Myths About Naira Notes and Coins in Nigeria

5 Pages Posted: 20 Jul 2007 Last revised: 28 Jan 2021


This piece addresses eight myths about Naira notes and coins. Namely

(i). Retailers round-up prices because of greed.
(ii). Note-handling habits of ‘market people’ deface and mutilate Naira notes.
(iii). Commercial banks are not doing enough to sort unfit notes.
(iv). Larger denominations will be inflationary.
(v). Too many denominations will be confusing.
(vi). Large-denomination coins will be melted by metalsmiths for jewellery.
(vii). Large-denomination currency notes will encourage counterfeiting.
(viii). Use of smart cards will make Nigeria a cashless society.

We show why none of these myths have any basis in fact or logic, and what the central bank should do to solve the problems that it inappropriately attributes to coins, notes, market people, retailers, and/or banks.

Keywords: Naira, banknotes, coins, re-denomination, counterfeiting, jewelry, smart cards, retailers, banks, central bank, myths, Nigeria

JEL Classification: D78, E42, E58

Suggested Citation

Teriba, Ayo, Myths About Naira Notes and Coins in Nigeria. Available at SSRN: or

Ayo Teriba (Contact Author)

Economic Associates ( email )

1st Floor Lindev Plaza, 16 Amodu Ojikutu Street
PO Box 70909
Victoria Island Lagos
+234 1 461 0802 (Phone)
+234 1 461 0805 (Fax)


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