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Nigerian naira

(Redirected from Nigerian dollar)
"Naira" redirects here. For other uses, see Naira (disambiguation).

The naira (sign: ₦; code: NGN; Yoruba: náírà, Hausa: نَيْرَ, romanized: naira, Igbo: naịra, Tyap: nera) is the currency of Nigeria. One naira is divided into 100 kobo.[2]

Nigerian naira
500 naira banknote
ISO 4217
CodeNGN (numeric: 566)
Subunit0.01
Unit
Pluralnaira
Symbol₦‎
Denominations
Subunit
 1⁄100kobo
Plural
 kobokobo
Banknotes₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500, ₦1000
Coins50 kobo, ₦1, ₦2
Demographics
Date of introduction1 January 1973
ReplacedNigerian pound
User(s) Nigeria
Issuance
Central bankCentral Bank of Nigeria
 Websitewww.cenbank.org
PrinterNigerian Security Printing and Minting Company Limited
 Websitewww.mintnigeria.com
MintNigerian Security Printing and Minting Company Limited
 Websitewww.mintnigeria.com
Valuation
Inflation28. 9%[1]
 SourceJanuary 2024

The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria.[3][4] It controls the volume of money supplied in the economy in order to ensure monetary and price stability. The Currency Operations Department of the CBN is in charge of currency management, through the designs, procurement, distribution and supply, processing, reissue and disposal or disintegration of bank notes and coins.[5]

A major cash crunch occurred in February 2023 when the Nigerian government used a currency note changeover—delivering too few of the new notes into circulation—to attempt to force citizens to use a newly-created government-sponsored central bank digital currency. This led to extensive street protests.[6][7][8]

History

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The history of the currency according to the government.[9]

The naira was introduced on 1 January 1973,[9] replacing the Nigerian pound at a rate of £1 = ₦2.[10] The coins of the new currency were the first coins issued by an independent Nigeria, as all circulating coins of the Nigerian pound were all struck by the colonial government of the Federation of Nigeria in 1959, with the name of Queen Elizabeth II on the obverse.[11] This also made Nigeria the last country in the world to abandon the £sd currency system in favour of a decimal currency system. There was a government plan to redenominate the naira at 100:1 in 2008, but the plan was suspended. The currency sign is U+20A6 ₦ NAIRA SIGN.

The name "Naira" was coined from the word "Nigeria" by Obafemi Awolowo.[12][13] However, Naira as a currency was launched by Shehu Shagari as minister of finance in 1973.

The Central Bank of Nigeria claimed that they attempted to control the annual inflation rate below 10%. In 2011, the CBN increased key interest rate six times, rising from 6.25% to 12%. On 31 January 2012, the CBN decided to maintain the key interest rate at 12%, in order to reduce the impact of inflation due to a reduction in fuel subsidies.[14]

From 20 June 2016, the naira was allowed to float, after being pegged at ₦197 to US$1 for several months.[15] Trade[according to whom?] speculated the natural range of the naira would be between ₦280 and ₦350 to the dollar.[16][needs update]

In October 2021, the eNaira, the digital version of the state currency, was officially launched in Nigeria by President Muhammadu Buhari.[17]

The 2023 Nigerian currency crisis was precipitated in January 2023 by a shortage of naira cash amid an attempt by the Nigerian government to force citizens to use newly-designed notes, which the government said would help stem the tide of vote-buying in the lead-up to the 2023 general elections. This led to extensive street protests throughout January and February 2023.[6][7][8] The country's Supreme Court later invalidated the government's pronouncement that the previous notes had ceased to become legal tender.[18]

On 14 June 2023, the Naira fell 23% in a day, to a rate of ₦600 to US$1, as the central bank abandoned its currency peg and allowed the naira to trade freely.[19] On 19 July 2023, the Naira fell to a new record low of ₦853 to US$1.[20]

Between the 1st Feb 2024 and the 5th Feb 2024, the currency fell again, more than 50%, from NGN 898 to NGN 1,400, before drifting down to NGN 1,600 as of 30 July 2024 [21]

