Last Updated on May 31, 2024 by admin
The history of Nigerian currency dates back to the pre-colonial era when various forms of currency were used in the region. These included cowries (shells), brass, and iron objects, as well as trade goods such as cloth, salt, and beads.
In the late 19th century, British colonial rule started in present-day Nigeria. The British introduced the British West African pound to the region as the official currency. This pound was used in Nigeria, Ghana, Sierra Leone, and the Gambia. It was pegged to the British pound sterling and remained in circulation until Nigeria gained independence in 1960.
After independence, the Central Bank of Nigeria (CBN) was established in 1958, and it took over the issuance of currency from the West African Currency Board. The Nigerian pound was introduced as the country’s national currency, with the CBN issuing its own banknotes and coins.
In 1973, Nigeria decimalized its currency and introduced the naira as its new currency. One naira was equal to ten shillings or one pound. The kobo, a subdivision of the naira, was also introduced. Initially, the naira was pegged to the British pound, but it later became a floating currency.
On 11th February 1977, a new banknote with the value of twenty naira (₦20) was issued. It was the highest denomination introduced at the time as a result of the growth of the economy; the preference for cash transactions and the need for convenience.
1975. The note was issued on the 1st anniversary of his assassination as a fitting tribute to a most illustrious son of Nigeria. He was declared a national hero on 1st October 1978.
On 2nd July, 1979, new currency banknotes of three denominations, namely ₦1, ₦5 and ₦10 were introduced. These notes were of the same size i.e. 151 X 78 mm as the ₦20 note issued on 11th February, 1977. In order to facilitate identification, distinctive colours were used for the various denominations.
The notes bore the portraits of three eminent Nigerians, who were declared national heroes on 1st October, 1978. The engravings at the back of the notes reflected various cultural aspects of the country.
In April 1984, the colours of all the banknotes in circulation were changed with the exception of the 50 Kobo banknote to arrest the currency trafficking prevalent at the time. In 1991, the 50K and ₦1 were both coined.
Over the years, the Nigerian currency has undergone several devaluations and changes in denominations due to economic challenges, inflation, and policy decisions. In 2008, the CBN revalued the naira by removing two zeros from the currency. For example, ₦1000 became ₦10.
In response to the expansion in economic activities and to facilitate an efficient payments system, the ₦100, ₦200, ₦500 and ₦1000 banknotes were introduced in December 1999, November 2000, April 2001 and October 2005 respectively.
On 28th February, 2007, as part of the economic reforms, ₦20 was issued for the first time in polymer substrate, while the ₦50, ₦10 and ₦5 banknotes; as well as ₦1 and 50K coins were reissued in new designs, and the ₦2 coin was introduced.
On 30th September, 2009 the redesigned ₦50, ₦10 and ₦5 banknotes were converted to polymer substrate following the successful performance of the ₦20 (polymer) banknote. Thus, all lower denomination banknotes were now printed in the polymer substrate.
Currently, the Nigerian currency consists of banknotes and coins. The banknotes are denominated in ₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500, and ₦1000, while the coins are denominated in kobo and include ₦1, ₦2, ₦5, ₦10, ₦20, and ₦50 kobo.
In recent years, there have been discussions about further reforms to strengthen the Nigerian currency and address issues such as currency instability and black market trading. These discussions have included the possibility of a currency redenomination or a switch to a new currency altogether.
What Is the Nigerian Naira (NGN)?
The Nigerian Naira (NGN) is the official currency of Nigeria. It is made up of 100 kobo. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria.
Key Points:
- Symbol: ₦
- Code: NGN
- Subunit: Kobo (1 Naira = 100 Kobo)
- Central Bank: Central Bank of Nigeria (CBN)
History of naira
The Nigerian Naira (NGN) has a rich history that dates back to its introduction in 1973.
Pre-Naira Era:
Before the naira, Nigeria used the Nigerian pound, which was introduced in 1959. The pound was divided into shillings and pence, following the British system.
Decimalization and Introduction of Naira:
In 1971, the Nigerian government decided to decimalize its currency system, switching from pounds, shillings, and pence to a decimal system based on the naira and kobo. The naira was officially introduced on January 1, 1973, at an exchange rate of 2 naira to 1 pound.
