Naira notes.
Nigerian currency is called Naira. It comes in denominations of 5, 10, 20, 50, 100, 200, 500 and 1,000 Naira notes. They also have coins called kobobut no one uses them anymore. I’ve been here for 9 months and not once have I seen a kobo. The current exchange rate from Naira to U.S. dollars is about 153 Naira for $1. So 1000 Naira is about $6.50. If you are buying a car for $12,000 dollars, you will pay about 1.8 million Naira. Imagine what the amount of cash would look like. Checks are more common than credit cards but they are still scarce. So as a tip for travelers, bring cash, not travelers checks or credit cards to Nigeria.
The vast majority of Nigerians do not have a bank account. An article stated that out of the 150 million or so people who live in Nigeria, only 22.5 million bank accounts exist. Many people cannot use banks because they are illiterate. If you can’t read, you cannot maintain a bank account. Many people do not want to deal with the wahala and stress of opening a bank account. When I went to open mine, I filled out my form, handed over my wad of cash then had to wait two whole weeks before I received my bank account number and my ATM card. When I returned a week later to see how far, the bankers said my money was in “ibi kan ti won n toju dada (one place they are taking care of it well).” Two weeks with no word about the whereabouts of my money? It’s no wonder many Nigerians distrust the banks and therefore choose to keep their money in a box under the bed rather than a bank account.
A recent report from the World Bank said $6 million worth of transactions takes place on the streets of Nigeria everyday. These are hand to hand exchanges of pure hard cash, no swipe of the plastic included. This probably explains why a lot of the Naira notes I get are totally brown and hardly discernible. But the Central Bank of Nigeria–the bank that prints all the Naira– wants to move away from the dependence on cash. They recently announced a plan to limit the amount of cash an individual can withdraw to N150,000 per day. That’s about $1,000 per day. The new policy aims to start June 1, 2012. While this is still highernthan the limits on ATM withdrawal in the U.S. of $200, $400 or $600 depending on the ATM, it might impact Nigerians who pay for everything, even their homes in cash.
I come from a country that covets the credit card, we even have key chain credit cards now. Many people don’t even carry cash anymore in the U.S. Living in a society that is entirely cash dependent is refreshing because I am never worried about paying my bills on time or my credit score. I still have my credit card here, tucked away in a safe place (I haven’t used it once). I don’t know if any other country is as cash dependent as Nigeria or what will happen to Nigeria as banks start limiting cash withdrawals and issuing credit cards. In the mean time we will watch with wallets open.
North of Lagos 
Though I’m in school in the U.S I have a copy of every Naira note in my wallet (1 Naira excluded of course). I think it makes me feel more Nigerian.
Another great and balanced article.
I do believe the banking system is gradually improving and that people are slowly embracing the use of Cards (Debit cards NOT credit cards).
One of the things I hated when i ued to go home was the need for me to have thousands of pounds in cash on my person, but now I can just transfer money into my new naija account and use my card when I in town.
Good work.
Thanks for the post, we are just glad that you didn’t completely put a negative spin on your experience like so many people do. Nigeria is getting better and if Nigerians keep staying connected-one day we will even have electricity 24hours a day everywhere. Sending Money Home to Naija Is For Good.
I’ve been in Malawi for the last 2 months (I’m from London) and can say it’s definitely not just Nigeria that is a cash society. Although VISA is definitely increasing it’s presence in Malawi (adverts indicate this) I think it will be a long while before chip and pin becomes the norm and at the moment it’s just used for ATM withdrawls. I think it’s made me budget more effectively and not spend as much – hard cash is just more real than plastic!! lol
Great blog – I wonder if you’ll return to Naija after your studies?
I enjoyed reading your blog. And I’ve become a fan.
Have you tried palm wine and suya?
Titi,
Great post! I must say I am extremely happy to have found your blog. I am looking to do the EXACT same study program (study Igbo in Ibadan from July-December). I am in contact with Mrs. Bankole of IP and hopefully will have details finalized very soon.