Coins

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Nigerian central bank info as of 2022 is in this source:[22]

In 1973, coins were introduced in denominations of 1⁄2, 1, 5, 10 and 25 kobo, with the 1⁄2 and 1 kobo in bronze and the higher denominations in cupro-nickel. The 1⁄2 kobo coins were minted only that year. In 1991, smaller 1, 10 and 25 kobo coins were issued in copper-plated-steel, along with nickel-plated-steel 50 kobo and ₦1. On 28 February 2007, new coins were issued in denominations of 50 kobo, ₦1 and ₦2, with the ₦1 and ₦2 bimetallic. Some Nigerians expressed concerns over the usability of the ₦2 coin.[23] The deadline for exchanging the old currency was set at 31 May 2007.[24] The central bank stated that the 1⁄2 to 25 kobo coins were withdrawn from circulation with effect from 28 February 2007.[25]

Banknotes of Nigeria

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Old Nigerian currency

On 1 January 1973, the Central Bank of Nigeria introduced notes for 50 kobo, ₦1, ₦5, ₦10 and ₦20: in April 1984, the colors of all naira banknotes were changed in an attempt to control money laundering.[12] In 1991, ₦50 notes were issued, while the 50 kobo and ₦1 notes were replaced by coins in 1991. This was followed by ₦100 in 1999, ₦200 in 2000, ₦500 in 2001 and ₦1,000 on 12 October 2005.[33]

On 28 February 2007, new versions of the ₦5 to ₦50 banknotes were introduced. Originally the ₦10, ₦20 and ₦50 were to be polymer banknotes,[34] but the ₦5, ₦10 and ₦50 were delayed to late 2009 and only the ₦20 was released in polymer. The notes are slightly smaller (130 × 72 mm) and redesigned from the preceding issues. In mid-2009 when Sanusi Lamido Sanusi took over as CBN Governor,[35] The Central Bank of Nigeria changed the ₦5, ₦10 and ₦50 to polymer notes.

On the ₦1,000 notes, there is a subtle shiny strip running down the back of the note to prevent counterfeiting. The strip is a shimmery gold color showing ₦1,000 and has a triangular shape in the middle of the front of the note which changes its color from green to blue when tilted. The main feature on the front is the engraved portraits of Alhaji Aliyu Mai-Bornu and Dr. Clement Isong, both of which are former governors of the Central Bank of Nigeria.[36]

On the first prints of the ₦100 notes issued starting 1 December 1999, Zuma Rock was captioned as located in Federal Capital Territory, while actually it is situated in Niger State. Later prints removed the reference to FCT, ABUJA.[37]

In 2012 the Central Bank of Nigeria was contemplating the introduction of new currency denominations of ₦5,000. The bank also made plans to convert ₦5, ₦10, ₦20 and ₦50 into coins which are all presently notes.[38]

The Central Bank of Nigeria announced[when?] that it would no longer issue banknotes on polymer citing higher costs and environmental issues.[39][40][41]

On 12 November 2014, the Central Bank of Nigeria issued a ₦100 commemorative note to celebrate the centennial of Nigeria's existence. The notes are similar to its regular issue with the portrait of Chief Obafemi Awolowo on the front, but are redesigned to include a new color scheme, revised security features, and the text "One Nigeria, Great Promise" in microprinting. On the back is a QR code (Quick Response code) which when scanned leads users to a website about Nigeria's history.[42][43]

In 2019, the naira attained a landmark when it featured the signature of Priscilla Ekwere Eleje, the new Director of Currency operations of the Central Bank of Nigeria and the first woman to hold the post.[44] and now in Nigeria we have two #200 notes,two #500 notes and two #1000 notes

