What Currency Does Nigeria Use? Full Guide

Editorial Note: While we adhere to strict Editorial Integrity, this post may contain references to products from our partners. Here's an explanation for How We Make Money. None of the data and information on this webpage constitutes investment advice according to our Disclaimer.

Nigeria’s official currency is the Nigerian Naira (₦), with the currency code NGN. Introduced in 1973, it replaced the British pound and is issued by the Central Bank of Nigeria. Banknotes range from ₦5 to ₦1,000 and are widely used in daily transactions. Nigeria also launched the eNaira, a digital version of the currency, though it currently makes up less than 1% of total circulation.

Nigeria, with a population exceeding 220 million, stands as one of Africa’s largest economies and uses the Nigerian Naira (₦) as its official currency. Whether you’re involved in investments, Forex markets, international trade, or planning a visit, knowing how the Naira works is key to understanding Nigeria’s financial system. This guide offers a closer look at the currency’s background, design, recent performance, and market behavior based on up-to-date insights from 2025.

What currency does Nigeria use?

Nigerian Naira

Nigeria officially uses the Nigerian Naira, marked by the symbol ₦ and the ISO code NGN. It’s the sole currency accepted for any kind of payment in the country and is used across all 36 states and the Federal Capital Territory.

The Naira came into use on January 1, 1973, replacing the Nigerian Pound in a national move toward the decimal system. At the time, £1 converted to ₦2, as Nigeria moved to a more globally aligned currency structure and stepped further away from its colonial past.

The Central Bank of Nigeria (CBN), set up in 1958, issues and oversees the currency, operating under the Central Bank of Nigeria Act of 2007. The CBN works to manage inflation, steady the value of the Naira, and ensure enough currency circulates in the economy. Banknotes and coins are produced by the Nigerian Security Printing and Minting Company (NSPMC), also called The Mint.

As Africa’s biggest economy by nominal GDP and a major oil exporter, Nigeria depends on the Naira for trade, investment, and digital payments. It’s used widely on ATMs, mobile banking, POS machines, and through the eNaira — Nigeria’s official digital currency introduced in 2021.

Though it faces challenges like inflation and currency swings, the Naira remains vital for participating in Nigeria’s $450 billion consumer economy. For traders, investors, and visitors alike, knowing how the Naira functions is key to understanding the financial landscape.

Nigeria currency denominations in 2025

The currency of Nigeria comes in both coins and banknotes, although coins are now rarely used.

Banknotes in circulation:

₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500, ₦1000

In December 2022, redesigned ₦200, ₦500, and ₦1000 notes were introduced to enhance security and combat counterfeiting.

Coins (Rarely used):

50 Kobo, ₦1, ₦2

Due to inflation and reduced purchasing power, high-denomination banknotes dominate most cash transactions.

Fact: In December 2024, the Central Bank confirmed that all existing and redesigned Naira notes will remain legal tender indefinitely.

Exchange rates and inflation (2025)

The Naira’s value continues to be influenced by economic reforms, inflation, and global oil prices.

Official exchange rate as of May 2025. The Central Bank of Nigeria reported an official exchange rate of ~₦1,606 per US dollar.
Parallel market exchange rates. In the informal market, the US dollar traded between ₦1,600 and ₦1,620, reflecting ongoing demand for foreign currency.
Inflation trends in early 2025. Nigeria's annual inflation rate decreased to 23.18% in February from 24.48% in January, indicating a slight easing of price pressures.

Despite the recent decline, inflation continues to affect the Naira's value and the cost of living for Nigerians.

Is the Nigerian naira fully convertible?

While Nigeria has taken significant steps toward liberalizing its foreign exchange regime, the naira is not yet fully convertible. In June 2023, the Central Bank of Nigeria (CBN) allowed the naira to float, ending years of multiple exchange rates. This move aimed to unify the official and parallel market rates, attracting foreign investment and improving transparency. However, capital controls remain in place, restricting the free movement of capital in and out of the country.

For instance, the CBN imposes limits on the amount of foreign currency individuals and businesses can access, and certain transactions still require approval. These measures indicate that while current account transactions have become more flexible, full capital account convertibility has not been achieved.

