Nigeria is grappling with a silent but potent economic and social crisis: the acute shortage of lower denominations of the Naira in circulation. This scarcity is not a mere inconvenience — it is stoking inflationary pressures, exacerbating tensions at the grassroots, and threatening the stability of an already fragile economy.
Across the country, the impact of this shortage is palpable. School children are being delayed on the road and arrive in school late as commercial drivers and bus conductors insist these vulnerable leaders of tomorrow are told to hold their exact dates to board public transport. Commercial transport operators, such as Okada riders and tricycle drivers, are rounding up fares from N150 to N200, not out of greed, but due to the sheer difficulty of finding N50, N20, or N10 notes to provide change. Pepper grinders now demand N100, N200 for quantities of pepper they would ordinarily charge N50 or N120. While this might be nothing or trivial to the Nigerian elites, it is a real existential crisis for the poor masses. This phenomenon is driving up costs for ordinary Nigerians, particularly the masses who rely on these small transactions for daily survival. The resulting friction between operators and customers is escalating social tensions nationwide, a warning sign that the government cannot afford to ignore.
The Central Bank of Nigeria (CBN) and the administration of President Bola Ahmed Tinubu must act swiftly to avert a brewing national conflagration.
One might argue that printing higher denominations — like the N1000, N500, and N200 notes — offers a quick fix. After all, these are the notes predominantly dispensed by banks and POS operators today. However, this approach is shortsighted and counterproductive. Flooding the economy with high-value notes undermines the government’s stated goal of reducing cash dependency — a cornerstone of modern economic management. Worse still, it fuels a range of societal ills. Kidnapping for ransom, armed robbery, and other cash-driven crimes thrive on the availability of large denominations, which offer criminals untraceable wealth in compact form. Hoarding of these notes keeps money out of the formal financial system, hobbling the CBN’s ability to regulate cash flow and combat inflation. Corruption, too, flourishes in this cash-heavy environment, as officials demand bribes and politicians amass war chests for vote buying—practices that erode nation-building and development.
The solution lies not in perpetuating this cycle but in breaking it. The CBN should recall the N1000, N500 and N200 notes from circulation and cap the highest freely available denomination at N100. Simultaneously, it must flood the market with N5, N10, N20 and N50 notes, ensuring that ATMs and POS systems dispense these lower denominations.
This shift would align Nigeria with developed economies like the United States and the United Kingdom, where high-value notes are reserved for accounting purposes within banking systems, not everyday use. These nations learned the hard way that circulating large denominations fuels crime and economic distortion — a lesson Nigeria must heed.
Admittedly, printing and distributing lower denominations may seem costlier in the short term. Yet, the long-term benefits far outweigh these expenses. By curbing inflation, reducing cash-based crime and fostering trust at the grassroots, this policy would stabilise the economy and avert a social crisis. It would also reinforce the push toward a less cash-dependent society, bringing more transactions into the formal financial system where they can be tracked and regulated.
President Tinubu’s administration has an opportunity to act decisively. The CBN must recalibrate its cash circulation strategy to prioritise the needs of the masses over expedient fixes. Nigeria’s future — its economic health, social harmony, and national development —depends on it. The time to rein in higher denominations of the Naira is now.
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