Currently circulating banknotes[45]
1999–2005 series
Image Value Dimensions Main colour Description Date of
Obverse Obverse Reverse Watermark First printing Issue
₦100 151 × 78 mm Purple and multicolour Chief Obafemi Awolowo Zuma Rock As portrait(s), "CBN", value 1999 1 December 1999
₦200 Cyan and multicolour Sir Ahmadu Bello Pyramid of agricultural commodity and livestock farming 2000 1 November 2000
[1] Archived 2016-10-18 at the Wayback Machine ₦500 Blue and multicolour Dr. Nnamdi Azikiwe Off-shore oil rig 2001 4 April 2001
[2] Archived 2016-10-18 at the Wayback Machine ₦1000 Brown Alhaji Aliyu Mai-Bornu, Dr. Clement Isong CBN's corporate headquarters in Abuja 2005 12 October 2005
2006 series (paper and polymer banknotes)
₦5 130 × 72 mm Brown Alhaji Abubakar Tafawa Balewa Nkpokiti dancers Central Bank of Nigeria logo, "CBN" 2006 28 February 2007
₦10 Red Alvan Ikoku Fulani milk maids
₦20 Green General Murtala Mohammed Ladi Kwali
₦50 Blue Hausa, Igbo and Yoruba men and a woman Local fishermen
For table standards, see the banknote specification table.

Second naira

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The naira was scheduled for redenomination in August 2008, although this was cancelled by then-President Umaru Musa Yar'Adua,[46] with 100 old naira to become 1 new naira. The Nigerian Central Bank stated that it would make the naira fully convertible against foreign currencies by 2009. Currently, the amount of foreign currency is regulated through weekly auctions, while the Central Bank sets the exchange rate. The naira appreciated against the dollar through 2007 due to high oil revenues. Also, the then-Bank Governor, Professor Chukwuma Soludo noted the weekly central bank auctions of foreign currency will gradually be phased out, and that the bank would "only intervene in the market as may be required to achieve defined policy objectives".[47]

Coins and banknotes, and their security features, are described on the website of the Central Bank of Nigeria.[48]

Coins

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Coins were to be issued in denominations of: - 1 kobo (₦0.01) - 2 kobo (₦0.02) - 5 kobo (₦0.05) - 10 kobo (₦0.10) - 20 kobo (₦0.20) - 50 Kobo (₦0.50) - 1 Naira (₦1) Due to inflation, Nigerian coins are all essentially worthless now.[49]

Banknotes

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Banknotes were to be printed in denominations of:

2022 redesign

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See also: 2023 Nigerian currency crisis

In 2022, the Central Bank of Nigeria (CBN) under President Muhammadu Buhari led administration expressed the decision to redesign the naira as a statutory responsibility and a way to curb the increased circulation of counterfeit notes in the country.[58] The CBN Governor, Mr. Godwin Emefiele expressed that the approval for the redesign was granted by the president of the country in fighting corruption, terrorism, kidnapping and other unlawful practices. He said the higher naira denominations have been the denomination mostly used by the perpetrators of the acts which includes ₦200, ₦500 and ₦1,000 notes.[59][60] President Muhammadu Buhari officially unveiled the new notes at the state house after 19 years since the naira was redesigned.[61] The newly redesigned naira notes were planned to be printed by The Nigerian Security Printing and Minting Company Limited which will make the country one out of the four Africa countries who print their currencies locally and not import from foreign countries.[62][63][needs update]

In November 2022, CBN, Nigeria's central bank, informed the citizens that the new notes will be issued from 15 December 2022 onward, and that old naira notes need to be returned to the banking system before 31 January 2023 when they will cease to be legal tender.[64][65] The deadline to exchange banknotes was extended[when?] to February 2023.[66]

The redesign is controversial. There have been shortages of the new bank notes at ATMs, necessitating some Nigerians to wait in long lines or sleep on the sidewalk waiting for ATMs to be reloaded.[66]

Currently circulating banknotes[45]
2022 Redesign
Image Value Dimensions Main colour Description Date of
Obverse Reverse Obverse Reverse Watermark First printing Issue
₦200 151 × 78 mm Pink Sir Ahmadu Bello Pyramid of agricultural commodity and livestock farming As portrait(s), "CBN", value 2022 2022
₦500 Green Dr. Nnamdi Azikiwe Off-shore oil rig 2022 2022
  ₦1000 Blue Alhaji Aliyu Mai-Bornu, Dr. Clement Isong CBN's corporate headquarters in Abuja 2022 2022

Hidden naira notes

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In 2022, Nigeria's central bank expressed the scarcity of the currency due to high volume of the naira kept outside the banking system and attributed to be hoarded by politicians.[67]

Exchange rates

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When the naira was introduced, it had an official exchange rate of US$1.52 for ₦1, though a currency black market existed in which the naira traded at a discount relative to the official exchange rate.

