History Of The Naira And Kobo In Nigeria
This article is about the brief history of the Naira and Kobo in Nigeria. You may have been wondering when the Naira and Kobo became the official legal tender in Nigeria; do not worry as we will intimate you, our esteemed readers with that information as you have come to the right place. The Nigerian Naira is a very popular currency on the African continent and it is used for buying and selling in the most populous black nation on earth — our very own Motherland, Nigeria, but just how much do you know about its year of release as a legal tender? All these and more we shall discuss as we proceed in this article.
A vital part of every economy is trade or commerce. Buying and selling has been a major part of human history since the very early days of the barter system or what is known as “trade by barter” which involved the exchange of items among individuals or groups without the use of money. This form of exchange, though very useful, proved to be an inaccurate way to determine the true value of the goods and services being exchanged, hence, the need for the development of money, a medium in which prices and value are expressed. Nigeria did not immediately move from the barter system to the use of money or the Naira and Kobo but gradually tilted towards money usage by making the shift towards first cowries, and then, manilas, to beads, bottles, salt, to mention but a few.
When you last held any Nigerian currency most recently, say the ₦1,000 note, as someone born in modern day Nigeria, particularly the “Gen Z” and the “generation alpha“, you may have asked yourself the question of when Nigeria started using the Naira and Kobo. Money as a legal tender was first issued in colonial Nigeria in response to the ordinance of 1880 which introduced the Shillings and Pence as the legal tender currency in British West Africa. The Bank of England managed the one shilling, one penny, 1/2 penny and 1/10 penny coins, and these coins were distributed by a private bank known at that time as the Bank for British West Africa until the year 1912.
Between the year 1912 and 1959, the first set of banknotes and coins in Nigeria, Ghana, Sierra Leone and the Gambia were issued by the West African Currency Board (WACB) with the highest banknote and coin denominations at that time being the one pound currency note and the one shilling coin respectively. On July, 1, 1959, the Central Bank of Nigeria (CBN) issued Nigerian currency banknotes, withdrawing the WACB-issued banknotes and coins in the process. The Nigerian currency was later changed on July 1, 1962 to reflect the country’s republican status; instead of the inscription, “FEDERATION OF NIGERIA”, the new currency inscribed at its top, “FEDERAL REPUBLIC OF NIGERIA”. There was however, another currency change again in the year 1968 due to the misuse of the currency banknotes during the Nigerian Civil War.
As a result of the decision by the Federal Government to change from the metric to decimal, the Nigerian currency experienced a name change in January 1973, hence, the Pound was done away with, ushering in a new era in which the Naira became the major currency unit, while the Kobo became the minor currency unit, of which 100 Kobo equaled 1 Naira. On February 11, 1977, the twenty Naira (₦20) banknote was issued as the highest denomination at the time due to Nigeria’s economic growth. It was the first banknote in Nigeria to bear the portrait of a prominent Nigerian citizen in the person of the late Head of State, General Murtala Ramat Muhammed. The ₦20 note was first issued on the first anniversary of Murtala’s assassination as a tribute to the fallen Military Head of State.
On July 2, 1979, three new denominations of the Nigerian Naira were introduced, namely ₦1, ₦5 and ₦10. These notes were of the same size (151 X 78 mm) as the ₦20 note issued on February 11, 1977 with distinctive colours so as to distinguish them. The notes bore the portraits of three eminent Nigerians, who were declared national heroes on October 1, 1978 with he engravings at the back of the notes reflecting various cultural aspects of the country. Colours of all the banknotes in circulation were changed in April 1984, with the exception of the 50 Kobo banknote to curb the currency trafficking that was rampant in the country at the time. The 50 Kobo and ₦1 were both coined in 1991.
In December 1999, November 2000, April 2001 and October 2005 respectively the ₦100, ₦200, ₦500 and ₦1000 banknotes were introduced as a result of the expansion of economic activities in Nigeria so as to facilitate an efficient payments system. There was a currency redesign on February 28, 2007, as part of the economic reforms in the country, and as such, the ₦20 was issued for the first time in polymer substrate, while the ₦50, ₦10 and ₦5 banknotes; as well as ₦1 and 50 Kobo coins were reissued in new designs, and the ₦2 coin was introduced.
On September 30, 2009, the ₦50, ₦10 and ₦5 banknotes were also converted to polymer substrate due to the successful performance of the ₦20 polymer banknote, meaning that all lower currency denominations in Nigeria were now printed in the polymer substrate. The Central Bank Of Nigeria (CBN), as part of the celebrations marking Nigeria’s 50th Independence anniversary, as well as the nation’s 100 years of existence, issued the ₦50 Commemorative polymer banknote on September 29, 2010; and the N100 Commemorative banknote on December 19, 2014 respectively.
The eNaira, the digital version of the Nigerian currency, was officially launched in October 2021. This 2023, Nigeria experienced a currency crisis which hit really hard in February, as a result of a shortage of Naira cash due to an attempt by the Federal Government to force citizens to use a newly-redesigned Naira notes. This led to extensive street protests in mid-February 2023.
