Cardoso Blames Digital Payments, Inflation for Scarcity of N100 and N200 Notes as Nigerians Fear N5000 Note Is Coming

West Africa WeeklyJuly 23, 20262 Mins read18

Central Bank of Nigeria Governor Olayemi Cardoso has attributed the growing scarcity of N100 and N200 notes to the rapid adoption of digital payments and the declining purchasing power of lower denominations, a development that has fuelled widespread speculation that the federal government may be preparing to introduce a higher banknote such as the rumoured N5000 note.

Speaking on Tuesday after the Monetary Policy Committee meeting in Abuja, Cardoso dismissed concerns that the affected notes had been withdrawn from circulation, stressing that they remain legal tender and should continue to be accepted for transactions across the country. “Yes, they remain legal tender. Unless the Central Bank states otherwise, Nigerians should assume that all existing denominations remain legal tender,” Cardoso said.

Explaining the reduced circulation of the N100 and N200 notes, the CBN governor said the situation reflects changing demand patterns within the financial system rather than any deliberate policy to phase them out. According to him, the expansion of financial inclusion and the widespread use of electronic payment platforms have significantly reduced reliance on physical cash, particularly lower denominations. “As more people adopt digital payment channels, the demand for coins and lower-denomination notes naturally declines. If there is less demand for them, there is less need to print and circulate them in large quantities,” he said.

Cardoso also acknowledged that the depreciation of the naira has eroded the purchasing power of the smaller notes, making them less useful in day-to-day transactions. “Of course, we must also acknowledge that currency devaluation has affected the purchasing power of lower-value notes. That is a reality,” he said.

The scarcity of lower denominations has sparked widespread speculation on social media that the government may be planning to introduce a N5000 note to address the growing demand for higher-value currency. In recent weeks, a fake image of a proposed N5000 banknote featuring President Bola Tinubu’s portrait circulated widely online, forcing the CBN to issue a statement dismissing the content as fake. The bank reiterated that no such denomination has been introduced or approved.

But the persistence of the rumours reflects growing public anxiety about the direction of the country’s currency policy. Nigerians have watched the naira lose more than 70 per cent of its value against the dollar since the unification of exchange rates in June 2023, eroding the purchasing power of all denominations. The N100 note that once bought a loaf of bread now buys little more than a sachet of water. The N200 note that once filled a fuel tank now barely covers a few litres. As the value of money continues to shrink, the demand for higher denominations inevitably grows.

Cardoso’s explanation that the scarcity is driven by reduced demand rather than policy does little to reassure Nigerians who struggle daily to find lower notes for everyday transactions. Market women, bus conductors, and small traders who rely on cash for their businesses have reported increasing difficulty in obtaining N100 and N200 notes, forcing them to use higher denominations that are often difficult to break. The CBN governor’s assertion that digital payments are replacing cash rings hollow for millions of Nigerians who lack reliable internet access or smartphones.

The speculation about the N5000 note is not new. Similar rumours circulated in 2023 and 2025, each time prompting denials from the CBN. But the persistence of the rumours suggests that Nigerians are bracing for the inevitable. As inflation continues to erode the value of the naira, the introduction of higher denominations becomes not a question of if, but when. The CBN can deny the rumours all it wants, but Nigerians know that the value of their money is disappearing, and they are preparing for the worst.