Sachin Walls
If you're travelling to Nigeria, it's worth knowing that the local currency is the naira, denoted by the code NGN and the symbol ₦. Airports and hotels are relatively safe places to exchange money in Nigeria, but they don't usually offer the best exchange rates. It's recommended to only change a small amount of money at the airport and then seek a better deal elsewhere. There are several large exchange services in Nigeria, including Sulah, which has branches at international airports. ATMs are widely available in big cities and hotels, and foreign credit and debit cards are usually accepted in large Nigerian cities, especially in tourist areas.
| Characteristics | Values |
|---|---|
| National Currency | Naira (NGN) |
| Currency Exchange at the Airport | Possible, but not recommended due to poor rates |
| Currency Exchange at Hotels | Possible, but not recommended due to poor rates |
| Currency Exchange in Major Cities | Available at banks, ATMs, currency exchange services |
| Currency Exchange Services | Western Union, Sulah, Travelex |
| Currency Exchange Online | Western Union, Tamsey |
| Accepted Currency | USD |
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What You'll Learn
Airport exchange rates are often poor
Airport exchange desks are easy to find and use, and they are usually open 24/7, so you can obtain cash regardless of your flight's arrival or departure time. However, you will likely get less money back due to higher exchange rates and additional fees.
To get a better deal, it is advisable to plan ahead and explore other options before heading to the airport. Local banks often offer competitive exchange rates and lower fees than those found at airports. You can also compare exchange rates online and order your currency for delivery to your doorstep.
If you need Naira immediately upon arrival in Nigeria, consider exchanging a small amount at the airport and then converting more cash somewhere with a better exchange rate.
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USD is widely accepted
Although USD is accepted across Nigeria, it is beneficial to carry large denomination notes, such as $50, to get a good NGN exchange rate. It is also important to ensure that the notes are in good condition, as damaged or torn currency may be refused.
If you are looking to exchange currency, it is recommended to use a third-party app or a service such as Wise, which offers transparent fees and a fair deal. You can also use a mobile app such as Tamsey to send money to yourself and collect it at various cash pick-up locations in Nigeria.
ATMs are widely available in big cities, and foreign credit and debit cards from major providers such as Visa, Mastercard, and American Express are generally accepted in larger Nigerian towns and cities, especially in tourist areas.
It is worth noting that there have been changes to Naira notes and coins in circulation, with some smaller denominations being removed or replaced with coins. Therefore, it is important to familiarize yourself with the currently accepted notes and coins before visiting Nigeria.
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Naira is hard to convert back
Nigeria's local currency is the naira, denoted by the code NGN and the symbol ₦. Introduced in 1973, the naira initially rivalled the US dollar in strength due to Nigeria's vast oil reserves. However, over the years, the naira has depreciated significantly due to inflation and declining oil prices. This depreciation has made it challenging to convert naira back into other currencies, such as the US dollar.
The naira's volatility and susceptibility to fraud make it risky to convert back into other currencies. Nigerians seeking to preserve the value of their earnings often consider buying dollars and holding onto their naira. However, this strategy can backfire due to the volatile nature of foreign exchange rates, which fluctuate in response to economic and political events. Additionally, the naira market has been affected by contradictory statements from officials and disagreements between the central bank and the finance ministry over its management.
The central bank's decision in 2017 to implement a dual exchange rate system further complicated the situation. One rate, pegged to the US dollar, was used for government transactions, while a weaker, market-determined rate was left for everyone else. This led to the emergence of a currency black market, where the naira was valued lower than the official rate, creating a challenge for travellers and businesses needing to exchange currency.
Converting naira back into other currencies can also be subject to various fees, including currency conversion fees, ATM usage fees, and international transaction fees. Airports and hotels provide a convenient option for exchanging small amounts of money, but they typically offer less favourable exchange rates. It is recommended to exchange only what is needed immediately and seek better exchange rates elsewhere for larger conversions.
To avoid the challenges associated with converting naira back into other currencies, some Nigerians have explored alternative investment options. These include purchasing apartment property, investing in gold, or using online platforms like Upwork and Fiver to earn in foreign currencies directly. Additionally, partnering with relatives and friends abroad to channel investments back to Nigeria is another strategy to preserve the value of their earnings.
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Black market exchange exists
Nigeria has three currency exchange markets, with varying rates. The Central Bank of Nigeria (CBN) establishes an official market rate for foreign currencies, which acts as a reference for foreign exchange transactions. Banks, foreign exchange bureaus, and financial institutions with a CBN license can access this market. The official rate is managed as a float system, allowing market forces to influence the rate while curbing excess volatility.
The second market is the parallel market, also referred to as the black market. This market diverges from the government's official rate and is susceptible to high volatility influenced by factors like political instability and speculation. It is a willing buyer, willing seller market, influenced by supply and demand dynamics. The parallel market rate often trades at a premium to the official exchange rate and is accessible to all. It is often a more accurate reflection of the true value of the Naira due to its lack of regulation. The black market thrives in Nigeria due to the challenges of accessing foreign exchange through official channels.
The third market is the supplier market, established to increase market liquidity for foreign exchange and guarantee prompt execution for eligible international trade transactions. Suppliers to this market include exporters, authorized dealers, and portfolio investors. Participants in this market can be any "wholesaler" with foreign currency seeking to swap for Naira at a market-determined rate rather than the CBN's official rate.
The black market exchange rate for US dollars to Naira in Nigeria can be found on websites such as NgnRates.com and AbokiFX.com. Rates vary depending on location and the amount of currency being exchanged. For example, in Abuja, Wuse Zone 4 Plaza, the rate for US dollars to Naira is 1 US dollar to 1560-1590 Naira. In Abeokuta at Itoku Market, the rate is 1 US dollar to 1585 Naira.
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Use official exchange services
When travelling to Nigeria, it is recommended that you use official exchange services to change your money. While there may be individuals on the street offering higher exchange rates, it is safer to use official channels. Official bank cash exchange services will be able to convert your typical US dollars into Nigerian naira.
It is best to change $100 bills, as smaller bills may be difficult to exchange and will often get you a poor rate. If you are unable to obtain $100 bills before your trip, consider changing your money in larger amounts to get a better rate. Official exchange services will also be able to advise you on the current exchange rate so you can be sure you are getting a fair deal.
It is worth noting that credit cards may not be widely accepted in Nigeria, especially in smaller restaurants and establishments. Therefore, it is advisable to bring cash and exchange it at an official bank or airport ATM. Airport ATMs will likely offer more convenience and safety, but the rates may be less favourable than those offered by banks in the city.
Additionally, some sources suggest asking for "Aboki exchange", which is a black-market money-changing service. While this option may offer higher rates, it is important to exercise caution and be aware of the potential risks involved in using unofficial currency exchange services. It is always recommended to use official exchange services to ensure the safety and security of your funds.
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Frequently asked questions
There is no set limit to how much currency you can exchange at the airport in Nigeria, but it is recommended that you only change a small amount, as exchange rates at the airport are often unfavourable.
Exchange rates vary across Nigeria, but you can check the daily rates offered by Nigerian exchange offices by looking at the Everdon website.
The national currency of Nigeria is the naira (NGN). It can be tricky to source naira outside of Nigeria, so it is recommended that you bring US dollars (USD) or euros (EUR) and exchange these for naira when you arrive.
You can exchange currency at banks, ATMs, currency exchange services, airports, and hotels. Major exchange services in Nigeria include Sulah, Everdon, and Western Union.
There have been recent changes to the naira notes and coins in circulation, with some smaller denominations being removed or replaced with coins. It is important to be familiar with which notes and coins are still being accepted when you visit Nigeria.
