CBN Urged to Introduce N10,000, N20,000 Banknotes to Tackle Inflation and Cash Shortages

Calls have intensified for the Central Bank of Nigeria (CBN) to introduce higher denominations — specifically N10,000 and N20,000 single notes — as part of efforts to address the rising cost of living, inflationary pressures, and transactional inefficiencies in the country’s cash-based economy.

Economists, financial analysts, and business operators have argued that the value of the naira has depreciated significantly in recent years, making existing denominations, particularly the N1,000 note, increasingly inadequate for large transactions. They said the introduction of higher-value notes would reflect the true state of the economy and reduce the strain on cash circulation.

Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), said the current denomination structure no longer aligns with Nigeria’s inflationary realities. “The naira’s purchasing power has fallen drastically. Carrying large volumes of cash to conduct transactions has become both inconvenient and unsafe. Introducing N10,000 and N20,000 notes would ease the pressure on cash users and enhance efficiency,” he said.

He added that while the push towards a cashless economy is commendable, Nigeria’s infrastructure and digital payment systems are not yet robust enough to sustain a fully cashless society, especially in rural areas. “The CBN must balance policy with practicality. Cash remains critical for millions of Nigerians who operate outside the digital banking system,” Yusuf noted.

Analysts also believe that introducing higher denominations would help reduce the cost of printing and managing physical currency. According to a recent report by the Currency Operations Department of the CBN, Nigeria spends billions of naira annually on printing, transporting, and replacing worn-out banknotes. With fewer notes required for large-value transactions, the operational cost of cash management could be significantly lowered.

However, some monetary experts have cautioned that introducing higher denominations could send the wrong signal about the economy’s inflation trajectory. Professor Uche Uwaleke, a capital market scholar, warned that such a move might be perceived as an admission of inflationary weakness. “While it may appear convenient, higher denominations could psychologically reinforce the perception that the naira is weakening. It’s a delicate policy decision that must be weighed carefully,” he explained.

Uwaleke further stressed that before any new currency issuance, the CBN should focus on stabilising the exchange rate and curbing inflation. “The introduction of N10,000 and N20,000 notes should not be seen as a solution to inflation but rather as a pragmatic response to its impact on currency usage. The real priority should be ensuring macroeconomic stability,” he said.

Business operators, particularly in the informal sector, have also expressed support for the proposal. Many traders and transport operators noted that carrying large sums of cash in smaller denominations has become impractical. A Lagos-based trader, Mrs. Olamide Adedeji, said: “When you go to buy goods worth N3 million, you end up carrying bags of money. Even the banks complain about handling so much cash. Bigger notes will make business easier.”

Similarly, transport operators across major cities have reported difficulties managing cash payments, with the current denominations leading to counting errors and transaction delays. They argue that higher-value notes would simplify daily business operations and reduce risks associated with carrying bulky cash.

Meanwhile, the CBN has not issued an official statement regarding the proposal. However, sources within the apex bank indicated that discussions about currency redesign and denomination review are ongoing as part of broader monetary reforms.

A senior CBN official, who spoke anonymously, said: “The Bank regularly reviews the currency structure in line with economic realities. While no decision has been made on introducing new denominations, we continue to assess the impact of inflation and technological adoption on cash usage.”

If implemented, the introduction of N10,000 and N20,000 notes would mark the first major expansion of Nigeria’s currency denomination structure since the N1,000 note was introduced in 2005. It could also complement efforts to withdraw old, mutilated notes and ease cash circulation challenges that have persisted since the 2023 naira redesign exercise.

However, some civil society organisations have urged the CBN to prioritise strengthening digital financial inclusion over printing new notes. They argue that higher denominations could potentially fuel corruption and money laundering by making it easier to move large sums undetected.

Economic analyst, Dr. Tope Fasua, offered a middle ground: “If the CBN decides to introduce higher denominations, it must do so alongside robust anti-money-laundering measures and increased promotion of electronic transactions. It should be about convenience, not encouraging cash hoarding.”

For many Nigerians grappling with rising prices, however, the call for higher-value naira notes reflects a broader frustration with inflation that has eroded the currency’s worth. Whether or not the CBN heeds the call, the debate underscores the urgent need for policies that restore confidence in the naira and ensure smoother transactions in both urban and rural economies.

As inflation hovers around double digits and the cost of goods continues to climb, stakeholders insist that revising the denomination structure may be a necessary, if temporary, measure to keep the cash economy functional — even as Nigeria gradually moves toward a more digital financial future.