The currency in circulation in Nigeria is the West African pound, issued by the West African Currency Board as the common currency of the British West African colonies of Nigeria, the Gold Coast, Sierra Leone and the Gambia. The currency system is based on sterling, and the value of the West African pound is tied directly to that of the pound sterling. West African currency is issued by the Board against the payment of sterling and, conversely, the currency is redeemable for sterling at all times. The issue and redemption take place at the rate of one pound West African currency to one pound sterling.
The West African Currency Board was constituted by the Secretary of State for the Colonies, who also issued the West African Currency Board Regulations of 1949 which presently govern the Board's operations. They authorize the Board, subject to the legislation in force from time to time in the West African colonies, to provide, issue and re-issue coin and currency notes in the four colonies. The issue of currency notes in Nigeria is authorized by the Nigerian West African Currency Notes Ordinance, which provides that the currency notes shall be a charge on the assets of the Board and "failing them, on the general revenues of Nigeria."
The Board consists of five members appointed by the Secretary of State for the Colonies. The practice has been for one of the two Crown Agents for Oversea Governments and Administrations to serve as chairman, while the other members are from the Colonial