The official exchange rate set by the Central Bank of Nigeria: naira to U.S. dollar is approximately ₦767.54 per 1 US dollar. This rate is almost two times different from the illegal black market exchange rate. The Black-Market exchange rate of the naira to the U.S. dollar is approximately ₦752.50 per 1 US dollar.[68]

According to a recent report by Naija News, the parallel market exchange rate of the naira to the U.S. dollar is around ₦1483 per 1 USD, significantly higher than the official Central Bank of Nigeria rate. This disparity highlights underlying economic challenges and market pressures.[69]

 
Rate of the Nigerian naira for US$1 (1994–2005)

This table shows the historical value of one U.S. dollar in Nigerian naira. PM = parallel market.

Date ₦ per US$ Date ₦ per US$ Date ₦ per US$
1972 0.658 1993 17.30 (21.90 PM) 2014 170–199
1973 0.658 1994 22.33 (56.80 PM) 2015 199–300
1974 0.63 1995 21.89 (71.70 PM) 2016 390–489
1975 0.616 1996 21.89 (84.58 PM) 2017 333
1976 0.62 1997 21.89 (84.58 PM) 2018 360
1977 0.647 1998 21.89 (84.70 PM) 2019 305
1978 0.606 1999 21.89 (88–90 PM) 2020 361
1979 0.596 2000 85.98 (105.00 PM) 2021 399
1980 0.550 (0.900 PM) 2001 99–106 (104–122 PM) 2022 423
1981 0.61 2002 109–113 (122–140 PM) 2024 1483
1982 0.673 2003 114–127 (135–137 PM)
1983 0.724 2004 127–130 (137–144 PM)
1984 0.765 2005 132–136
1985 0.894 (1.70 PM) 2006 128.50–131.80
1986 2.02 (3.90 PM) 2007 120–125
1987 4.02 (5.90 PM) 2008 115.50–120
1988 4.54 (6.70 PM) 2009 145–171
1989 7.39 (10.70 PM) 2010 148.21–154.8
1990 7.39 (10.70 PM) 2011 151.05–165.1
1991 8.04 (9.30 PM) 2012 155.09–161.5
1992 9.91 2013 153.21–162.9
Current NGN exchange rates
From Google Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD EUR JPY USD
From Yahoo! Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD EUR JPY USD
From XE.com: AUD CAD CHF CNY EUR GBP HKD JPY USD EUR JPY USD
From OANDA: AUD CAD CHF CNY EUR GBP HKD JPY USD EUR JPY USD

See also

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References

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  2. ^ Aanu, Damilare (2018-06-19). "History Of Nigerian Naira, Symbol And Sign You Need To Know About". WITHIN NIGERIA. Retrieved 2022-12-20.
  3. ^ "Legal Tender". www.cbn.gov.ng. Retrieved 2022-11-11.
  4. ^ "Legal Tender". www.cbn.gov.ng. Retrieved 2022-12-20.
  5. ^ "Frequently Asked Questions (FAQs) | On the Category, Currency Management". www.cbn.gov.ng. Retrieved 2022-12-20.
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  62. ^ Anichukwueze, Donatus (2022-11-23). "Nigeria is One of Four African Countries Printing Currency".
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  66. ^ a b "Nigeria's naira shortage: Anger and chaos outside banks". BBC News. 2023-02-14. Retrieved 2023-02-14.
  67. ^ Oomodele Adigun, ed. (28 November 2022). "Heaps of Rotten Naira Found". Retrieved 2022-12-03.
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