I would love to chat about your experience and would appreciate any advice you can offer about establishing a relationship between my host uni and Ibadan.
Hope to hear from u soon.
Study Igbo in Ibadan? how does that work? You should go to somewhere like UNN, Nsukka so you can speak with the natives around the school
I did not know that buying a cow is a common thing in Nigeria..even though my house is 5mins away from the abattoir at Bodija market. Similarly, if you want to buy a car, you don’t necessarily need cash as well. I bought one recently and i gave the car dealer a cheque. I asked him to call me once the cheque clears into his company’s account, then I can pick up my car! Interesting article though but I don’t know if in fact Nigerian is really ready for a cashless economy. Amongst the sophisticated business folks, a lot of people have bank cards with visa and mastercard logos (I do have one) and I am able to use my card both within and outside Nigeria. I guess having access to these services might be impractical for a woman selling “boli” on the road or a mechanic repairing bicycles. So I really think Nigeria is getting there soon to be a cashless economy but at the moment it is only restricted to people who really understand the basics of using these services and as you rightly pointed out, education might be the reason for some of the issues we have with carrying to much money for transactions. Illiteracy is one major disease we need to eradicate in Nigeria to move us forward! Besides illiteracy, infrastructures that will ensure a crime free environment, constant electricity, functional and fast banking systems, efficient government and regulatory institutions and transparency both in the circulation and delivery of information need to be in place before a cashless economy can be an idea that is practical in Nigeria!
in my time at ui, u couldnt get change for 5 naira!
and i saw a few kobo…
this was in 1992. they called the 1 naira gold coins ‘babangida bullets’.
u must go out from naija, say to cotonou. even for a day or u cannot say u know west africa. the contrast is astounding.
in 1992 also no credit cards. i have always believed the reason is that VISA will not allow their use in Nigeria because they would expect massive 419 fraud.
i would like to know if they are actually accepted anywhere in naija at all?
furthermore i have used my card in 94 countries but not naija
Hi Cara,
Once again you have delivered on a Naija trending issue.
Cash dependency has been a major headache for CBN governors both past and present. Soludo (immediate past governor) tried to reduce the quantity of cash (not necessarily amount) that people log around in GMG bags by trying to revalue the Naira, that idea never materialized.
Now Sanusi wants to tackle the same issue by imposing withdrawal limits. But first of all, there needs to be a replacement in place before setting a deadline for massive cash withdrawals. He should remember that “if you want to buy a house, you whip out a massive wad” – though we do not “buy” houses with cash per se. Building houses is more common and that’s a gradual spending process.
“You don’t hear any Nigerians talking about payment plans, mortgage rates or credit card debt.” – Yes, Nigerians are proud to say that they are mostly debt-free. All those houses you see there are actually owned and foreclosure is not a word you will ever hear in Naija.
“… a lot of the Naira notes I get are totally brown and hardly discernible” – Really? The lower denomination notes (which are the most handled notes) are now made with a kind of polythene material that they do not turn brown easily. The story was different about 5 yrs ago … lol
You go miss Naija ooo cos I can see you are so into the Naija way of life.
nice! I am quite impressed how you have immersed yourself in the total Nigerian experience – culture, art, language, entertainment, politics. Thats the way to think and so speak like a Nigerian (although as a student/fresh graduate in UI, I had stocks. so did some of my friends). Anyway keep it up!
Nice one Cara. You were spot on. As others have commented, this is just another example of those in power trying to make changes without the necessary infractures in place to facilitatate the proposed changes. Not a bad thing to get the economy to be less reliant on cash transactions. However, anywhere else in the world where such a drastic change is about to be introduced, years will be given to educate the people on how this is a better way of doing business. The banks will be updated and their affairs will be updated. Not in Nigeria. Those in power will give you months if not less. No long running advertisements to educate the people, no infractures in place to make sure that ordinary citizens are not inconvenienced by this change. It is just another example of how those in power are out of touch with the citizens of the country the are supposed to represent. The proposers are not only out of touch, they could not care less about the plight of ordinary people. Why? Anything they do, is bound to benefit them one way or the other. It is not going to affect the elite in any way. They will still be able to carry on as before. It is ordinary people that will suffer. The country will not have stable power supply because it is those in power or those very close to them that makes a lucrative living from the importation of power generators.