Naming the Naira:
The name “Naira” was coined from the word “Nigeria” by Chief Obafemi Awolowo, a prominent Nigerian nationalist and statesman.
Early Years and Design Changes:
In the early years, the naira was relatively stable, but it gradually depreciated due to various economic factors. Over time, the design of the naira banknotes and coins has evolved to incorporate security features and reflect Nigeria’s cultural heritage.
Economic Challenges and Reforms:
The naira has faced numerous challenges over the years, including inflation, devaluation, and fluctuations in the exchange rate. The Central Bank of Nigeria (CBN) has implemented various policies and reforms to stabilize the currency and manage its value.
Introduction of the eNaira:
In October 2021, Nigeria became the first African country to launch a Central Bank Digital Currency (CBDC) called the eNaira. The eNaira aims to complement the physical naira, enhance financial inclusion, and improve the efficiency of digital transactions.
Key Milestones:
- 1973: Naira introduced, replacing the Nigerian pound.
- 1977: Introduction of the 20 naira banknote.
- 1979: Introduction of 1, 5, and 10 naira banknotes.
- 1991: Introduction of 50 naira banknote.
- 1999: Introduction of 100 naira banknote.
- 2000: Introduction of 200 naira banknote.
- 2001: Introduction of 500 naira banknote.
- 2005: Introduction of 1000 naira banknote.
- 2021: Launch of the eNaira.
The Nigerian naira continues to be a vital component of the country’s economy. While it has faced challenges, the CBN remains committed to ensuring its stability and promoting its use in both domestic and international transactions.
Exchange Rate:
The naira operates under a managed float exchange rate system. This means that while the CBN intervenes in the market to maintain stability, the exchange rate is ultimately determined by market forces. You can find the current exchange rates on the CBN website or various financial platforms.
Digital Currency:
In October 2021, Nigeria launched its own digital currency, the eNaira. This is a central bank digital currency (CBDC) that aims to complement the physical naira and provide a more efficient and secure way to transact.
Challenges:
The Nigerian naira has faced challenges in recent years, including depreciation against major currencies and fluctuations in the exchange rate. These issues have been exacerbated by factors such as declining oil prices, economic instability, and inflation.
Nigerian Naira Banknotes and Coins
1. What is the official currency of Nigeria?
Answer: The official currency of Nigeria is the Nigerian Naira (NGN).
2. What is the symbol and code for the Nigerian Naira?
Answer: The symbol is ₦ and the code is NGN.
3. What are the denominations of Nigerian Naira banknotes and coins?
Answer: Banknotes are available in denominations of ₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500, and ₦1000. The only coin currently in circulation is the ₦2 coin.
4. What is the exchange rate of the Nigerian Naira against the US Dollar (USD)?
Answer: The exchange rate fluctuates daily. You can find the current exchange rate on the Central Bank of Nigeria website or through various financial platforms.
5. Can I use foreign currency in Nigeria?
Answer: While some businesses may accept foreign currencies like the US Dollar or British Pound, the official currency for transactions in Nigeria is the Naira. It’s advisable to exchange your foreign currency for Naira at authorized financial institutions.
6. What is the eNaira?
Answer: The eNaira is Nigeria’s central bank digital currency (CBDC), launched in 2021. It is a digital version of the physical Naira and aims to enhance financial inclusion and improve the efficiency of digital transactions.
7. How can I get the eNaira?
Answer: You can get the eNaira by downloading the eNaira Speed Wallet app and following the registration process.
8. What are the benefits of using the eNaira?
Answer: The eNaira offers faster, cheaper, and more secure transactions compared to traditional banking methods. It also promotes financial inclusion by providing access to financial services for those without bank accounts.
9. Is the Nigerian Naira a stable currency?
Answer: The Naira has faced challenges like inflation and devaluation over the years. The Central Bank of Nigeria implements policies to manage its value and ensure stability.
10. Where can I exchange Nigerian Naira for other currencies?
Answer: You can exchange Naira for other currencies at authorized banks, bureaux de change
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