The only reason an Arabic inscription is, in combination with English, on Nigeria’s currency today is the influence of history.
It has been so from the very first time paper currency was printed for Nigerian use (either for British or indigenous Traders). Before the Nigerian pound (replaced in 1973 by Naira and Kobo), the old West African Currency Board (WACB) pound (also known as West African Pound (WAP)) was in use, first from 1913 in restricted distribution, and then more generally from 1946 until 1959 in Nigeria, 1957 in Ghana, 1965 in Gambia and 1964 in Sierra Leone. Liberia also used the currency until 1943 when it changed to the U.S. dollar. British Southern Cameroon used it too, until the plebiscite of 1961.
The WAP – from which the post-independence currencies of Nigeria, Ghana, Sierra Leone and Gambia were derived – also had Arabic inscriptions on it.
The original reason for Arabic was that Frederick Lugard (who was the first Commander of the West African Frontier Force (1897 – 99) and later the first High Commissioner of Northern Nigeria (1899 – 1906); and later the Governor of the protectorates of Northern and Southern Nigeria (1912 – 1914); and finally the first Governor General of post-amalgamation Nigeria (1914 – 1919 ); identified Arabic the only written “indigenous” language anywhere in Nigeria/West Africa, particularly among the widely spread Hausa trader class across the region. (See Lugard report to Parliament, 1919) Arabic inscriptions were, therefore, used as symbols, not only for currency but even on official West African Frontier Force badges etc… which persist until today in Nigerian Army badges etc…
In the mind of the British colonial administrators in Nigeria – whose administrative experience was heavily influenced by their military service in Northern Nigeria and other parts of the sahel belt of West Africa – rightly or wrongly, Arabic writing was to West Africa as Latin was to Europe. In addition to English, therefore, they used Arabic to domesticate British instruments meant for local use. The fact that such symbols still exist is one of many scars of the era of colonial rule. However, not all former British West African colonies still use Arabic translations on their currencies as a footnote to history. Nigeria and Gambia do. Ghana and Sierra Leone do not:
In the West African Francophone colonies, where the local Franc (CFA) was adopted, the French policy of association and assimilation persisted, and the language used was exclusively French. No outlet was allowed for any indigenous written language.
In summary, the persistence of Arabic writing in some Nigerian State instruments to this day is the legacy of one man – Lord F.D Lugard – “our” first Governor General.
By the way, coincidentally, the word “Naira” means “big eyes” in the Andean language of Quechua, where it is used as a name for girls. It is also a Spanish name – Naira o Nayra – for both boys and girls. We were probably not aware of this in 1973 when – in an effort to escape from the “colonial” word “pound” – we adapted the name “Naira” from the word “Nigeria” – which in of by itself was originally suggested by then Flora Shaw (later Lady Flora Lugard) by collapsing the colonial geographical phrase “Niger-Area”. “Niger-Area” became “Nigeria” on January 8th, 1897.
Even the word “Niger” is not indigenous. As I have observed elsewhere, the word “Niger” is actually a Greek imposed Latin name, which means “Black” or “very dark brown”. Needless to point out that the word “Area” is English.