The Nigerian Naira (NGN) is the official currency of Nigeria in west Africa. It is widely used for domestic and international transactions within the country. The currency code for the Nigerian Naira is NGN, and the Nigerian Naira is made up of 100 kobo. The Central Bank of Nigeria manages and distributes the Nigerian naira and attempts to maintain price stability with it. Since its inception in 1973, continual devaluation has affected the naira, with inflation remaining above 10% as of 2019.
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History of the Nigerian Naira (NGN)
The NGN was introduced in 1973, replacing the Nigerian pound. Pond to naira was set at a rate of two naira to every pound. 2008 saw the NGN with devaluation due to high inflation. Over the years, the currency has been pegged to US dollar. In 2020, the USD/NGN exchange rate was between 350 and 380, That means it takes 380 NGN to buy one USD.
This currency reform was implemented to align Nigeria’s currency with the decimal system used in many other countries.
Economy of Nigeria
This region was once home to many ancient and prosperous societies before falling under British colonial rule in the 1800s. In 1960, Nigeria gained independence and became the Federation of Nigeria. However, it soon descended into a civil war that continued into the 1970s, with foreign powers like France, Egypt, Britain, and the Soviet Union becoming involved. Until 1999, Nigeria’s leadership shifted between elected governments and military dictatorships.
Years of military rule, political corruption, and poor economic management took a toll on Nigeria’s economy, leading to significant foreign debt. When oil prices plummeted in the 1980s, Nigeria defaulted on its debt. The country later renegotiated with the Paris Club in 2005 and fully repaid its debt in 2006.
Inflation has been a persistent issue for Nigeria’s economy. In 1995, inflation soared above 70%, though it has since averaged around 12%. Stabilized prices of essentials like food and utilities have partly improved inflation control. Between 2016 and 2019, interest rates fluctuated between 11% and 14%.
According to the World Bank, Nigeria is a lower-middle-income emerging market still grappling with inflation’s effects. In 2019, the country saw an annual inflation rate of 11.4% and a GDP growth rate of 2.2%.
Denominations of the Nigerian Naira (NGN)
The NGN is available in various denominations of banknotes and coins. The Central Bank commonly issues banknotes in denominations of 5, 10, 20, 50, 100, 200, 500, and 1000 Naira and mints coins in denominations of 1, 2, and 5 Naira. In 2014, the central bank released a commemorative NGN note celebrating the nation’s independence. This commemorative note has a quick-response code (QRC) that when scanned takes the user to a website about Nigeria’s history.
Exchange Rate of the Nigerian Naira (NGN)
Exchange Rate of the Nigerian Naira (NGN) often experiences significant fluctuations against other currencies because the Central Bank of Nigeria primarily monitors and attempts to peg it to the USD. Since the NGN is not pegged to other currencies, its exchange rate can vary from day to day.
The exchange rate of the Nigerian Naira fluctuates based on several factors, including:
- Global economic conditions
- Oil prices
- Government policies
- Foreign exchange reserves
As a result, the value of the Naira can be quite volatile.
Popular currency Exchange rate
British Pounds = 2131.7045 Nigerian Naira
Euro = 2131.7045 Nigerian Naira
US dollar = 2131.7045 Nigerian Naira
Using the Nigerian Naira
Visitors to Nigeria can exchange foreign currency for Naira at banks, currency exchange bureaus, and airports. Additionally, ATMs are widely available throughout the country, allowing visitors to withdraw cash using international debit or credit cards. However, note that some areas, especially outside major cities, may have limited credit card acceptance.
Conclusion
The Nigerian Naira serves as Nigeria’s primary currency. Various economic factors, including oil prices and government policies, influence its value. Understanding the Naira and its exchange rate is essential for anyone planning to visit or do business in Nigeria.
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