History of Nigeria’s Currency (Naira & Kobo)

Allow us to take you back in time to the history of the Nigerian naira and kobo. You must know that before the colonial era, different cultures had their distinct ways of trading. While some made use of cowries and beads, others made use of bottles, salt, and other food items as a means of exchange and payment for goods.

During the colonial era, the legal tender currency of British West Africa was shillings and Pence. This was introduced after the colonial ordinance in 1880. The West African Currency Board (WACB) issued the first set of banknotes and coins in Nigeria, Ghana, Sierra Leone and the Gambia from 1912 to 1959. These banknotes were called the British West African pound.

The highest banknote denomination was one pound, while the highest coin denomination was one shilling, other denominations were one penny, 1/2 penny, and 1/10 penny. These currencies were distributed until 1912 by a private bank called the Bank for British West Africa.

On the 1st of July, 1959, the Central Bank of Nigeria (CBN) issued Nigerian currency banknotes in denominations of 5 shillings, 10 shillings, 1 pound and 5 pounds while the WACB-issued banknotes and coins were withdrawn. 5 Pounds was in Blue/Purple colour,1 Pound was red,10 Shillings was Green, 5 Shillings was Purple. (All these were in form of notes) while 2 Shillings, 1 Shilling, 6 pence, 3 pence, 1 pence, and ½ Pence were in coins.

History of Nigeria’s Currency (Naira & Kobo)

These Nigerian currencies bore the inscription, ‘Federation of Nigeria’

It was not until the 1st of July, 1962 that the currency was changed to reflect the country’s republican status. The inscription on the banknote at the top was changed to the ‘FEDERAL REPUBLIC OF NIGERIA’

In 1968, the notes were again changed following the misuse of the currency banknotes during the civil war.

The story of the Nigerian naira and kobo will not be complete without the decision to decimalize the currency in 1973, this means to change from the metric to decimal.

The efforts to decimalize the Nigerian currency dates back to 1962 when the Federal Minister of Finance appointed the Decimal Currency Committee to study and report on the functionality of a decimal currency system for the country.

The report of the committee submitted in July 1964 favoured decimalization. However, nothing was done to implement this due to the nation’s political crisis in 1966 and the subsequent civil war. On the 31st of March, 1971 the then Head of State, General Yakubu Gowon announced the intention to convert to the decimal system. This was to take place on January 1, 1973.

In May 1971, there was the promulgation of the Decimal Currency Decree No. 21, which gave effect to the currency change over from the £. s. d. monetary system.

The Decree among other things stipulated that the unit of currency in Nigeria would be the naira which will be divided into 100 kobo. The task of launching the currency, informing and educating the public on the use of the new currency units and the new coins were one of the most important functions of the board. Thus, the board carried out this task by publishing descriptions, denominations, conversion tables and specimens of the new currency.

The naira was introduced on the 1st of January, 1973 to replace the pound which was the currency of the former British colony. The naira was at a rate of 2 naira to 1 pound while one naira was equivalent to ten shillings. The name naira is simply a contraction of the name “Nigeria“, while the subdivision, kobo, is derived from the English word “copper.”

The major unit of currency which used to be £1 ceased to exist and the naira became the major unit, while the minor unit was called the kobo; a hundred kobos were equal to one naira.

On the 11th of February 1977, a new banknote with the value of twenty naira (₦20) was issued. It was the highest denomination introduced at that time and as a result of economic growth that is, the preference for cash transactions and the need for convenience.

The 20 naira banknote was the first in Nigeria to bear the portrait of a prominent Nigerian citizen, the late Head of State, General Murtala Ramat Muhammed (1938-1976). General Ramat Muhammed was the torchbearer of the Nigerian Revolution in July 1975.

The note was issued on the 1st anniversary of his assassination (13th February 1976) as a tribute to him. He was also declared a national hero on 1st October 1978.

Some other currency banknotes were introduced on the 2nd of July, 1979. The new currency denominations were ₦1, ₦5 and ₦10. These notes were of the same size as the ₦20 note issued on the 11th of February, 1977 i.e. 151 X 78 mm.

For identification purposes, the denominations were issued in distinctive colours. The notes also bore the portraits of three eminent Nigerians, who were declared national heroes on the 1st of October, 1978. The N1 note bore in its front the portrait of Mr. Herbert Macaulay (1864-1946), who is regarded as the father of politics in Nigeria and one of the architects of Nigerian independence and was red in colour. The Festac symbol was at the back.

The N5 note bore in its front the portrait of Alhaji Sir Abubakar Tafawa Balewa (1912 – 1966) who was the first Prime Minister of Nigeria and Nkpokiti drummer at the back. Its colour in front was green while the back was a darker shade of green.

The N10 note bore in its front the portrait of Dr. AlvanIkoku (1900 – 1971) who was a prominent educationist and had the portraits of Fulani milkmaids at the back. The sizes were all the same (151 x 78).

The engravings at the back of the notes reflected various cultural aspects of the country.

In April 1984, there were rampant criminal cases of currency trafficking, therefore, the colours of all the banknotes in circulation were changed in order to arrest the situation. This was in the exception of the 50 Kobo banknote. The 50K and ₦1 were both coined in 1991.

The ₦100, ₦200, ₦500 and ₦1000 banknotes were introduced in December 1999, November 2000, April 2001 and October 2005 respectively. This was in response to the expansion in economic activities and in order to facilitate an efficient payment system.

On 28th February 2007, the 20 naira note was issued in a polymer substrate as part of economic reforms. The ₦50, ₦10 and ₦5 banknotes, as well as the ₦1 and 50K coins, were also reissued in new designs while the ₦2 coin was introduced.

On the 30th of September, 2009 the ₦50, ₦10 and ₦5 banknotes which were already redesigned were converted to the polymer substrate.

On the 29th of September, 2010, the CBN, as part of its contribution towards the celebration of the 50th anniversary of Nigeria’s Independence and 100 years of its existence as a nation, issued the ₦50 commemorative polymer banknote. On the 19th of December, 2014, the N100 commemorative banknote was also issued. This is a digital banknote and the first banknote in the world that has incorporated into its design a Quick Recognition Code.