Furthermore, the CBN's interventions in the foreign exchange market continue to influence the naira's value. In response to external shocks, such as fluctuations in oil prices, the CBN has sold significant amounts of foreign currency to stabilize the naira. For example, in April 2025, the CBN injected nearly $200 million into the market following a decline in global crude oil prices.

Nigeria currency name and historical background

The Nigeria currency name, "Naira", was introduced by Chief Obafemi Awolowo, a former Minister of Finance. It's a shortened version of “Nigeria,” reflecting Nigeria’s independence and growing economic identity. Its smaller unit is the Kobo, where 100 Kobo equals 1 Naira.

Digital currency in Nigeria: The eNaira

In October 2021, Nigeria launched the eNaira, marking Nigeria as the first African nation to roll out a Central Bank Digital Currency (CBDC). It was designed to:

Supporting financial inclusion.
Reducing transaction costs.
Making digital payments faster and more reliable.
Curbing currency hoarding.

However, as of March 2025, the eNaira accounts for less than 1% of all currency in circulation, showing that public uptake remains minimal.

Trading the Naira in Forex markets

The Nigerian Naira is not a major Forex currency, but it is available via select brokers and is traded against majors like the USD, EUR, and GBP. So, the majorly traded Naira (NGN) pairs in the Forex market include:

USD/NGN. The most liquid and widely traded pair, driven by Nigeria's oil exports and reliance on the US dollar for international trade.
EUR/NGN. Moderately active, influenced by trade and remittance flows between Nigeria and the European Union.
GBP/NGN. Traded primarily due to strong UK-Nigeria remittance ties and historical trade links.

These pairs often feature wider spreads and lower liquidity compared to major Forex pairs, reflecting limited market depth and higher risk. Traders dealing with Naira pairs should consider factors such as geopolitical risk, central bank policy shifts by the Central Bank of Nigeria (CBN), and exchange restrictions, which can sharply affect volatility and pricing.

If you’re looking to trade the Naira in Forex, you will have to create an account with a broker that supports trading in that currency. We have listed some of the top brokers listing Naira pairs below. You can compare them and choose the right one for yourself:

Best Forex brokers for trading NGN
	Currency pairs	Min. deposit, $	Max. leverage	Withdrawal fee, %	Regulation	TU overall score	Open an account
FxPro	70	100	1:500		FCA, CYSEC, FSCA, SCB, FSA (Seychelles)	7.9	Open an account Your capital is at risk.
JustMarkets	70	10	1:3000		CySEC, FSC (Mauritius), FSA, FSCA	7.1	Open an account Your capital is at risk.
HFM	50		1:2000		FCA, DFSA, FSCA, FSA, CMA	7.09	Open an account Your capital is at risk.
FXTM	60	200	1:3000		FSC (Mauritius), FSCA, SCA (UAE), FCA, CMA (Kenya)	6.77	Open an account Your capital is at risk.
Dukascopy	300	100	1:200	0-2,5	FINMA	6.61	Open an account Your capital is at risk.

We at Traders Union have analyzed financial markets for over 14 years, evaluating brokers based on 250+ transparent criteria, including security, regulation, and trading conditions. Our expert team of over 50 professionals regularly updates a Watch List of 500+ brokers to provide users with data-driven insights. While our research is based on objective data, we encourage users to perform independent due diligence and consult official regulatory sources before making any financial decisions.

Learn more about our methodology and editorial policies.

Tips for beginners

Don’t trust just the official rate. Nigeria often runs multiple FX rates; what you see from the central bank isn’t always what the market uses.
Follow oil price shifts in real time. Nigeria's economy is heavily oil-driven; WTI or Brent spikes can give you early signals before Naira reacts.
Watch for central bank liquidity squeezes. The Central Bank of Nigeria (CBN) sometimes delays USD access to control outflows; this can tighten supply overnight.
Use fintech chatter for early cues. Platforms like Flutterwave or Paystack often reflect real-time transaction trends. Watch them for market tension before it hits the charts.