People seem not to like it when someone says that majority of Nigerians are illiterate. I think it is true. That is not to say that we do not have many literate citizens in the country, but when you look at the vast population as a whole, majority are illiterate. Not surprising as education at the lower levels is not free. For a lot of parents, it is a choice between having a roof over your head and food on the table, or sending the children to school. This is evident in the millions of school age children selling stuff on the roads in our towns and cities. Yes, it is a good idea, but it is an idea based on greed. It is is another way for the upper class to make even more money at the expense of their fellow men and women. Until those in power really take up these posts solely to improve the lives of the people they claim to represent, there will be no change in the country . At the moment, as it has been since Independence in 1960, our leaders are too out of touch, too selfish and self-centred to make any meaningful improvement in the lives of those they claim to serve. This new law on limit to cash transactions is borne out of greed than anything else.
wow. . . am impressed am just seeing this for the first time. . . .titi sho wapa
I saw this blog yesterday and spent considerable time going through all your previous post.I am impressed by your determination to carry this through.
We have always being blessed with foreigners who have taken time to understand the culture warts and all and understand the Yoruba, and by extension the Nigerian world view.
You are presently in a country made up of many nation states and with huge potentials and challenges.
Enjoy your stay.
You have one more fan.
Titilayo, mo dupe lowoo re fun iriri ati eroo re ti o n so fun araye. Ooto ni gbogbo nkan ti o ko, sugbon kii se ejo wa beeni kii se wipe o rorun lati maa gbe owo kisi kaakiri. Ohun ti fa ni wipe awon ohun amayederun (infrastructure) ni ko si tabi ko to. Fun apeere, lana, mo lo si ileifowopamo lati lo gba owo lenu ero, mo duro wakati kan ati ogbon iseju mi o ri owo gba won ni “network” ni ko da, mo ba wo inu ile lo gba owo ti mo fe gba. Bakan naa, ti eeyan ba fe ra oja lori ero alatagba, isoro nla ni a maa n koju ti aba fe lo “debit card” ti opolopo n pe ni “ATM”. Ni ero temi, ti a ba le se eto awon ohun amayederunu
un wa, we’ll be like America some day that is very close… Thanks once more for your thought and experiences about Nigeria that you share with the world. Ire o!
Cara,
I am a regular reader of your blog. However, I disagree with your views on this writeup(Cash makes Nigeria go round). For instance, you said ” I’ve never heard a typical Nigerian (I’m excluding the upper upper class here) talk about how their stocks are doing”. This is not true, a large percentage of middle class in Nigeria are involved in stock markets. You’re in a student environment and you don’t expect frequent discussions about stocks. I think your views are biased on Nigerians keeping their money under the bed.You need to do a thorough research before concluding on this fact. You made look as if 90% of Nigerians are illiterate. That is the danger of a single-sided story.
The cash driven economy works for the society and that does not make the credit-driven society a better one. Most middle class families in Nigeria build their houses with their hard earned income within 2- 5 years and not paying mortage for the next 30 years of life.
Do a thorough research before publishing any write-ups.
The reality is the majority of Nigerians do not use banks. I am not insinuating that 90 percent of Nigerians are illiterate. I did not try to convey that false statement. I purely stated it as one of the reasons some people do not use banks here. It is purely true that some people who do not use banks keep money in boxes in their house. Under the bed is one place that box might be. I am also not arguing that a credit card society is better. I do not say that anywhere in this post, nor do I think that.
This is one of the reasons Nigeria does not move forward. People like Colen think things are “not too bad”. This article is fairly accurate. The middle class Nigeria which you speak of is a very small percentage of the entire populace. A lot of Nigerians do not have the same access to education and all that which you and your friends have.
Whenever there is an article like this written about the state of the country, individuals like you who are not in touch with reality keep making baseless arguments.
