Money, Credit, and Banking in Colonial and Postcolonial West Africa Akanmu G
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Kennesaw State University DigitalCommons@Kennesaw State University Faculty Publications 2002 Money, Credit, and Banking in Colonial and Postcolonial West Africa Akanmu G. Adebayo Kennesaw State University, [email protected] Follow this and additional works at: https://digitalcommons.kennesaw.edu/facpubs Part of the Economic History Commons, and the Finance Commons Recommended Citation Adebayo, A. G. (1994). Money, credit, and banking in precolonial Africa. The orY uba experience. Anthropos, 89(4/6), pp. 379-400. This Article is brought to you for free and open access by DigitalCommons@Kennesaw State University. It has been accepted for inclusion in Faculty Publications by an authorized administrator of DigitalCommons@Kennesaw State University. For more information, please contact [email protected]. Anthropos 89.1994: 379-400 Money, Credit, and Banking in Precolonial Africa The Yoruba Experience A. G. Adebayo Abstract. - Scholarship in African economic history has been Nigeria, are the effects the introduction of a widely dominated by a wave of revisionism lately. The degree of circulating currency had on the preexisting credit African indebtedness, the imperatives of loan repayment, and the long-term implications of ongoing political and economic market; the impact of the monetization of economy changes, all make such a revision exigent indeed. Focusing on on the society, particularly on the development of the Yoruba of southwestern Nigeria, this paper produces new social classes; and the process of capital formation evidence to reinterpret and redefine African precolonial finan- and accumulation through indigenous banking and cial institutions. The paper has two main parts. Part 1 focuses credit institutions. on the introduction of cowrie currency into Yorubaland and its impact on social stratification. Part 2 examines ajo, the savings For the records, the Yoruba people, on whom institution, esusu, the rotating savings and credit associations this study focuses, have been the subject of interest (roscas), and the process of capital formation and accumula- for many Africanists partly because of the level of tion among the Yoruba. [Nigeria, Yoruba, rotating savings and their civilization which they had produced outside credit associations (roscas), capital formation, accumulation, cowries; social stratification] Hamito-Semitic and Arab-Islamic influence. They inhabit southwestern Nigeria, in present-day La- A. G. Adebayo, Ph.D., Associate Prof, of History at Kennesaw gos, Ogun, Oyo, Osun, Ondo, and Kwara states; State College, Marietta, Georgia. He was formerly Visiting and, as a result of European partition, they could Prof, at the York University, Toronto, Canada, and Senior also be found in the neighbouring Republics of Lecturer at the Obafemi Awolowo University, Ile-Ife, Nige- ria. - Publicatons include: Embattled Federalism: A History Benin and Togo in West Africa. According to of Revenue Allocation in Nigeria (1993); he has contributed Samuel Johnson (1921: xix), this area lies, roughly several chapters to books and has published numerous articles speaking, between lat. 6° and 9° North, and long. in learned journals; cf. also References Cited. 2° 30' and 6° 30' East. Neither ethnically nor po- litically homogeneous, the people had been, from time immemorial, organized into many states or kingdoms. The total number of these kingdoms is Introduction unknown, but the major states include the Yagba, Ekiti, Igbomina, Ijesa,- Ife, and Ondo in the east; After the pioneering works of the late Marion the Oyo, Egba, Owu, Egbado, and Ijebu in the Johnson (1968, 1970) and of other economic histo- center; and the Sabe, Ketu, Anago, Idaisa, Manigri, rians of Africa,1 there seems at first sight to be very Isa, and Ana in the west. The ruling elites in most little to add to the existing knowledge of the im- of the states claim descent from the Oduduwa portation, distribution, and use of cowrie currency house and/or Ile-Ife. Each state was independent in West Africa. It has been demonstrated beyond and autonomous and had a monarchical system all doubts that, to use Johnson's very apt words, of government. They, however, shared common "West African cowrie currencies . [were] in no bonds of artistic and material culture, political sense a 'primitive' money, but a sophisticated form and commercial ethics, and mutually intelligible of currency capable of adaptation to the particular language. needs of West African trade" (1970: 17). In addi- Several features of Yoruba social and political tion, other scholars have shown the east-west and systems supported the financial institutions. In an north-south spread of the currency, and have spec- earlier publication, I have itemized these features ulated on its diffusion from one part of the region to another. Nevertheless, there are certain issues that have not yet been adequately covered. Three 1 Among others, see Lovejoy 1974; Latham 1971; Hopkins such issues, which the