly obsolete in purchasing power. When it was introduced in 2005, the ₦1,000 note was worth about $7; today, it’s valued at less than 60 US cents, illustrating the dramatic erosion of the currency’s real value.

The report dismissed claims that introducing higher-value notes would fuel inflation, calling such fears “a myth unsupported by evidence.” According to the economists, inflation in Nigeria is primarily driven by cost-push and demand-pull factors, not by the denomination of the currency itself. They argue that countries routinely issue higher notes after prolonged periods of currency depreciation — not to create inflation, but to maintain the practicality of daily transactions.

Beyond easing cash handling, the analysts said introducing larger notes would cut printing and transport costs for the CBN, which currently spends heavily on producing low-value currency. The lack of higher denominations, they noted, has hit the informal sector hardest — with traders, artisans, and rural consumers forced to carry bulky cash for even modest purchases.

Quartus Economics concluded that introducing ₦10,000 and ₦20,000 notes, or even redenominating the naira, could enhance transactional efficiency and modernize Nigeria’s currency system in line with global standards. The firm stressed that this proposal was not about “printing more money” but about modernizing the naira to reflect today’s economic realities. With prices of basic goods like rice and local flights rising by over 1,000% since 2005, the analysts said Nigeria’s monetary structure must evolve to keep pace.

source: Punch