Currency Shock in a Fragile Economy
A new debate is brewing around Nigeria’s monetary policy as reports surfaced of a Central Bank proposal to issue a ₦20,000 note, sparking outrage among business leaders and labour unions.
The measure, reportedly under internal review at the apex bank, is aimed at “catering to high-value cash transactions” and “easing liquidity constraints.”
“The timing is terrible. Printing bigger notes doesn’t solve inflation — it announces it.”
— Dr. Bismarck Rewane, Financial Derivatives
But critics say the move could undermine the government’s anti-inflation drive, reverse gains from the cashless policy, and send a wrong signal to investors already wary of policy inconsistencies.
“It is a dangerous policy detour that could trigger another inflation spiral,” said Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE).
“At a time when we are fighting currency depreciation, introducing higher denominations is the wrong message.”
OPS, Labour, and Economic Backlash
The Organised Private Sector (OPS) led by NECA and MAN said the proposed ₦20,000 note would “further weaken naira credibility” and expand the shadow economy.
They urged the Central Bank to instead focus on stabilising FX inflows and curbing money supply growth.
“We reject any policy that worsens poverty under the guise of convenience.”
— Benson Upah, NLC Spokesperson
The Nigeria Labour Congress (NLC) joined the chorus of dissent, describing the idea as “tone-deaf to the hardship of Nigerians.”
“What we need are price controls, wage reviews, and inflation management — not higher denominations that will make ordinary Nigerians poorer,” said NLC spokesperson Benson Upah.
Monetary experts argue that higher denomination notes often reflect declining purchasing power and low trust in fiscal discipline.
Dr. Bismarck Rewane of Financial Derivatives called the plan “a prelude to hyperinflation,” noting that printing higher-value notes historically precedes economic distress.
Policy Reversal Risks
- Inflation Spiral: Analysts predict a sharp increase in money circulation, fuelling inflation expectations.
- Cashless Setback: The move could derail ongoing digital payment adoption and financial inclusion progress.
- Public Distrust: Perceived policy inconsistency could weaken confidence in the Central Bank’s reform credibility.
- Political Optics: The proposal risks being seen as populist and anti-reform, potentially triggering international backlash.
Currency Trust and Market Psychology
This controversy underscores Nigeria’s toughest macroeconomic challenge — rebuilding public trust in policy.
For investors, the proposed ₦20,000 note raises questions about the sustainability of recent fiscal and monetary alignment between the CBN and the Presidency.
Economists insist the real solution lies in tightening monetary control, boosting productivity, and expanding digital finance infrastructure rather than expanding the note base
This is IDNN. Independent. Digital. Uncompromising.
