A new economic review by Quartus Economics has strongly advised the Central Bank of Nigeria (CBN) to introduce higher-denomination currency notes, specifically the ₦10,000 and ₦20,000 bills.
This measure is recommended to reverse the loss of the naira’s “portability” and alleviate the increasing operational costs associated with cash transactions.
The report, titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, asserted that the naira’s continuous depreciation has rendered the ₦1,000 note—the highest current denomination—essentially “practically obsolete” in terms of actual purchasing power.
To address this, the report stated, “To make the naira portable again, Nigeria can introduce higher-value bills, e.g.,10,000 or ₦20,000 notes, or redenominate the currency entirely.”
Analysts pointed out the dramatic erosion of the naira’s value over the past two decades: a ₦5,000 note, if it had been introduced in 2012 as once proposed, would now be equivalent to a single ₦50,000 note today. This illustrates the 94 per cent decline in the naira’s “real value.”
Quartus Economics directly addressed the common public concern that higher-value notes could worsen inflation, calling this a “myth unsupported by evidence.”
The report clarified that currency denomination is not a driver of inflation, which is instead caused by supply-side (cost-push) and demand-side (demand-pull) factors.
The report provided a clear explanation: “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.”
It further clarified: “Countries introduce higher-value notes to maintain portability after a period of significant currency depreciation, not to trigger inflation.”
The report highlighted how the massive drop in the naira’s value has complicated daily transactions, particularly in the large informal sector where cash is essential.
When the ₦1,000 note was first introduced in 2005, it was worth nearly $7 at the official rate; today, it is valued at less than 60 US cents.
This depreciation forces traders, artisans, and rural consumers to carry unwieldy “large volumes of cash” for transactions that should easily be manageable with a few higher-value notes.
The report argued that the naira’s current “heavy weight is a drag on the economy and slows down growth” outside of the formal sector and among the urban elite. Furthermore, the agency noted that the cost of printing, transporting, and securing “today’s low-value notes is prohibitive.”
Quartus Economics argued that introducing the ₦10,000 and ₦20,000 notes, or undertaking a full redenomination, would boost transaction efficiency, lower printing costs, and align Nigeria’s currency structure with that of other emerging economies.
The firm confirmed that the proposed measure is not about “printing more money,” but about modernizing the currency to reflect economic reality.
Using the cost of a kilogram of imported rice and a one-way Lagos-to-Abuja flight ticket as indicators, the report calculated the 94 per cent fall in the naira’s value since 2005.
Prices for these items have soared from approximately ₦150 and ₦12,000, respectively, to current averages ₦2,500 and over ₦150,000.
The report concluded, “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 analysts maintain that the policy logic that drove the discarded 2012 proposal to introduce a ₦5,000 note remains “valid more than a decade later.”
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