And can I just say that the cash-driven society is not working at all. do you know how many people have been robbed/killed on their way from the bank just because they were carrying that “black cash bag?” I used to work in a bank in Lagos and the volume of cash handled is just ridiculous. Besides,a cash-less society doesn’t automatically mean credit-driven.
Another reason people do not use banks is the bank charges which are not properly communicated to the customer during the account opening charges. I know how much we used to charge as COT for current accounts. Also, do you know that banks charge you to withdraw your money from the ATM? and there’s a 50% chance that no cash will be dispensed but your account will be debited and then you spend the next two weeks hoping the transaction is reversed.
i could go on but whenever you read a report about the sorry state of affairs in the country, you better believe it. things are that bad, the standard of living is very lowand we have a very long way to go.
Titi, great stories. You have a large fan base in Chicago, keep in touch when you come home. Being a fellow Nigerian, living in the US for 29 years and 10 years over there, it’s a culture shock. I was still wondering if you ran into the CNN journalist in Lagos.
This is pure ‘nigerian’ speak – ‘When I returned a week later to see how far,…’
Very impressive – now you speak English like a Nigerian!
So true! That’s one of the biggest culture shocks I received when i got here; seeing that people hardly have or use cash….I can imagine how the opposite culture shock would’ve been for you…
Ori e o foka sibe !!! 🙂
Cara,
Once again, you have blown me away! Bravo!
Hugs,
Michele
In Europe, A Nigerian Pastor offered the highest bid and paid cash for a building formally used as a departmental store, to be used as a worship center. Asked why he had to pay cash and not through credit, he simply says, ‘where I come from we don’t buy on credit’. Yes, its ‘cash ‘n’ carry’ in Nigeria. Titi, I find this piece very Interesting.
Kindly tag me when you publish on juju/oogun.I seriously want to know your perception.
Excellent article, Titi :)! When we visited “the first 2-storey building in Nigeria” in Badagry in 2009, the tour guide showed us Kobo coins that they store in their safe. This was part of the story of slavery in Nigeria – very interesting & humbling.
Nice one CaraTiti,I dey always gbadun you.Actually some banks give out ATM cards immediately one opens an account with them,with a little research you may know which.Personally I’ve found it frustrating making payments/purchases over the internet.But I believe Naija will get there one day.Some form of credit transactions still occur in Naija,but my people are very skeptical because no one knows tomorrow,and a bird in hand is worth. . . .millions in the ocean.Titi have you heard about juju?
Yes, I’ve heard about Juju. Maybe I’ll do a post about that soon.
Thank You Titi for this post…aout the CBN and cash in Naija.Its such a pity that we have learned people in the helms of affairs and yet they want people to feel like they are doing their job….anm talking about CBN.
A country without stable power supply and where credit and ATM is never used in Online transaction.The idea is good but the Infrastructure is not yet in place (Electricity and internet).
If Electricity is available …Internet will come(Now its awfully slow and you pay so much to use it) and So many things will spring up.people will begin to use computer more….
The level of people who use cREDIT CARD AND atm FOR ONLINE Transaction is extremely low because of poor infrastructure.WHY DO THEY WANT TO FRUSTRSATE PEOPLES Life again with this new Cash deposit and withdraw policy….I pray it will never see the light of the Day…Nigeria is not matured enough to implement this things…Paypal arent listing Nigeria on their gateway…Western union doesnt originate from Nigeria.
In India here even the Thrift collector uses a swipe machine to collect his daily thrift.
They want to enrich the banks on the expense of the poor people.A cash less society will not worrk until major infrastructure to drive them is in place.
Pleas write an Article on Electricity In Nigeria.WHat Nigerians Need is Electricity(Stable Power).
Yemi
from India
I did write one about electricity: http://wp.me/pV7Nm-ah
Great article.
I like reading your blogs and tweets, keep it up. I’m glad you enjoyed your stay in Nigeria and have kept a balanced blog.
Take care and God bless
Ladipo