Businesses in Nigeria, such as import/export, manufacturing, tourism, education, and medical, often transact in foreign currencies for various needs like procuring goods, accepting payments, and acquiring materials.
The US dollar is also widely used in Nigeria for business purposes. The dollar is seen as a more stable currency than the naira. Many businesses and individuals in Nigeria prefer to keep their money in dollars, and the dollar is often used to settle large transactions.
Other currencies used in Nigeria
Nigeria sometimes uses other currencies for business purposes, including the British pound, the euro, and the CFA franc.
Bitcoin, Ethereum, Litecoin, and Tether are gaining popularity in Nigeria due to their perceived stability compared to the unpredictable naira and the ability to avoid exorbitant bank fees. Despite warnings from the Central Bank, Nigerians utilize them for savings, overseas transactions, and investments. The future of cryptocurrencies in Nigeria is uncertain, with potential regulation or a ban looming, but they remain a popular value transfer choice.
The British pounds is still used by some businesses and individuals in Nigeria, especially those who have connections to the United Kingdom. The euro is also used by some businesses and individuals in Nigeria, especially those who have connections to Europe. The CFA franc is used in some parts of Nigeria border countries that use the CFA franc.
These other currencies are not as widespread as the use of the naira and the dollar. However, they may become more common in the future, depending on the economic situation in Nigeria and the countries that use these currencies.
Denominations of the Naira
The official currency of Nigeria is the naira (₦), which is divided into 100 kobo. The naira was introduced in 1973, replacing the Nigerian pound. There are eight denominations of naira banknotes: ₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500, and ₦1000. There are also three denominations of naira coins: 50 kobo, ₦1, and ₦2.
The naira is not freely convertible, meaning that it cannot be freely exchanged for other currencies. However, it is possible to exchange naira for dollars or other foreign currencies at banks and exchange bureaus in Nigeria.
Here are some of the countries that Nigerians travel to for business, and the currencies that are commonly used in those countries:
The US dollar in the United States, the British pound in the United Kingdom, the Chinese yuan in China, and the Indian rupee in India.
In addition, the South African rand is used in South Africa, the UAE dirham is used in Dubai, the Turkish lira is used in Turkey, and the Singapore dollar is used in Singapore. Ghana uses the Ghanaian cedi, Kenya uses the Kenyan shilling, and Malaysia uses the Malaysian ringgit.
These are just a few examples, and the currencies that are used in each country may vary depending on the specific business dealings involved. It is important to do extensive research and find out what currency is most commonly used in the country you are visiting for business.
When traveling to another country for business, it is also important to know the exchange rates between the naira and the other currencies. This will help you to budget your expenses and avoid any surprises.
Understanding exchange rates between the naira and foreign currencies is vital for budgeting and avoiding financial surprises. Resources like BusinessDay or local banks and exchange bureaus provide daily exchange rate information.
When traveling for business, having cash in the local currency is essential, as some places may only accept cash payments. Adequate planning ensures you have the right currency for seamless business transactions.