Economists Urges CBN to Introduce ₦10,000 and ₦20,000 Notes to Restore Naira’s Value
A recent economic review by Quartus Economics has called on the Central Bank of Nigeria (CBN) to introduce ₦10,000 and ₦20,000 banknotes as part of broader measures to restore the naira’s portability and transactional efficiency amid rising inflation.
The report, released this week, noted that the cost of handling cash in Nigeria has surged drastically due to inflation and the limited denominations in circulation. According to the analysts, introducing higher-value notes would reduce transaction bulk, lower logistics expenses, and increase convenience for businesses and consumers.
Why Higher-Value Currency Notes Are Needed
The report by Quartus Economics explained that Nigeria’s current currency structure—where the highest denomination remains ₦1,000, introduced in 2005—no longer reflects the nation’s economic reality.
“With the steady depreciation of the naira and persistent inflation, the value of ₦1,000 today is less than ₦100 was two decades ago. The purchasing power erosion justifies the introduction of ₦10,000 and ₦20,000 notes,” the report stated.
Experts say such a move would not only restore the naira’s practicality for large transactions but also reduce wear and tear on lower denominations frequently used for bulk payments.
Impact on Cash Transactions and Financial Logistics
The review highlighted how the rising cost of cash logistics—from bank ATM operations to interbank transfers—has affected both financial institutions and small businesses.
Higher-value denominations, it argued, could:
- Cut down the volume of cash needed for daily transactions,
- Lower printing and distribution costs for the CBN, and
- Enhance the efficiency of cash-based commerce, particularly in areas with limited access to digital banking.
According to Quartus Economics, the average cost of transporting ₦10 million in ₦1,000 notes has increased by more than 70% due to inflation and security-related expenses.
Concerns About Inflation and Counterfeiting
However, the proposal has drawn mixed reactions from financial experts and economists. Some fear that introducing ₦10,000 and ₦20,000 notes could fuel inflation if not properly managed, while others worry about the risk of counterfeiting.
Dr. Amina Yusuf, a financial analyst, warned:
“If higher notes are introduced without tightening monetary policy and improving money supply control, it could worsen inflationary pressures. The CBN must balance convenience with macroeconomic stability.”
Nonetheless, others argue that inflation is driven more by poor fiscal discipline and structural bottlenecks, not the denomination of currency itself.
Lessons from Other Economies
Quartus Economics cited examples from countries like India, Indonesia, and South Africa, which have periodically introduced higher-value banknotes to reflect inflation-adjusted realities.
The report emphasized that such moves—if combined with strong anti-counterfeiting technology and public awareness campaigns—can modernize national currency systems without destabilizing the economy.
CBN Yet to Comment
As of publication time, the Central Bank of Nigeria has not officially responded to the Quartus Economics report. However, sources within the apex bank suggest that currency restructuring is one of several ongoing policy discussions under the naira stabilization and cash management reforms.
The last major redesign of the naira occurred in 2023, when the CBN introduced updated ₦200, ₦500, and ₦1,000 notes to curb counterfeiting and encourage digital payments.
Conclusion
The call for the introduction of ₦10,000 and ₦20,000 notes by Quartus Economics has reignited debate about the future of Nigeria’s cash economy. While supporters see it as a practical response to inflation and rising transaction costs, critics caution against potential inflationary risks.
As Nigeria continues to balance between cash-based and digital transactions, the CBN’s decision on this proposalcould shape how businesses and individuals handle money in the coming years.
About Author
