Will the N10,000 and N20,000 Notes Solve Nigeria’s Cash Crunch?

Nigeria finds itself at another turning point in its currency policy, as calls mount for higher-denomination banknotes. On 12 November 2025, an editorial published by The Nation Newspaper Ltd. reported that the Central Bank of Nigeria (CBN) is under pressure to consider issuing new ₦10,000 and ₦20,000 notes. 

Why the push for higher-value notes?

A report by Quartus Economics titled “Is Africa’s Eagle Stuck or Soaring Back to Life?” argues that Nigeria’s current highest note — the ₦1,000 bill — has lost much of its practical purchasing power.  Here are the main reasons cited:

Loss of value: When the ₦1,000 note was introduced in 2005 it was worth nearly US $7 at the official rate; today it fetches less than US $0.60. 

Transactional burden: With inflation and depreciation, people are forced to carry large stacks of lower-denomination bills — especially in cash-intensive informal sectors. The report argues this erodes convenience and efficiency. 

Cost of cash handling: The printing, transporting, securing and managing of many lower-value notes is becoming increasingly expensive for the central bank and banking system. 

Modernisation argument: Introducing ₦10,000 and ₦20,000 notes (or even redenominating the currency) could bring Nigeria’s currency structure more in line with other emerging economies. 

Inflation concerns countered: The report, and similar commentary, claim the denomination of banknotes does not cause inflation (which is driven by cost-push and demand-pull factors). 

Who is opposing it — and why?

Not everyone is on board. Key stakeholders in Nigeria’s economy are raising alarms:

The Organised Private Sector (OPS) and the Nigeria Labour Congress (NLC) have described the move as elitist and untimely. They warn it could undermine the country’s push towards a cashless economy and potentially worsen inflation. 

Small-scale business operators argue that large denominations favour the wealthy (who carry large sums of cash) and further marginalise everyday citizens and informal traders. 

There is a concern that higher-value notes may facilitate illicit activity (money hoarding, corruption) and reduce transparency in transactions. The Nation editorial explicitly raised the risk of a boost to cash-based corruption if bigger bills are introduced. 

What are the implications?

For the average citizen and small business – On one hand, fewer bills to carry might ease transaction hassles. On the other hand, if wages and incomes remain stagnant, many people may see no real benefit, and in worst-case, feel further disadvantaged.

For the banking system and economy – Reduced cash-handling costs and fewer physical notes may aid efficiency. But if such reform is seen as a substitute for structural economic fixes (like tackling inflation, improving productivity), the benefits may not be realised.

For the currency and monetary policy – Introducing higher denominations without underlying economic stabilisation could send negative signals to markets about the health of the naira. As one comment piece noted: “Should CBN introduce higher naira denomination?” 

Key takeaways

The idea of issuing ₦10,000 and ₦20,000 notes stems from the observation that current banknotes no longer match economic reality.

While there are potential advantages (transaction convenience, cost savings), they are accompanied by significant risks (inflationary perception, favouring the wealthy, undermining digital payments).

Stakeholder consensus is weak: business and labour groups oppose the plan, while economic analysts push for it as a long-term adjustment.

Ultimately, the success or failure of such a reform will hinge on broader macroeconomic policies (inflation control, currency stability, financial inclusion) — not simply on printing larger bills.

What to watch

Will the CBN officially adopt the recommendation? As of now, the report is just that — a recommendation — and the central bank has not announced a decision. 

How will the public react if and when large denominations are introduced? Trust and perception matter.

How will this affect Nigeria’s cashless policy and digital-payment drive? A flip back toward cash may undermine earlier progress.

Will inflation, currency devaluation, and purchasing power trends shift significantly if the reform is implemented — and will the reform be enough without accompanying economic fixes?

In conclusion, the discussion over introducing ₦10,000 and ₦20,000 notes in Nigeria is not simply about “more money” — it’s about aligning currency with everyday realities, while balancing convenience, economic policy, equity and trust. Whether this move becomes a smart modernisation or a risky shortcut remains to be seen.