Nigerian Naira

Overview

The Naira is the official currency of Nigeria. The Naira is subdivided into 100 kobo. The Central Bank of Nigeria is the only bank with the authority to issue legal currency in the Federation. It manages the amount of currency in circulation to ensure its stability and value.

Economy

• Nigeria is very rich in oil, but is politically unstable, with insufficient infrastructure, government corruption, and poor macroeconomic management.
• The country depends on its oil sector, which accounts for one-fifth of the GDP, more than half of the total budget, and 95% of the trade.
• Economic reforms were made as a result of signing an agreement with IMF at the Paris Club on August 2000 and a $1 billion credit from the IMF.
• Because of Nigeria’s failure to meet target exchange rates and expenditure, it was terminated from the IMF program on April 2002.
• The Nigerian government has showed political determination and has implemented reforms to become market-oriented, as advised by the IMF. The reforms included modernization, curbing inflation, reforming banking systems, and resolving disagreements in the oil industry.
• In 2003, the Nigerian government announced the privatization of its oil refineries, changed its fuel prices, and organized the National Economic Empowerment Development Strategy, which resulted in an increase in the GDP in 2004.

History

• The Naira currency was introduced in 1973, replacing the Pound at a rate of two Naira = one Pound.
• In 2008, there was a plan to introduce a new Naira that would have the value of 100 old Naira, but the plan was abandoned.