Historical Sketch

The East African coast came under the rule of the Sultan of Zanzibar in the early 19th century. Since mid-century, the European colonial powers began also taking interest in the region. Germany erected the Wituland protectorate in 1885, located in today's northern Kenya. Great Britain chartered the private Imperial British East Africa Company in 1888 to channelize the various activities. Germany traded its colonial interest against the island of Heligoland in the treaty of 1890. In the late 1880s, Britain had started intervening into a dynastic conflict in the neighboring Kingdom of Buganda. The East Africa Company lost its charter in 1894 and defaulted in the following year so that the British crown took over and created the East Africa and Uganda protectorates. After World War I, Great Britain took over the former German East Africa colony as the Tanganyika protectorate of 1920. Subsequently, the East Africa Protectorate was renamed into Kenya Colony & Protectorate, while "British East Africa" referred to all British territories along the Eastern coast of Africa. Beside having a common currency, the three colonies and other territories were administrated separately.

Monetary History Overview

The Imperial British East Africa Company introduced the Indian Rupee as currency for its possessions in early 1888 and commanded the production of a set of silver and subsidiary coins in this standard. After its demise 1895, the colonial administration confirmed this in the 1898 currency order and issued another subsidiary coin for use in the East Africa protectorate. No separate ordinance was passed for the Uganda protectorate, the Indian Rupee remained current there as well (and appears to be initially subdivided into 200 Kauri (cowrie) instead of 16 Annas). In 1905, another order of council was passed creating the Board of Commissioners of Currency for the East Africa and Uganda Protectorates, which enlarged the authority of the 1898 currency commission for East Africa in 1898. The East African Rupee became the new the currency for the two colonies. It was at par with the Indian Rupee but was decimal from the beginning. Due to the decline of the Indian Rupee's value against Sterling British traders requested pegging the East African currency directly to the British currncy. In 1920, the East African Florin was created and the Rupee was withdrawn at par. Since the Indian currency had a lower value at that time the further import was banned immediately. The Florin denomination was, however, found impractical. Therefore in August 1921 already, the currency unit was changed once more creating the East African Shilling at half a Florin, effective beginning 1922. The 1920 currency ordinance also prescribed the creation of the East African Currency Board, overseeing the monetary affairs of all British possessions in Eastern Africa. The Board probably began operations in mid-1920 although its constitution became effective in July 1923. The East African Shilling with a Sterling peg remained unchanged until the end of the colonial rule. After 1936, it was also adopted by Zanzibar, Aden and Somaliland colonies, and during the British occupation of Ethiopia and Eritrea it was introduced there as an interim. The independent countries Kenya, Uganda and Tanzania kept the common East African currency for some time. In 1966, they all started issuing their own currencies, each called Shilling, as well, and at par to one another until the late 1970s. The East African Currency Board ceased its activity in 1966 and was formally dissolved in 1971.

In 1967, Kenya, Uganda and Tanzania established the East African Community. It was dissolved in 1977 and re-established in 2000 with Rwanda and Burundi joining in 2009. In November 2013, the five member states signed the East African Monetary Union (EAMU) protocol providing for the creation of a monetary community with a common central bank within ten years. End 2019, the EAC council of ministers has resolved that 2024 deadline for a common currency is not attainable. A new target date has not yet been formulated.

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