Research form, 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.
According to the organisation, this will help to restore the naira’s portability and reduce the rising cost of cash transactions.
In its latest report titled “Is Africa’s Eagle Stuck or Soaring Back to Life?”, Quartus Economics pointed out that the naira’s continued depreciation had rendered the N1,000 note, the country’s highest denomination, practically obsolete in terms of purchasing power.
It said Nigeria can introduce higher-value bills, e.g., N10,000 or N20,000 notes, or redenominate the currency entirely, to make the naira portable again.
According to the analysts, a N5,000 note that would have been introduced in 2012 would now be equivalent to a single N50,000 note today, reflecting the 94 per cent decline in the naira’s real value over the last two decades.
It added that the notion that introducing higher-value notes could worsen inflation was a “myth unsupported by evidence,” explaining that inflation is driven by cost-push and demand-pull factors, not by currency denomination.
“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.
“Countries introduce higher-value notes to maintain portability after a period of significant currency depreciation, not to trigger inflation,” the report noted.
It further pointed out that when the N1,000 note was introduced in 2005, it was equivalent to nearly $7 at the official exchange rate. Today, it is worth less than 60 US cents, underscoring the naira’s sharp erosion in value.
Quartus Economics said this depreciation has made everyday transactions burdensome, particularly in the informal sector, where cash remains dominant.
“Traders, artisans, and rural consumers now carry large volumes of cash for transactions that could easily be done with a few higher-value notes,” the report noted, even as it said the cost of printing, transporting, and securing lower-value notes had become prohibitive 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,” the report said.
It argued that the introduction of N10,000 and N20,000 notes, or a broader redenomination exercise, would improve transaction efficiency, reduce printing costs, and align Nigeria’s currency structure with that of other emerging economies.
According to the research firm, the proposed measure is not about “printing more money”, but about modernising the naira’s denominations to reflect current economic realities and make transactions more practical.
The report indicated that the 94 per cent fall in the naira’s value was calculated using the cost of two essential items, a kilogramme of imported rice and a one-way flight ticket from Lagos to Abuja.
From about N150 per kilogram of rice in 2005, the price now averages N2,500, while the cost of a local flight has risen from N12,000 to more than N150,000.
“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 added.
