Over the past 50 years, the naira’s buying power has evaporated. In 1973, ₦100 could buy multiple bags of rice in Nigeria. Today, in 2025, it can barely cover two to four sachets of water in some places. That’s not just inflation; it’s a historic collapse in purchasing power.
When the naira was introduced to replace the Nigerian pound in 1973, it was worth more than the US dollar. In fact, one dollar traded for just ₦0.66 at the time, according to the Central Bank of Nigeria. Oil was booming, government revenue was high, and the new currency had public confidence behind it.
Fifty years later, the picture is very different.
A steady slide
The naira’s sharp decline is closely linked to Nigeria’s dependence on oil which brings in over 90 percent of foreign exchange earnings and its heavy reliance on imported goods.
When global oil prices crash or production falters, the country earns fewer dollars. Yet the demand for imports; food, fuel, medicine, vehicles, machines or equipment remains unchanged. That imbalance keeps the naira under pressure.
The consequences have been painful. The naira has lost 99 percent of its value against the US dollar since 1980. In that year, ₦1 was worth $1.60. By 2024, it had dropped to over ₦1,500 per dollar in the official market and even higher on the streets.
What ₦100 used to buy
To understand how deep the rot runs, consider what ₦100 once bought: In 1980, ₦100 bought 500kg of maize, enough to feed a family for months. By 2000, it paid for two liters of petrol or a school math set. In 2010, it covered a bottle of soda or a loaf of bread. Today, it barely gets four sachets of water.
A ₦100 note, once the symbol of middle-class purchasing power, is now virtually worthless in daily transactions.
What went wrong?
The collapse wasn’t sudden. Decades of missteps from military-era policies to modern reforms, compounded its decline.
During the military years in the 1980s and 90s, Nigeria ran budget deficits, printed money, and borrowed heavily.
Structural Adjustment Programmes under the IMF in the late 1980s led to devaluations. From 1994 to 1996 alone, the naira lost more than 65 percent of its value, according to IMF records.
Even more recently, reforms aimed at stabilising the currency, such as removing fuel subsidies in 2023 and floating the naira led to further short-term pain, with no clear end in sight.
Inflation surged past 30 percent in 2024, its highest level in nearly three decades, according to the National Bureau of Statistics (NBS). Although it has eased to 23.71 percent, it remains well above the target rate.
The Human Cost
As the value of the naira shrinks, the cost-of-living soars. Food, transport, school fees, everything costs more. For many families, three meals a day have become a luxury. Small businesses, which rely on imported goods, struggle to stay afloat. Even savings lose value by the day.
In 1990, the minimum wage could support a household. In 2025, even after a raise to ₦70,000 per month, it barely stretches past the weekend, eaten up by food, transport, and rent, according to a survey by BusinessDay.
Capital market analyst Oyekan Idris notes, “While the CBN’s efforts to manage inflation through monetary policy are commendable, the average Nigerian is yet to feel the impact. The cost of living continues to rise, and many households are struggling to meet basic needs.”
Can the naira be saved?
There’s still a path forward but it’s not a quick fix. Nigeria needs to build resilience by producing more of what it consumes: food, energy, and manufactured goods. It needs stable policy, lower reliance on imports, and stronger institutions.
Countries like Indonesia and Vietnam have turned around similar stories not by magic, but by decades of consistent reform, export-driven growth, and investment in local industries.
The naira is no longer just a currency; it’s a mirror of Nigeria’s economic vulnerabilities. Its revival depends not only on policy tweaks but on bold, long-term reform. (BusinessDay)
