The evolution of currency in East Africa is a rich and complex story, reflecting the region's vibrant trade networks, colonial influences, and the development of modern economies. From the early minting of coins on the Swahili coast to the introduction of the East African shilling, the history of currency in this region offers valuable insights into its economic and social development.
Early Coinage on the Swahili Coast
The minting of coins on the Swahili coast for purposes of trade began in the twelfth century. This development was closely tied to the growth of international trade, which augmented and diversified the region’s economic system. The Islamic scholar Ibn Baṭṭūṭah declared after his visit to East Africa in the mid-fourteenth century that Mogadishu and Kilwa had elements of Islamic law and were thriving portals of trade.
Key economic centers for the Swahili, such as Kilwa, Mafia, and Mogadishu, minted their own coins, demonstrating a sophisticated level of economic organization. Archaeologists have discovered coins in these trade centers, as well as on Juani Island and the islands of Zanzibar and Pemba. According to conclusions drawn by Neville Chittick based on his archaeological excavations, coins in Kilwa came into use during the twelfth century, supplanting or supplementing other media of exchange such as cowrie shells and iron bars.
Map of East Africa showing key locations mentioned in the article.
The Shirazi Dynasty and Coin Minting in Kilwa
By the late twelfth century, Kilwa had become a central minting center for the Shirazi Dynasty. Coin minting in Kilwa began under the auspices of ՙAlī bin al-Ḥasan and continued during his successors’ reigns. The coins of the late twelfth and early thirteenth centuries became defining characteristics of the Shirazi Dynasty. The coins of Kilwa were undated but typically were inscribed with the name of ՙAlī bin al-Ḥasan, an indication that they were minted during his reign or soon thereafter. The coins minted by al-Ḥasan’s ventures were of both copper and silver.
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Silver was imported from North Africa and was relatively low in exchange value. Gold and copper, on the other hand, were imported from southern areas such as Great Zimbabwe and the Zambian copper belt. Because of gold’s high value, it was generally not worth making it into coins; it was typically used for trade rather than a currency minted for exchange.
Until the late twelfth and early thirteenth centuries, Mogadishu had been the main center of the gold trade, but with the ascent of Abū al-Mawāhib (r. 1310-1333) of the Mahdali Dynasty (fourteenth century), who conducted the coin casting for the Shirazi Dynasty on the Swahili coast, the center of the gold trade moved to Kilwa, and prosperity followed. In addition to locating coins from Kilwa, scholars have identified luxury goods most likely obtained through trade. Imported objects, notably Sāsānian glazed pots from the ninth century and Chinese porcelain, accumulated in growing numbers. Such artifacts are consistent with the increasing use of coins for luxury exchanges.
From Mogadishu, the earliest coin bearing a date is stamped 1322. The hundred-year difference between the ages of the earlier coins from Kilwa and those minted in north at Mogadishu may be attributed to the fact that in the north there was greater access to foreign coins minted in nearby regions. Kilwa, however, was far enough south-at the periphery of the Red Sea and Mediterranean trade-that minting may have become necessary earlier, as trade intensified and competition with foreign markets increased.
Significance of Early Coinage
As trade grew with Persians, Arabs, and Indians, the need for a common currency increased. The minting of coins demonstrates a qualitative and quantitative intensification of trade. Kilwa, Mafia, and Mogadishu grew from small settlements to major economic centers, as trade flooded into the towns. By the fourteenth century, Mogadishu had become a center of Islamic learning, with three mosques for foreign Muslim merchants as well as locals. Additionally, mosques had been built in Kilwa, Gedi, Kaole, Sanje, and Magoma.
The use of coins in Swahili trade also signals a new era in commerce. As trade volume expanded, new methods of exchange were adopted to increase trade efficiency. With coins, prices could be standardized and commercial exchanges made more expedient across territories separated by oceans.
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The East African Shilling
The East African shilling was the sterling unit of account in British-controlled areas of East Africa from 1921 until 1969. It was issued by the East African Currency Board. The East African shilling was introduced to Kenya, Tanganyika, and Uganda in 1921, replacing the short-lived East African florin at a rate of 2 shillings to 1 florin. The florin had been introduced because of increasing silver prices after World War I. At that time, the Indian rupee was the currency of the British East African states. The rupee, being a silver coin, rose in value against sterling. When it reached the value of two shillings, the authorities decided to replace it with the florin.
