With its oil wealth, Nigeria should be awash with foreign currency. But years of economic mismanagement have left the country with a debilitating shortage of dollars. In an attempt to fix the problem, President Bola Tinubu relaxed longstanding foreign exchange restrictions shortly after taking office in May 2023. The local naira currency, pegged for years at an artificially high level against the dollar, has since fallen 70%. Tinubu’s goal was to trigger an influx of foreign capital and eventually make Nigeria a more attractive investment destination. The near-term impact was to send inflation surging to a 28-year high, leading to a cost-of-living crisis that could potentially undermine stability in Africa’s most populous nation.
Despite Nigeria being among Africa’s largest oil producers, the economy has stagnated for years, its resource riches plundered by a politically connected elite. Corruption is endemic, many state institutions are dysfunctional and armed bandits and Islamist militants roam the country’s north. About 40% of Nigeria’s more than 200 million people live in dire poverty, according to the World Bank, and the higher living costs have added to their ranks. Dollar shortages persist, and businesses also face constant policy uncertainty and power cuts. The government used 68% of the revenue it collected in the first half of 2024 to service debt, an improvement on past years but still not leaving much for anything else. Under previous management, the central bank played a highly unorthodox role, providing loans to small businesses and introducing multiple exchange rates. The system was supposed to boost dollar availability to key parts of the economy, but had the opposite effect, fanning a thriving unofficial currency market that made the naira even more volatile by encouraging speculation.
FAQs
In an attempt to fix the problem, President Bola Tinubu relaxed longstanding foreign exchange restrictions shortly after taking office in May 2023. The local naira currency, pegged for years at an artificially high level against the dollar, has since lost 70% about of its value.
Does Nigeria use US dollars? ›
The naira is the currency of Nigeria. The currency code for nairas is NGN, and the currency symbol is ₦. The most popular naira exchange is NGN to USD. It is a fiat currency.
Who named Nigeria's currency? ›
The name "Naira" was coined from the word "Nigeria" by Obafemi Awolowo. However, Naira as a currency was launched by Shehu Shagari as minister of finance in 1973. The Central Bank of Nigeria claimed that they attempted to control the annual inflation rate below 10%.
Why is the naira collapsing? ›
Dollar shortages persist, and businesses also face constant policy uncertainty and power cuts. The government used 68% of the revenue it collected in the first half of 2024 to service debt, an improvement on past years but still not leaving much for anything else.
Why is naira losing value? ›
WHY IS THE NAIRA PLUMMETING IN VALUE? Under the previous leadership of the Central Bank of Nigeria, policymakers tightly controlled the rate of the naira against the dollar, thereby forcing individuals and businesses in need of dollars to head to the black market, where the currency was trading at a much lower rate.
How much is $100 US in Nigeria? ›
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| Conversion rates US Dollar / Nigerian Naira |
|---|
| 100 USD | 164,753.00000 NGN |
| 250 USD | 411,882.50000 NGN |
| 500 USD | 823,765.00000 NGN |
| 1000 USD | 1,647,530.00000 NGN |
8 more rowsNigeria is the most populous black nation on Earth. It is home to the second largest film industry on the globe whilst also being the fashion, technological and creative hub in Africa. Nigerians are known for their vibrant and friendly energy expressed through diverse creative expressions.
Who sold Nigeria to the British name? ›
George Goldie the founder of the Royal Niger Company which had its headquarters in Lokoja. Sir. Goldie sold the Southern Nigeria protectorate (land and people) to the British Government for £865,000 (eight hundred and sixty five thousand pounds) in the year 1899.
Is Nigeria a first world country? ›
First world countries, were those allied with the United States. Second world countries were those allied with the Soviet Union. Third world countries were those who allied with neither East or West as members of the 'Non-Allied Movement'. Nigeria was a member of this body.
But dollar flows to Nigeria have been falling in the last few years due to declining investment and lower exports of crude oil, which account for more than 90% of the country's export income.
What currency is Nigeria using now? ›
The naira is divided into 100 kobo. The naira was introduced in 1973, when the country decimalized its monetary system and substituted the naira for the Nigerian pound (the country used the British pound sterling when it was a British colony), which was divided into shillings.
How much is a naira to a dollar? ›
1 NGN = 0.000603 USD Sep 12, 2024 03:22 UTC
The currency converter below is easy to use and the currency rates are updated frequently.
Is Nigeria still using coins? ›
Are coins still a legal tender in Nigeria? According to the CBN Act Section 2, Naira coins are still Nigeria's legal tender. Our currency structure is made up of three coin denominations: 50 kobo, ₦1 and ₦2, and eight banknotes denominations: ₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500 and ₦1000.
