The Currency of Nigeria is the Naira represented by the symbol ₦ and ₦1 = 100 kobo coins. In 1973, the Naira replaced the British pound as the country's official currency.
Use of Kobo coins is extremely rare. You won't need those to pay for things. If the Central Bank of Nigeria decide to re-denominate the currency in future then we may start using coins again. But until then lets focus on the notes. Click to expand image.
One could describe Nigeria as a cash economy because the use of cards and other electronic forms of money is limited to a very small section of society. It is not unusual to pay for houses or cars in cash.
Locally, the best exchange rates are offered by street dealers. Most are of Hausa origin from the North. You can often see them congregate somewhere on major city streets. If you happen to be in a taxi or car and an Hausa man signals to you, then they're probably asking if you want to trade currencies.
As a foreigner for security reasons you may prefer any Bank's bureau de change service for currencies and travelers cheques.
Check the money sections of newspapers to compare bank offers. The differences can be quite considerable.