The evolution of Ugandan money

Wednesday October 10 2012

The evolution of Ugandan money

The history of money has always been synonymous with the regime in power. Below, bigger legal tender appeared during the NRM regime. Photo by Edgar R. Batte.  

By Edgar R. Batte

The Arabs and British are part of Uganda’s history; not just in the political and social arena, but in the economics of the country too.

Scanty literature shows the entry of Arabs into East Africa from the Coast, which was the main trading hub. They gave East Africa a currency in form of the cowrie shells. The shell money, which was the local name for the cowrie shells had been introduced in West Africa and used in other parts of the world.

When the Arabs moved down East, it led to the introduction of cowrie shells in this region. They were fastened together in strings of 40 or 100 each, so that 50 or 20 strings represented a dollar, or strenuously counted one by one.

In Uganda, the cowrie shells were introduced during the 17th century to facilitate the nascent trade in local produce and slavery.

For the shell money, they were denominations like coins which were the shells cut into circles with an open centre.

The head of Bank of Uganda’s monetary museum, Miriam Ssebanakitta explains that the cowrie shells worked for a long time as a form of currency, which is why the first kind of money was called Ensimbi, the original local name of the cowrie shell.

These worked up to the end of the 19th century when the scramble for Africa was imminent.

“Imperial powers flooded into the continent. Bit by bit, through conflicts and agreements, the continent was sliced into the domains of rival imperialist powers,” Prof Mahmood Mamdani, writes in his book titled, Imperialism and Fascism in Uganda.

Colonists bring their own currency
When Uganda finally became a British protectorate in 1894, the British decided to do away with the cowrie shells because, as Ssebanakitta says, they couldn’t allow this kind of currency because it could not be regulated. The British insisted on introducing a formal currency.

Meanwhile, the construction of the Uganda Railways or the Lunatic Express, like Charles Miller christened it, was underway. A force from India was used to build this railway and they were paid using the Indian Rupee.

The protectorate government, Ssebanakitta adds, initially accepted to use the Indian Rupee but later on phased it out and introduced its own East African Rupee.

Robie Kakonge in her book Images of Uganda’s Shilling notes that it was in 1905 that the Indian rupee-note was demonetised due to corruption in the form of its rampant smuggling into East Africa.

In 1919, the Imperial British East Africa Company (IBEAC), headed by Sir William Mackinon, run bankrupt. This led to the formation of the East African Currency Board (EACB), which supplied and oversaw the currency of British colonies in East Africa from 1919 to 1966.

“Uganda’s banking system and foreign exchange control were linked to those of Britain through EACB, and the London headquarters of locally established British banks. For every shilling of legal tender issued by the currency board in East Africa, a shilling’s worth of gold had to be deposited with the Bank of England as reserve,” professor Mamdani further writes.

In the year of its formation in 1920, EACB issued a new currency

“It was known as an emergency rupee because we had a company becoming bankrupt and another one taking over. So within that interim period, they had to issue a currency,” the Museum head of the central bank’s museum, notes.

The Florin
She adds that it did not circulate for long. “It lasted for a few months and another currency known as the East African Florin was issued.”

The Florin didn’t circulate for long either because in 1921, the EACB issued the East African shilling which had different series that circulated up to 1962 when Uganda got her independence.

The East African shilling had five major series as Ssebanakitta explains, “We had the King George V series. The series would follow the monarch who was in place, so their portrait was bore on them. We had the King George VI series, then we had Queen Elizabeth II. She had two types of currencies but all carrying her portrait.”

The two types of currencies came about because there were a lot of issues. The first one had seven signatures and they later had to change the signatories. Plus, there was need to harmonise languages and by 1960 it had only English and Swahili.

In 1960, Kakonge points out that the EACB headquarters were transferred to Nairobi and it was tasked with linking the British pound to the shilling, Shs20 was made equivalent to one British Pound Sterling.

The same year, the agitation for independence was at its height and Ssebanakitta intimates that the British felt that continuing to carry a portrait of their monarch on Uganda’s currency was not relevant.