From the florin thence came the East African shilling. In 1951, the East African shilling replaced the Indian rupee in the Aden colony and protectorate, which became the South Arabian Federation in 1963. The shilling was also used in parts of what is now Somalia, Ethiopia, and Eritrea when they were under British control. Before 1941, these areas, then known as Italian East Africa, used the Italian East African lira. In 1941, as a result of World War II, Britain regained control and introduced the shilling, at a rate of 1 shilling to 24 Lire. Italian Somaliland was returned to Italy in 1949 as a UN Trusteeship and soon switched to the somalo, which was at par with the shilling.
British Somaliland gained independence in 1960, and joined what had been Italian Somaliland to create Somalia. Ethiopia regained independence in 1941, with British support, and began using the East African shilling. Maria Theresa thalers, Indian rupees, and Egyptian pounds were also legal tender at the beginning of this time, and it is unclear exactly when this status ended. Full sovereignty was restored in late 1944, and the Ethiopian dollar was reintroduced in 1945 at a rate of $1 = 2 shillings. Eritrea was captured from the Italians in 1941, and began using the East African shilling, as well as the Egyptian pound. The lira was demonetised in 1942.
Countries that used the old East African Shilling.
The East African Currency Board
The East African Currency Board (EACB) was established in 1919 to supply and oversee the currency of British colonies in British East Africa. It was established after Britain took control of mainland Tanzania from Germany at the end of World War I, and originally oversaw the territories of Uganda, Kenya, and Tanzania (excluding Zanzibar). Zanzibar joined the currency area in 1936. In 1941, parts of what are now Somalia, Ethiopia, and Eritrea started using the East African shilling while under British wartime control.
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The board operated out of premises at 4 Millbank, London SW1, one time the offices of the Crown Agents. For most of its existence, the EACB's main function was to issue and maintain the local East African shilling at par with the British shilling. This was done by ensuring that the local currency was adequately backed by sterling securities. The Board was established originally in the Kenya and Uganda protectorates. The East African Board was responsible for minting coins, printing notes, fixing the denominations of coins and notes, and, crucially, exchanging East African Shilings for pounds and vice versa at a rate of 20 shillings for one pound sterling.
Profits of EACB, i.e., revenue after deduction of all expenses and of any contributions it made to the constituent territories, were to be credited to the currency reserve fund; losses were to be debited to this fund. EACB was allowed to invest its funds in public sterling securities or in such other manner as approved by the Secretary of State. The board mainly dealt with commercial banks operating in East Africa, though in theory it had the authority to deal with any person or entity.
Originally, the East African Currency Board was set up to operate in the Kenya Colony and Protectorate and the Uganda Protectorate, upon its establishment in 1919. Tanganyika was added the following year, after the British Empire established a League of Nations mandate there. Zanzibar was added in 1936. During World War 2, they added Eritrea, Somaliland and Ethiopia, with the latter leaving to switch to the Ethiopian dollar at the end of the war at a rate of 1 birr per 2 shillings. In 1950, when the former Italian Somaliland became a UN Trust Territory administered by Italy, it left the Shilling in favour of the Somalo at par. A year later, the Shilling was made the official currency of British Somaliland and Aden, but the former left in 1961 for the Somali shilling at par.
In 1921, notes were issued by the East African Currency Board in denominations of 5/-, 10/-, 20/-, 100/-, 200/-, 1,000/- and 10,000/-, with the notes of 20 shillings and above having their denominations expressed also in pounds (£1, £5, £10, £50 and £500). In 1943, 1/- notes were issued, the only occasion that such notes were produced. 1,000/- notes were only issued until 1933, with 10,000/- notes last issued in 1947.
How The East African Currency Was Formulated
The Kenyan Shilling
The Kenyan shilling has remained a ubiquitous colonial legacy. For many societies, nations, and individuals, currencies have been used to express sublime feelings for the past, present, and indefinite future. Kenya has been part of this historical process and the saga of its currency shows the many characteristics of images, colors, attributes, and patterns that have taken many forms of subtle maneuverings.
| Country | Currency | Year of Introduction |
|---|---|---|
| Kenya | Kenyan Shilling (KES) | 1966 |
| Tanzania | Tanzanian Shilling (TZS) | 1966 |
| Uganda | Ugandan Shilling (UGX) | 1966 |
| Somalia | Somali Shilling (SOS) | 1962 |
| Ethiopia | Ethiopian Birr (ETB) | 1945 (reintroduced) |
Currencies of East African Countries.
