A confusion of currencies.

Author:Versi, Anver
Position:African currencies - Editorial
 
FREE EXCERPT

Take a look at the currency table on page four and prepare to be amazed. The current conversion rate for Angola's new kwanza is 352,736 against one pound sterling! Three hundred and fifty thousand new kwanza against one pound! The zaire is not far behind - 254,314.20 against one pound. Anyone would be forgiven for thinking these were telephone numbers instead of currency conversion rates. Of what use are these currencies?

Mind you, in both cases, the current rates are an improvement from the recent past when the new kwanza scaled the dizzying heights of half a million against sterling. These are not serious currencies - they are a joke. Three pounds sterling and you are a millionaire. You need a good pocket calculator to work out the price of a soft drink and if you want to buy anything more expensive, like a meal at a hotel, a new shirt or a pair of shoes, throw out your pocket calculator - there is not enough space in the display window to reveal how many billions you have to pay.

Why do some African countries continue to pump out these worthless bits of paper? No one seriously uses them anyway: The operative currency is the US dollar. All such currencies do is to give an illusion of money but actually get in the way of business.

Why is it necessary for every single state, no matter how tiny, to have its own currency? Before colonisation, Africa had a single currency, the cowrie shell, which was used from west to east. During colonial times, there were a small handful of currencies such as the rupee, the dinar, the shilling and the escudo. These currencies had value and were freely exchanged across borders. People and goods moved about with little or no hindrance.

After independence, particularly in anglophone Africa, individual sovereign currencies suddenly became all the rage. In Kenya you could be thrown in jail for tearing up a currency note. A bewildering array of shapes, sizes, illustrations and denominations began to sprout overnight. You had to remember not only what each new currency was called, what it looked like and how much it was worth but also whether the president, whose head invariably appeared on notes and coins, was still in power.

Little wonder that many people simply threw their hands up in disgust and totally refused to have to deal with any currency that came from outside their borders. At a stroke, long and established trade routes were dismantled and well-ordered business patterns were scrapped.

Cotton cloth and...

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