Long before colonization of Africa there were many forms of currencies used in the continent, which included certain materials, animals, and even people. However, at the beginning of the 17th Century, the European colonists introduced a new form of monetary system. After independence in the 20th century, most countries retained the currency brought by the colonial powers, while others renamed their currency. By 2013, Zambian Kwacha (ZMW) was the strongest currency in the continent.
History Of Currency In Africa
Some of the items used as currency before the colonial rule in Africa included shells, ingots, gold, salt, cattle, blankets, arrowheads, axes, iron, and beads among others. During the slave trade in the 19th century, slaves could be bought with Manila currency, rings of bronze or other metal that could be used for ornaments. During the colonial period, different colonial powers introduced different currencies in their colonies such as the Italian East Africa Lira and the African Franc among others. After independence, most countries retained the currency, while others changed the name, for instance, the British West African pound was replaced with Nigerian pound and finally changing to Nigerian Naira.
The Ever Changing Currency In Africa
Change in currency could reflect the change in power in the region, for instance the East African Rupee was used in East Africa as a result of the trade relationship between Arabia and India. However, the East African Shilling was adopted when the British became the principal power in the region. There are some countries that stop using the dominant currency of their neighboring country (such as the South African Rand, which was replaced by Botswana Pula in Botswana in 1976). Some other countries have not changed their currency even after attaining independence like Uganda that has maintained the Ugandan shilling all through.
Many countries in Africa also modify the appearance of the currency whenever a new government takes over, and often the new head of state appear on the banknotes. In most rural areas of Africa, there is still a culture of bartering where an item is exchanged for another of immediate value rather than using the official currency. Some African regions like West Africa are planning to introduce West African Monetary Zone comprising of Anglophone countries to have a single currency. Similarly, the members of the East African Community are also planning to introduce a single currency, the East African Shilling.
The Kenyan shilling, abbreviated in the stock exchange as KES, is the official medium of exchange in Kenya. The shilling was introduced in 1966 and replaced the regional East African Shilling at the same valuation. The shilling is made of 100 sub-units known as cents. However, due to the devaluation of the shilling, the cents are no longer in circulation and are only used for the purpose of accounting. The Kenyan shilling is the strongest currency in the East African region.
The Zambian Kwacha, known in the stock exchange as ZMW is the currency used in Zambia and is currently the most valuable in the continent. It should be known that the Kwacha is also used in Malawi but known as the Malawi Kwacha. Kwacha is a local name which means “a new dawn”. The Zambian Kwacha was originally known as the Zambian pound which was introduced after Zambia gained independence in 1964 and replaced the colonial Southern Rhodesian pound. The Kwacha is made of 100 sub-units known as "ngwee".
South Africa Rand
The South African Rand, abbreviated as ZAR, is the legal tender used in South Africa, Lesotho, Swaziland, and Lesotho. The ZAR is the only currency in the continent which is officially used in four countries. Introduced by the colonial government in 1961, it replaced the South African Pound and was once the most valuable currency in the continent. However, the Rand depreciated in value in the 1980s due to international pressure and sanctions due to the apartheid government. The Rand is made of 100 sub-units known as cents.
The Libyan Dinar, known as LYD in the stock exchange, is the official medium of exchange in Libya. The Dinar was introduced into the economy in 1971 and replaced the pound at the same valuation. The Libyan Dinar is made of 1000 dirham which was originally known as milliemes. The Dinar saw a fall in valuation in 2011 during the Arab Spring and the subsequent overthrow of Gaddafi. After the fall of Gaddafi, the Libyan Central Bank started the process of replacing the circulating notes which bear the image of the deposed leader.
The Zimbabwe dollar of Zim dollar also identified in the stock exchange as Z$ is the official currency in the country, which was in circulation in the economy until 2009. The Dollar was introduced in 1980 and replaced the Rhodesian dollar at the same dollar rates. The Zimbabwe Dollar saw the biggest inflation of any currency reaching an unprecedented level of 1000%. This hyperinflation made the government demonetize the currency in 2009 allowing for international currencies to be used instead.