present study seeks to ex- 1966; Hiskett 1966; Jones 1958; Baier 1980: 25-35, 105- amine by focusing on the Yoruba of southwestern 115; Herbert 1973. This content downloaded from 130.218.12.44 on Mon, 11 Feb 2019 17:37:10 UTC All use subject to https://about.jstor.org/terms 380 A. G. Adebayo as follows: further "a supported centralised by the similarity in the cowrie political and administra- tive system numismatics in of the Edo eachand Yoruba (M. Johnson kingdom, where major policy decisions were 1970: 41; Zaslavsky 1983:taken 125f.). According to by the oba (king) in coun- cil, and which, S. A. Akintoye: "The earliest with contacts of the Ekiti, a few exceptions, positively affected the Ijesa and Akoko conductwith Benin were commercial. It of economic programmes; a stratified is generallysociety believed that these earliest which, contacts nevertheless, celebrated and rewarded dated back to the fifteenthsuccess century. Benin traders and hard work, particularly success in broughtfarming, corals, European cloth, cowrie shells andtrade and industry; an urban- ized social European life iron implements which and, at a later date, encouraged industrial pro- duction and guns and powder,promoted and took away home-spun cloth division of labour; a deep religious life, and camwood as wellcharacterised as beads and potash. by the worshipping of the Supreme Akure was the Godentrepôt of this Benin (Olodumare) trade and a through a pantheon of highly feared considerable number of Edo peopleand soon settled respected gods and goddesses; and, closely permanently associatedat Akure" (1971: 25f.). with this, a well ordered society with The above clearlylaws indicates that thebelieved eastern to be binding on every member irrespective routes for the spread of cowries to Yorubaland of his/her position, and with punishment were as important believed as the southern route through to be handed down directly by the gods Ijebu country. Onfor the other hand, cowriesevery were misdemeanor" (Adebayo 1992: 164). known Before to have been imported to the Westerntheir Su- collapse and restructuring in the 19th dan centuriescentury, before the Portuguese set out on theirthese features of the social and political systems voyages, and before European traders worked began im- effectively to promote and protect porting theminvestments (cowries) to the Atlantic west coast. and played a crucial role in the development They were known to be the currency in theof Niger financial institutions. Bend countries and to have come there through the North African caravan trade of which the Oyo 1. Money Empireand was a part. Thus, Social a northern route is al- Stratification in Yorubaland so suggested. Indeed, earlier concerns to date the beginning of cowrie shells as a currency among a) Yoruba Cowrie Currency the Yoruba have led to the suggestion that they were probably introduced about (but not later than) Unlike many West African peoples, the Yoruba did the fifteenth century (Oroge 1985: 75). Yorubaland not use metallic currency such as gold and silver combined the practices of stringing cowries (as coins before colonial rule.2 The main trade curren- was done in the Bights of Benin and Biafra) and cy was cowrie shells, cypraea moneta, imported of counting them individually (more prevalent in from the Indian Ocean. The available evidence the western Sudan), which shows the diversity of indicates that cowries came through two major monetary policies as well as sources of the cowrie routes: the northern route connecting Yorubaland shells. with the caravan trade, and the southern route by The participation of Yoruba traders in the At- way of the Atlantic coast. It is not clear from which lantic trade probably reduced the volume of cowrie of these routes cowries first came to the Yoruba importation by way of the northern (i.e., trans-Sa- country. The Portuguese were said to have found haran) route from the 17th century onwards. It has cowries in extensive use in Benin at the begin- been demonstrated how the slave trade increased ning of the 16th century (M. Johnson 1970: 18). the size of cowrie importation to West Africa; it Given the close historical and trade relationship has also been shown that several Yoruba states, in- between Benin on the one hand, and Ile-Ife and cluding Ijebu, Egba, Egbado, and Old Oyo empire, other parts of eastern Yorubaland on the other took part in the slave trade (although there is still hand, the diffusion of cowries from the former to some controversy over the level of dependence of the latter can be reasonably assumed, a speculation the political economy on this trade) (Law 1977). Trade relations between the Ijebu and the Portu- guese had been established as soon as the latter 2 In the case of southwestern Nigeria, colonial rule came reached the Bight of Benin (Law 1973: 9-11). early with the conquest of Lagos in 1851, and British Although this trade was initially in other com- coins were in use along the coastal cities particularly by the returnees, traders, and missionaries. Despite this, coins modities, slaves subsequently predominated.