TheCentral Bank of Nigeria (CBN) is the sole issuer oflegal tender money throughout theFederal 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 majorcash crunch occurred in February 2023 when theNigerian 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-sponsoredcentral bank digital currency. This led to extensive street protests.[6][7][8]
The naira was introduced on 1 January 1973,[9] replacing theNigerian 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 thecolonial government of theFederation of Nigeria in 1959, with the name ofQueen 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. Thecurrency sign isU+20A6₦NAIRA SIGN.
The name "Naira" was coined from the word "Nigeria" byObafemi Awolowo.[12][13] However, Naira as a currency was launched byShehu 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]
The2023 Nigerian currency crisis was precipitated in January 2023 by a shortage of naira cash amid an attempt by theNigerian 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 the2023 general elections. This led to extensive street protests throughout January and February 2023.[6][7][8] The country'sSupreme 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]
Nigerian central bank info as of 2022 is in this source:[22]
In 1973, coins were introduced in denominations of1⁄2, 1, 5, 10 and 25 kobo, with the1⁄2 and 1 kobo in bronze and the higher denominations in cupro-nickel. The1⁄2 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 the1⁄2 to 25 kobo coins were withdrawn from circulation with effect from 28 February 2007.[25]
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 controlmoney 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 bepolymer 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 whenSanusi 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 AlhajiAliyu 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 inFederal Capital Territory, while actually it is situated inNiger State. Later prints removed the reference to FCT, ABUJA.[37]
In 2012, the Central Bank of Nigeria was considering 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 aQR 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 ofPriscilla 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 there are two #200 notes, two #500 notes and two #1000 notes
The naira was scheduled for redenomination in August 2008, although this was cancelled by then-PresidentUmaru Musa Yar'Adua,[46] with 100 old naira to become 1 new naira. TheNigerian 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, ProfessorChukwuma 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]
In 2022, a policy was implemented by the Central Bank of Nigeria (CBN) to redesign and replace the highest denomination banknotes: the ₦200, ₦500, and ₦1,000 notes. Announced in October 2022 by the then-Governor of the CBN,Godwin Emefiele, the policy also included a strict deadline for the demonetization of the old notes, which led to a severe currency crisis in the country in late 2022 and early 2023.
Background and Rationale
The Central Bank of Nigeria cited several reasons for the currency redesign and the associated demonetization policy, noting that, by global best practice, currency should be redesigned every 5 to 8 years, and the Naira was long overdue. The key stated objectives were:
The Central Bank of Nigeria (CBN) aimed to disrupt the activities of individuals engaged in currency fraud and to compel the return of large volumes of illegally acquired cash hoarded outside the banking system.
A primary objective was to undermine the financing of criminal activities, such as kidnapping-for-ransom and banditry, which rely heavily on cash transactions for illicit funding.
The redesign was intended to help ease inflationary pressures by reducing the excessive amount of money supply held outside the formal banking sector.
The policy sought to enhance the CBN's visibility and control over the money supply, thereby strengthening the effectiveness of its monetary policy decisions.[58]
Implementation and Timeline
The policy was rolled out with a tight deadline for the withdrawal of the old notes, which was subsequently subject to several extensions and legal challenges.[59]
Date
Event
October 26, 2022
The CBN announces its naira redesign policy. Sets January 31, 2023, as the swap deadline for the public.
November 17, 2022
The CBN instructs commercial banks to extend working hours to Saturdays.
November 23, 2022
New notes unveiled by President Muhammadu Buhari.
December 15, 2022
Commercial banks start dispensing new notes.
January 7, 2023
The CBN suspends over-the-counter (OTC) withdrawal of new notes to aid fairness in distribution.
January 29, 2023
Swap deadline extended to February 10, 2023, and the CBN says 1.9 trillion naira has been recovered.
February 2, 2023
The CBN orders commercial banks to resume payment of new notes OTC.
February 8, 2023
The Supreme Court restrains the CBN from enforcing February 10 deadline.
February 15, 2023
The CBN launches the old naira collection portal.
February 16, 2023
Buhari extends the validity of the old 200 naira to April 10.
March 3, 2023
The Supreme Court rules that the old naira denominations of 200, 500, and 1,000 shall remain the legal tender until December 31, 2023.
March 7, 2023
Commercial banks resume dispensing old notes.
March 13, 2023
The CBN confirms the Supreme Court ruling that old notes shall remain legal tender until December 31, 2023.
November 14, 2023
The Supreme Court rules that the old 200, 500, and 1,000 naira notes will remain legal tender and coexist with the new notes until further notice.
Design Changes
The redesign primarily focused on changing the colour palette and enhancing the security features of the affected denominations. Unlike some previous currency changes, the core images (portraits of national figures and other symbols) on the front and back of the notes remained largely the same, though the aesthetic details were modernised. The redesigned denominations featured significant colour changes: the ₦1,000 banknote adopted a blue colour, the ₦500 note was issued in green, and the ₦200 note changed to a reddish hue (similar to the previous ₦500 note).[60]
Consequences and Impact
Despite the CBN's stated objectives, the implementation of the policy generated significant and widely criticised consequences, primarily due to a severe shortage of the new banknotes in circulation, coupled with the tight demonetization deadlines.
Cash Scarcity and Economic Disruption: The scarcity of both old and new notes led to a prolonged cash crunch across Nigeria, severely impacting the economy. Businesses, particularly those in the informal sector which relies heavily on cash, suffered significant losses. Many citizens endured long queues at banks and Automated Teller Machines (ATMs).
Rise of a Black Market for Cash: The scarcity led to the emergence of a black market where Point-of-Sale (PoS) agents charged exorbitant fees to dispense cash to desperate citizens.
Digital Infrastructure Strain: The sudden shift to digital payments overwhelmed the capacity of electronic banking channels, leading to a high rate of failed transactions and system downtime across commercial banks.
Controversy and Legal Challenges: The policy was highly controversial, with critics arguing the timing (just before the 2023 general elections) and implementation were flawed. Several state governments took the Federal Government to the Supreme Court to challenge the CBN's imposed deadlines.
Inflation and GDP Impact: The disruptive nature of the policy contributed to a slowdown in economic activities; Nigeria's GDP growth rate decreased from 3.5% in the fourth quarter of 2022 to 2.3% in the first quarter of 2023.
Ultimately, while the policy led to a significant amount of cash being deposited into the banking system, it also triggered an unprecedented cash crisis, leading to widespread hardship before the Supreme Court and presidential directives restored the legal tender status of the old notes for an extended period.[61][62]
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.[63]
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.
As of August 27, 2025, the officialCBN NAFEM rate stood at approximately ₦1,537.07 per $1, whileaboki dollar parallel market rate averaged ₦1,545 - ₦1,550 per $1, reflecting a modest spread of ₦8 - ₦13 between both markets.[64]
The official exchange rate set by theCentral Bank of Nigeria: naira to U.S. dollar is approximately ₦1480.15 per 1 US dollar as of September 2025.[65]
According to a recent (June 2024) report byNaija 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.[66]
Rate of the Nigerian naira forUS$1 (1994–2005)Rate of the Nigerian naira forUS$1 (2000–June 2025)
This table shows the historical value of one U.S. dollar in Nigerian naira. PM = parallel market.
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