Business
PHOTOS: History of Money in Nigeria
The Naira (₦) is Nigeria’s official currency today, but many people don’t realize that Nigerians didn’t start using the Naira until 13 years after gaining independence in 1960.
Before Colonial Currency:
Long before the colonial era, Nigerians had their own systems of trade. The most common method was trade by barter, where people exchanged goods and services directly. If you wanted yams, for instance, you had to offer something of value in return such as ivory, salt, cotton, tobacco, beads, gin, or fish.
Over time, Nigerians adopted traditional forms of money that were easier to exchange. These included:
Cowries (shells), Beads, Brass rods and manillas (metal money used particularly in the coastal and riverine areas)
These items served as early currencies and are used in trade across different Nigerian kingdoms and empires.
British Colonial Era:
With the arrival of the British in the 19th century and the eventual colonization of Nigeria, traditional systems gradually gave way to Western monetary concepts. The British introduced the use of coins and paper money.
By the early 20th century, Nigeria had adopted the British West African Pound, using pounds (£), shillings (s), and pence (d), the same monetary system used in Britain.
Post-Independence: The Naira is Born:
Even though Nigeria became independent in 1960 and had already established the Central Bank of Nigeria (CBN) in 1958, the country continued to use the British-style Pound Sterling system until the early 1970s.
On April 1971, the Nigerian government announced plans to adopt a decimal currency system, and the change officially took place on January 1, 1973. This was a major shift in Nigeria’s economic identity.
The new currency was named the Naira (₦), a name coined by Chief Obafemi Awolowo, then Federal Commissioner for Finance. The currency was subdivided into 100 kobo.
The First Naira and Kobo:
At the time of the currency changeover in 1973, the following denominations were introduced:
Coins:
½ kobo, 1 kobo, 5 kobo, 10 kobo, 25 kobo and 50 kobo
Banknotes:
₦1, ₦5, ₦10 and (₦20 was later introduced)
The Central Bank of Nigeria is responsible for issuing and regulating the Naira. The official currency code is NGN.
Expansion of Naira Denominations:
Over the years, higher denominations were introduced to keep pace with inflation and economic needs:
₦50 note was introduced in 1991
₦100 note was introduced in 1999
₦200 note was introduced in 2000
₦500 note was introduced in 2001 and lastly
₦1000 note was introduced in 2005
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