Open letter to the President: Time is ripe for introduction of N5,000 & N2,000 notes

Open letter to the President: Time is ripe for introduction of N5,000 & N2,000 notes

My President; this is my second letter in six (6) months to Your Excellency on this key issue and hope it meets you well, Sir. Without doubt, since your inauguration as President, Commander-in- Chief, Armed Forces, Federal Republic of Nigeria, Nigeria has graciously and boldly moved to assume her rightful place as the largest economy in Sub-Saharan African. And, coupled with nation audacious population, we’ve equally taken our place as the authentic giant of African continent.

This Year 2025 historic Appropriation Bill of N59.44 Trillion, coming on the heels of the immediate past Year (2024) of N28.78 Trillion have unequivocally proved that Nigeria economy has moved rapidly, over the two years. It’s a fact we must accept.

With the quantum of liquidity that would flow this fiscal year into the economy from all directions on account of the AUDACIOUS budget, it’s no brainer that the existing naira notes denomination with the highest at N1000 would no longer provide necessary support for economy.

If we continue with this arrangement, the country would be disregarding the basic law of economics that emphasizes that a country currency basically reflects her strength.

And, the continual in-action in this respect would continually be at economy and nation’s peril! Instructively, in recent times’ market capitalization oscillates between N67 trillion and N68 trillion mark, a marked indication that investment market has grown in leap and bounds, particularly, from the position of years 2020-2022 when it was swinging between N15 -N16 trillion mark, a stunning percentage growth of about 320%.

Your Excellency, is it justifiable the nation still maintain the existing arrangement of N1000 highest naira note denomination without creating disequilibrium and imbalance between the quantum of money supply in the economy and currency denomination in the face of above reality?

Sir, the government bold reforms in Oil & Gas sector, as well as that of liberalizing the Forex market have attracted applaud, even from unusual quarters-World Bank, as well international community, including the globally recognized Fitch rating.

The reforms initiated by the CBN have helped narrow the gap between the official and alternative markets, as well as assisted in restoring market confidence and encouraged increased autonomous forex inflows through official channels, which ultimately has assisted broadening Nigeria’s foreign exchange earnings and sources beyond oil, with foreign reserves account presently stand at $38 billion.

But, at present, the domestic currency to dollars still swings between N1600 and N1615.

On the other hands, reforms in Oil & Gas have helped in totally restructuring and repositioning the NNPCL for results, as well as totally fortifying the security architecture in the Niger Delta Region, with particular reference to engagement of Tantita Security outfit to halt the theft of crude on the deep sea, with the ultimate effect in the significant increase in oil revenue to the FAAC, following increase in crude production.

But, the effect of oil subsidy removal has really not abated, as PMS still hovers between ₦900 in Lagos and ₦936 in Abuja as at May 13, 2025.

The implications of the above analysis remains: the nation can no longer operate with ₦1000 as the highest denomination, as it doesn’t sufficiently reflects the country position.

Your Excellency, against the backdrop of the above reality and statistics, continual maintaining the existing arrangement of ₦1000 denomination note as highest, would obviously be injurious and inimical to the economy.

Cement price goes for average of about ₦8,500 and ₦10,500 in May 2025, a quantum leap from about ₦3,200-₦3500 in year 2022, an increase of more than 200%.

Astronomical increase has also been recorded on all other building materials-sands, gravels, blocks, steel reinforcement, timber, paints and finishing, with some hitting 250% and others go as much as 300%, yet, the currency highest denomination remains at N1,000.

Central Bank of Nigeria (CBN) recently rolled out new charges on ATM withdrawals with N100 per N20,000 withdrawal at on-site ATMs and an additional surcharge of up to N500 per N20,000 at off-site ATMs. This  directive takes effect from March 01.The Apex Bank has been generating incredible funds all over the country from this directive alone, a development that would ultimately REFLATE the economy and make mincemeat of the N1,000 note as highest denomination.

It’s also instructive that tariffs and general increase of 40-50% on Telecoms services is already on. The multiplier effect of incredible sums that are already reflating the economy is better imagined, particularly with a massive population of about 230-250 million Nigerians, with about 65-70%, eternally glued and attached to telecoms services on hourly basis.

Your Excellency, with the above, it’s no brainer that we can’t afford to continue with N1,000 note as the highest denomination.

Sir, even though, there is continual decrease in prices of staple foods-rice, yams, yeast etc, some items like bread, semovita, semolina stubbornly remained where they are for about two years running, thus ridiculing the purchasing power and ultimately, rendering, the retention of ₦1,000 notes as the highest unjustifiable.

Finally, N50 and N100 notes have almost disappeared in circulation, an indication that even, the economy itself is technically responding by sending them into extinction.

Your Excellency, less discerning minds may disagree with my submissions on the need to roll out N2,000 and N5,000 naira notes denomination with a view to creating economic stability, balancing and equilibrium.

They may be anchoring their criticisms on the potential inflationary rate that the proposed submission may bring to the economy.

They may even liken it to devaluation of the nation currency. This is never the intention of this Piece.

Their argument may be valid within the context of the basic economics theory that higher currency denomination is akin to inflation, but, it’s instructive that the nation will not continue to sacrifice the stability, equilibrium and balance of quantum of fund in the economy and appropriateness of currency denomination, for an inflationary rate challenge that do not hold water whatsoever in this present circumstance.

Kola AMZAT (FCA, FCIB)

Lagos based Financial & Management Consultants,

09077509348