A new economic report by Quartus Economics has called on the Central Bank of Nigeria (CBN) to introduce higher-value currency notes — such as ₦10,000 and ₦20,000 bills — to restore the naira’s portability and reduce the increasing cost of cash-based transactions.
The report, titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, highlighted that the naira’s persistent depreciation has rendered the current ₦1,000 note, Nigeria’s highest denomination, almost worthless in real purchasing power.
“To make the naira portable again, Nigeria can introduce higher-value notes such as ₦10,000 or ₦20,000 bills, or alternatively, redenominate the currency entirely,” the report stated.
According to the analysts, a ₦5,000 note that was once proposed in 2012 would now hold the same value as a ₦50,000 note today, reflecting a 94 per cent loss in the naira’s real value over the past two decades.
The review also dismissed the widespread belief that introducing higher-value notes could trigger inflation, describing it as a “myth not supported by evidence.” The report explained that inflation is typically driven by cost-push and demand-pull factors, not by the denomination of a country’s currency.
“Inflation arises from production and demand factors, not from currency denominations. Higher-value notes are introduced to maintain portability after a period of currency depreciation, not to cause inflation,” Quartus Economics explained.
When the ₦1,000 note was first introduced in 2005, it was worth nearly $7 at the official exchange rate. Today, it is valued at less than 60 cents, underscoring the steep erosion of the naira’s worth.
The report observed that this decline has made everyday transactions cumbersome, especially within the informal sector, where cash remains the primary means of exchange. Many traders, artisans, and rural consumers now carry large amounts of cash for transactions that could be handled more easily with higher-value notes.
Quartus Economics also noted that the cost of printing, transporting, and securing lower-value notes has become excessively high for the CBN.
“Outside the formal sector and among urban elites, the naira’s physical bulk is a burden on the economy and slows down growth. The cost of printing and moving today’s low-value notes has become prohibitive,” the report said.
It further argued that introducing ₦10,000 and ₦20,000 notes, or embarking on a broader redenomination exercise, would enhance transaction efficiency, cut printing costs, and align Nigeria’s currency structure with that of other emerging economies.
The report recalled that in 2012, the CBN, under then-Governor Sanusi Lamido Sanusi, had proposed introducing a ₦5,000 note, but the plan was shelved after facing strong public criticism. Quartus Economics now insists that the same rationale remains valid, especially given the naira’s steep decline since then.
The firm clarified that the proposal is not about printing more money, but about modernising Nigeria’s currency system to reflect today’s economic realities and make cash transactions more practical.
The report’s analysis, which measured the naira’s 94 per cent loss in value, was based on the cost of essential goods — including a kilogram of imported rice and a one-way flight from Lagos to Abuja.
In 2005, a kilogram of rice sold for about ₦150, but now costs roughly ₦2,500, while a local flight ticket that once cost ₦12,000 now exceeds ₦150,000.
