Historical Sketch

In the late 15th century, Portuguese navigators arrived at the Nigerian coast, but the local states kept their independence. In 1851, Great Britain took advantage of a power struggle within the local royalty to occupy Lagos and subsequently establish colonial rule. In the 1870, the Royal Niger Company obtained a charter for the exploitation of the coastal areas and the hinterland, while the government defeated further local states such as Benin in 1897 and Sokoto in 1903. The newly acquired territories were administered as Northern and Southern Nigeria protectorates. In 1906, Lagos and Southern Nigeria were merged, and in 1914, also Northern Nigeria joined the new Colony & Protectorate of Nigeria. In 1960, Nigeria attained independence, and the republic was proclaimed in 1963.

Monetary History Overview

In pre-colonial times, currencies in the form of copper bars and iron, weaponry or tools were used, cowrie snails were common as small change. In the North, the Maria Theresia Thaler entered circulation through the trans-Saharan trade.

The colonial administrations adopted the Sterling accounting in an informal manner. Lagos proclaimed the British coinage acts in 1898, and renewed the proclamation after the merger into Southern Nigeria. The vast northern protectorate did not formally adopt the British currency until the Nigerian unification of 1914. During the second half of the 19th century, Great Britain took possession of Lagos and the territories of Southern and Northern Nigeria. In 1907, a special set of subsidiary coins was issued for (Southern) Nigeria since British copper coins were not well accepted and not adequate for the climate, either. Several times, the colonial administration tried to ban the use of manillas and similar in payments. As this could not be implemented, another way of regulating the transactions was gone. The manillas were standardized and produced on industry scale in Great Britain and quickly displaced the hand-made and irregular pieces. The "British manillas" were finally demonetized in early 1949. In June 1913, Great Britain created the West African Currency Board which issued a common currency for the four colonies of Gold Coast, Nigeria, Sierra Leone and Gambia. The West African Pound remained current during the colonial rule.

In July 1959, one year before independence, the Central Bank of Nigeria began operations and issued the Nigerian Pound as national currency. It was initially pegged to the Pound Sterling, but repegged to the US Dollar as Nigeria did not follow British devaluation. In 1973, the currency got decimalized, and the Nigerian Naira at half a Pound became the new unit. The Naira was floated in 1974 and remained relatively stable for the rest of the decade. The growing political instability that started in the early 1980s damaged the economy and raised the pressure on the Naira. When the currency finally stabilized in the mid-2000s, more than 99% of the Naira's value had gone. In the mid-2010, the depreciation started to accelerate again. The central bank has split the exchange rate into an official and fluctuating effective (bureau-de-change) one in 2015.

Nigeria joined the International Monetary Fund (IMF) on 30.03.1961.

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Monetary History Sources