Tips for advanced traders

Track the CBN’s FX intervention days. The Central Bank of Nigeria (CBN) doesn’t move at random; spotting when they typically inject dollars into the market can help time your trades more effectively.
Watch offshore USD/NGN pricing. The non-deliverable forward (NDF) and offshore quotes often price in realities the onshore market hides. These reveal where smart money sees the Naira heading.
Political cycles move the Naira. Around elections and policy transitions, capital controls or new FX policies often emerge. Use this chaos as an opportunity, not a risk.
Dollar demand from fuel imports matters. Nigeria still depends heavily on imported refined fuel; when global oil prices jump, local dollar demand spikes, pulling the Naira down with it.

Risks of holding or trading NGN

Despite being Africa’s most traded currency on the continent, the Naira carries notable risks:

Liquidity gaps can freeze your position. Low global demand for the Naira often causes thin order books, meaning you might not exit your trade when it matters most.
Central bank intervention can flip trends. Nigeria’s central bank frequently steps in without warning; policy changes or sudden rate adjustments can instantly reverse the market.
Dual exchange rates distort real value. Official and parallel rates often diverge sharply, and trading near the official rate can give you a false sense of market strength.
Political headlines move the currency fast. NGN reacts more to political news than economic data. Trading around elections or reform talks can expose you to extreme volatility.

Pros and cons of using the Nigerian Naira

Widely accepted across all Nigerian regions.
Backed by a strong institutional framework (CBN).
Supported by growing digital infrastructure (eNaira, mobile money).
Transparent monetary policies with routine updates.

Not accepted internationally — must be converted.
Highly volatile exchange rate.
Limited convertibility for investment and capital flow.
Slow adoption of digital currency alternatives.

Maximizing naira value through parallel markets and remittance timing

If you're new to Nigeria’s currency — the naira (₦) — don’t just rely on the official Central Bank of Nigeria (CBN) rate. In reality, Nigeria runs a dual-rate system: the official rate and the far more reactive parallel (black) market. These two rarely match, and timing your currency exchanges based on the parallel market’s short-term movements can save or earn you 10–30% more, especially if you're dealing with inbound remittances, business payments, or travel money. Most beginners get tripped up by the assumption that the official rate is the "true" value — savvy users know better.

Also, the naira is heavily influenced by political risk and FX reserves, not just economic indicators. Track oil exports, CBN policy press releases, and even election chatter — these affect demand for the naira faster than inflation data does. For example, during foreign currency shortages, the naira can lose ground overnight despite no change in macro stats. Beginners who want to protect their money should monitor FX liquidity in the Nigerian banking system through trade news and social media chatter, not just Bloomberg terminals.

Conclusion

So, what currency does Nigeria use? The answer is the Nigerian Naira (₦) — a dynamic currency that represents Africa’s largest economy. While it presents trading and economic challenges due to inflation and regulatory controls, it also offers opportunities in sectors like fintech, energy, and cross-border commerce.

Whether you’re a traveler, trader, or financial analyst, understanding the currency of Nigeria equips you to make informed decisions in one of the most influential markets on the continent.

FAQs

Can tourists exchange foreign currency in Nigeria easily?

Yes, tourists can exchange major currencies at licensed banks or BDCs, but it's recommended to avoid the black market due to rate fluctuations.

What is the most commonly used denomination in Nigeria?

The ₦1000 note is the most frequently used denomination, followed by ₦500 and ₦200 for daily transactions.

Is the Nigerian Naira accepted in neighboring countries?

No, the Naira is not accepted as legal tender outside Nigeria. You must exchange it before traveling across borders.

How does the Naira compare to other African currencies?

The Naira is one of Africa’s most traded currencies but also among the most volatile, with a relatively low purchasing power due to inflation.

Team that worked on the article

Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018. His primary specialties are analysis and prediction of price tendencies in the Forex, stock, commodity, and cryptocurrency markets, as well as the development of trading strategies and individual risk management systems. He also analyzes nonstandard investing markets and studies trading psychology.

Also, Oleg became a member of the National Union of Journalists of Ukraine (membership card No. 4575, international certificate UKR4494).

Learn about our editorial policies

Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.

As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).