CBN Urged to Introduce Higher-Value Notes as Naira Weakens

A new report by Quartus Economics has called on the Central Bank of Nigeria (CBN) to introduce higher-value currency notes to address the naira’s declining purchasing power and improve cash convenience across the country.

The report, titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, described the proposal as a realistic response to the naira’s persistent fall in value, which has made the ₦1,000 note “practically obsolete in real terms.”

According to the economic analysts, a ₦5,000 note once proposed in 2012 would now equate to a ₦50,000 note in today’s value due to a 94 percent drop in the naira’s real worth over the last two decades.

“Countries introduce higher-value notes to maintain portability after a period of significant currency depreciation, not to trigger inflation,” the report clarified.

The analysts dismissed public concerns that introducing higher denominations would worsen inflation.

They described such fears as “a myth unsupported by evidence,” arguing that inflation is driven by cost-push and demand-pull factors rather than the denomination of the currency.

They explained that the move would actually make the CBN higher-value naira notes more practical and efficient, especially in the informal sector where cash transactions dominate.

“When the ₦1,000 note was introduced in 2005, it was worth about $7,” the report stated. “Today, it is valued at less than 60 US cents.”

Furthermore, Quartus Economics noted that the depreciation has made everyday transactions cumbersome, as Nigerians now carry large volumes of cash for routine purchases.

Traders, artisans, and rural consumers, in particular, face difficulties conducting business efficiently.

The report also highlighted that the cost of printing, transporting, and securing lower-value notes has become a major financial strain 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,” the study warned.

The analysts recommended that the CBN either introduce ₦10,000 and ₦20,000 notes or consider a complete redenomination of the naira to reflect current realities.

They argued that the adjustment would enhance transaction efficiency, reduce printing costs, and align Nigeria’s currency structure with those of other emerging economies.

“The proposed measure is not about printing more money, but about modernising the naira to reflect present economic realities,” the report stressed.

The call for higher-value notes is not entirely new. The CBN had earlier proposed a ₦5,000 note in 2012 during the tenure of former Governor Sanusi Lamido Sanusi, but the idea was dropped after public opposition.

Quartus Economics insists the logic behind that policy remains valid, especially now that inflation and exchange rate pressures have deepened.

To illustrate the naira’s collapse in value, the report compared prices of common goods noting that a kilogram of imported rice, which cost ₦150 in 2005, now sells for ₦2,500, while domestic flight tickets have risen from ₦12,000 to ₦150,000.

“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 concluded.