Nigeria Naira note

History and origin of Nigerian Currency Naira

Last Updated on October 18, 2023 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.

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