African currency
African currency was originally formed from basic items, materials, animals and even people available in the locality to create a medium of exchange. This started to change from the 17th century onwards (though there is still some slavery), as European colonial powers introduced their own monetary system into the countries they administered. As African countries achieved independence during the 20th century, some retained the new denominations that had been introduced, though others renamed their currencies for various reasons. Today inflation often creates a demand for more stable (but forbidden) foreign currency, while in rural areas the original bartering system is still in widespread usage.
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[edit] African History
In pre-colonial times African currency included shells, ingots, arrowheads, iron, human beings, salt, cattle, goats, blankets, axes, beads, and many others. In the early 19th century a slave could be bought in West Africa with manilla currency; multiples of X-shaped rings of bronze or other metal that could be strung on a staff. Concubines could also be bought for sex or for any number of exchangeable items with a 'store of value'. Dowry or bride price or Lobolo items were usually of diverse nature: cows, blankets, clay pots, and so on. Coins were used in Northern and Eastern Africa from Egyptian times onwards due to ongoing trade contact with Europe and Asia. [1] [2]
During Colonial times (roughly from 1680 to 1990) the respective colonial powers introduced their own currencies to their colonies or produced local versions of their currencies. Examples include the Somali shilling; the Italian East African lira; and the African franc (in Francophone countries). Many post-colonial governments have retained the name and notional value unit system of their prior colonial era currency. For example the British West African pound was replaced by the Nigerian pound which is still divided into shillings.
A different trend is seen when the predominant foreign power relationship changes, causing a change in the currency: the East African rupee (from long-term trade with Arabia and India) was replaced by the East African shilling after the British become the predominant power in the region. Other countries threw off the dominant currency of a neighbour; the Botswana pula replaced the South African rand in Botswana in 1976. Some countries have not changed their currency despite being post-colonial, for example Uganda retains the Ugandan shilling.
Many African countries change their currency's appearance when a new government takes power (often the new head of state will appear on bank notes), though the notional value remains the same. Also, in many African currencies there is such rampant inflation that re-valuing must take place every so often (viz. the Zimbabwe dollar). There is a thriving street trade by unlicensed street traders in US dollars or other stable currency, which are seen as a hedge against local inflation. The exchange rate is grossly more favourable to the seller of the foreign currency than is the official bank rate, and is usually labelled a crime.[citation needed]
In many rural areas there is still a strong bartering culture, the exchanged items being of more immediate value than official currency (you can eat a chicken but not a coin). Even where currency is used, haggling over prices is very common. This is in contrast with the pre-independence Rhodesian dollar which was always a strong currency linked to the British pound.
There is a planned West African Monetary Zone among Anglophone African countries planned for implementation in 2009. Similarly in East Africa, the member countries of the East African Community plan to introduce a single currency, the East African Shilling in 2012. [3]
The African Union has proposed a single currency, the Afro, for the entire continent by 2023.[4]
