Nigeria's lower-denomination naira notes haven't vanished from circulation, the Central Bank of Nigeria insists, but changing consumer behaviour and the surge in digital payments have reduced how often they're used. The apex bank moved to reassure the public that the N100 and N200 notes remain valid currency and haven't been pulled from the system.
CBN Governor Olayemi Cardoso said the reduced visibility of smaller notes reflects genuine shifts in how Nigerians prefer to pay rather than any deliberate central bank action. He spoke after the Monetary Policy Committee meeting in Abuja on Tuesday.
"Unless the central bank states otherwise, Nigerians should assume that all existing denominations remain legal tender," Cardoso told reporters, calling on businesses and individuals to keep accepting the notes.
The governor's comments address growing worry among traders and everyday consumers who struggle to find low-value notes for transport fares, street purchases and small business transactions. Market dynamics, not policy decisions, drive the scarcity, he stressed.
Cardoso explained that Nigeria's financial system is shifting decisively toward digital channels, which naturally cuts demand for physical cash, especially smaller 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.
Currency devaluation has also hammered the purchasing power of low-value notes, making them less practical for many transactions. "We must also acknowledge that currency devaluation has affected the purchasing power of lower-value notes.
That is a reality," Cardoso added.
He predicted that as financial inclusion spreads and digital payments become routine, reliance on these denominations will shrink further. The CBN remains committed to single-digit inflation despite external headwinds that slowed progress in recent months, the governor added.
Nigeria recorded 11 consecutive months of disinflation before unexpected global shocks derailed momentum, Cardoso noted. "We recorded 11 consecutive months of disinflation and, from every indication, we expected that by early 2027 we would be where we wanted to be in terms of inflation, with a path towards single-digit inflation," he said.
"Unfortunately, we have experienced external shocks that were not anticipated and have lasted much longer than anyone expected."
On the naira's value, Cardoso dismissed the International Monetary Fund's assessment that the currency trades below its fair value of roughly N1,150 per dollar. The CBN will continue letting market forces set the exchange rate, he insisted.
"Our position remains the same. We will continue to ensure that Nigeria has a foreign exchange market that is transparent, liquid and based on a willing-buyer, willing-seller framework," Cardoso said, citing oil revenue and other factors as key drivers of currency movements.
