Historicizing the Patterns and Trends of Money in African Economies

Abstract

This paper investigates the patterns and trends of money in African economies. In doing this attention has been focused from pre-colonial to post-colonial times. It acknowledges that money originated as a result of the various challenges that emanated from trade by barter. Historians and policy analysts have argued that African traders developed diverse kinds of money long before the colonial period. But the nature and potency of such money on pre-colonial African economies have not been isolated and analyzed. Thus, this study serves as an intervention to close the gap that exists in extant literature with the use of secondary sources and the velocity theory of money to study the nature of money in pre-colonial African economies. It is the opinion of this paper that the introduction of coins and paper money into African economies by the colonial masters has heightened the preponderance of African exploitations by the Western capitalists. The justification for embarking on a research of this kind is to examine the impact the introduction of coins and paper money has on African economies. The study further argues that the phenomenon marked a fundamental reduction in international and intra-state transaction costs for the Western capitalists, and deprived Africans the ability to control their indigenous money system. The paper concludes that the increase in the value of dollars and other European currencies has created a wide gap between Africans and European nations in terms of their citizen’s standard of living. It recommends that African countries must intensify efforts to regulate their economies, through prioritizing of African currencies overall foreign currencies.