The Queen’s face dropped
So they removed the portrait of Queen Elizabeth and they put a photograph of Lake Victoria, marking the last series of the East African currency. They were known as the Lake Victoria series.

The first Ugandan shilling (UGS) replaced the East African shilling in 1966 and according to Bank of Uganda literature, Uganda Currency has changed seven times since 1966.

The subsequent change in regimes also marked a change in the currency thus in the years 1966, 1973, 1979, 1983 and 1986 there were changes.

In 1966, the Uganda Shilling was established. The Government of Uganda under the Bank of Uganda Act- 1966 established Bank of Uganda in 1966. That year, Bank of Uganda issued Uganda’s first currency.

The first Currency (1966 Issue) had coins of five cents, 10 cents, 20 cents, 50 cents, one shilling and two shillings. It also had bank notes of five shillings, 10 shillings, 20 shillings, and 100 shillings. The bank note had a ‘palm’ watermark.

Amin’s currency returned the portrait
In 1973, a new issue was released. “A new government took over in 1971, and in 1973, changes were made to the bank notes.

The denominations of the 1966 Issue were maintained, and a 50-shilling note was also issued. A portrait of President Idi Amin was then introduced on the bank notes,” literature on the Bank of Uganda website explains.

Notably, when Idi Amin Dada took office as the president, he also introduced his portrait on the currency. “It all started with Idi Amin who introduced his portrait. After his departure people didn’t want to associate with him so Obote’s portrait replaced Amin’s,” Ssebanakitta adds.

In 1979 another issue was released. “In 1979, a new government came in place and made slight changes to the currency. While it maintained the same denominations, Amin’s portrait was replaced with an artistic impression of the Bank of Uganda building.

Milton Obote once again took office after the disputed 1980 election, and introduced another currency in 1982. In 1983, the denominations of Shs500 and Shs1,000 notes were introduced, and had a portrait of President Milton Obote.

New notes, no faces
“In 1985/86, another issue of currency was made, and Obote’s portrait replaced with the National Emblem in the middle of the Map of Uganda. A new banknote of 5,000 was also introduced,” she further explains.

Ssebanakitta says the use of portraits of the sitting presidents on the legal tender was outlawed following the amendment of the Bank of Uganda Act in 2000 since it was considered wasteful to issue fresh bank notes for every new head of state.

With a new government in power, a new issue was released in 1987 and new currency with a completely different design was introduced. In 1995, a new denomination of Shs10,000 was introduced. It was later upgraded.

“This currency had coins of five cents, one shilling, and two shillings. It also introduced a Shs20,000 banknote. It was also upgraded, and on November 1, 2004, the upgraded Shs20,000-shilling note was issued.

Coins and bigger notes printed
In 1999 new denomination coins of Shs50, Shs100, Shs200 and Shs500 were introduced. On December 31, 2000, notes of Uganda five Shillings, Shs10, Shs20, Shs50, Shs100, Shs200 and Shs500 ceased to be legal tender,” the head of Bank of Uganda’s museum explains.

She adds that on December 10, 2001, a new series of Shs1,000 banknote with additional features such as; a vertical embedded security thread visible with Shs1,000 running along the thread, the date 2000 and the latent image feature of number 1,000 at a lower bottom centre of the banknote, was introduced.

On December 1, 2003, Bank of Uganda issued out a new Shs50,000 note. On November 1, 2004, Bank of Uganda issued an upgraded Shs5,000 note with upgraded features.

On June 20, 2005, Bank of Uganda further enhanced Shs1,000 banknote. It has an improved cotton paper, shifting ink on the lower left front in figure 1000 that changes from green to blue when viewed at different angles. On January 02, 2006, an upgraded Shs10, 000 Banknote was put in circulation.

The latest family of currency was issued in May 2010. It has the following notes: Shs50,000, Shs20,000, Shs10,000, Shs5,000, Shs2,000 and Shs1000. The coins have not changed from the 1987 issue coins.