THE CURRENCY REVOLUTION IN SOUTHERN NIGERIA 1880-
1948

Between 1880 and 1948 the British Government replaced the pre-existing
currencies of Southern Nigeria with British currency. There is, as yet, no satisfactory
comprehensive explanation of the manner in which this important change was effected, and
of its impact on the Southern Nigerian economy and society. Much has, however been
written on the subject.1
Of these, the contributions of G.I. Jones and A. G. Hopkins are
easily the most valuable in the degree to which they help to explain the working of the pre-
existing currencies, or the manner in which such currencies were replaced. A. H. M. Kirk-
Greene's article is useful in the information it provides regarding the nature and distribution
of the major currencies in Nigerian history. His explanation of the manner of their
disappearance, like Marion Johnson's, is essentially unsatisfactory. Kirk-Greene suggests
that "the Nigerian cowrie died a natural death, brought about by a demand for a more
portable medium of exchange" and that "by 1923, they had entirely vanished from the main
centers of trade".2
Kirk-Greene accepted at face value the assertion by Assistant Resident
Kisch of Northern Nigeria in 1910 to the effect that British currency was already popular at
that time because cowries were cumbersome, 150 mean being required to carry £ 100 worth
of them.3
Marion Johnson, on the other hand, claimed that the demonetization of cowries
by legislation in 1904 was a superfluous exercise, "a classic case of closing the stable door
after the horse has gone".4
Her explanation for this was essentially that so many cowries
had been imported over the years that by the end of the Nineteenth Century, cowries had
seriously depreciated in value, and enormous difficlties were encountered in trans-porting
them about the country in any quantity.5
These explanations fail to take into account the
nature of the Nigerian economy in the pre-colonial setting, and the role of cowries and
other local currencies in that context, nor do they explain why cowries and other currencies
remained in strong local demand well into 1950 in some parts of Northern and Southern
Nigeria. The dangers of using the weight problem to explain the disappearance of the
traditional currencies from the Nigerian market may be illustrated by what happened to the
British currency with which they were replaced over the period under review. In 1944, the
Member for Banking in the Nigerian Legislative Council, the Hon. K.M. Oliver, drew
attention to the embarrassing fact that the British currency was not circulating in the
Nigerian market:
"it has been a great embarrassment to the Banks and the Currency Board that
currency is not circulating. We get large demands for small denominations particularly
from Calabar, but if the small money in this country would only circulate, there would be
ample. It is not circulating. The banks have received practically nothing back during the

1
See for instance: G.I. Jones, "Native and trade currencies in Southern Nigeria during the XVIII and XIX
Centuries", Africa, 1958, pp. 42-54; A.H.M. Kirk-Greene, "The Major Currencies in Nigerian History",
Journal of the Historical Soceity of Nigeria, Vol. 2, No. 1, Dec. 1960, pp. 132-150; A.G. Hopkins, "The
Currency Revolution in South-West Nigeria in the Late Nineteenth Century", J.H.S.N., Vol. 3, December
1966, and M. Johnson, "The Cowries Currencies of West Africa, Parts I and II", Journal of African History,
Vol. XI, Nos. 1 and 3, 1970.
2
A.H.M. Kirk-Greene, "The Major Currencies in Nigerian History", J.H. .N., 2,1, 1960, pp. 140-148.
3
Ibid., p. 148.
4
M. Johnson, "The Cowrie Currencies of West Africa, Part I", Journal of African History, Vol. XI, No. 1,
1970, p. 24.
5
1bid., pp. 28-33.

last few years. The banks pay it out but it does not come back; and where it is I do not
know...."6
He further indicated that the problem of transporting large quantities of money had
not been solved by the introduction of British currency. "In this country", he said,
"currency consists mainly of shillings and it is a very bulky business when dealing with
them in millions."7
These statements should demonstrate the kernel of the currency
problem in Nigeria. Traditionally, the local population stored their money in great hoards,
transporting them in any quantity only when needed for major purchases. Most wealthy
men were invariably polygynists and heads of very large households, and in the pre-
colonial setting, they had at their disposal the labour of their kinsmen and slaves as well.
The labour costs involved in transporting large quantities of money, be it manillas, brass
rods, cowries, or later, shillings, were therefore low or often non-existent (except in terms
of costs to the porters themselves) as far as the men of means were concerned. Further, it is
significant that when British currency finally gained local acceptance -- and this was a
gradual process involving about fifty years of continued local use of the pre-existing
currencies -- only the smallest denominations, shillings and pennies were readily taken, and
these were generally hoarded in the traditional manner, thus perpetuating the transport
problems earlier associated with the cowries and other currencies, and forcing the
Government to pry them loose from their hoarders through the standard methods of
increasing taxation.8
This paper is the result of a re-examination of available evidence on the currency
revolution in Southern Nigeria. To fully comprehend the nature and consequences of that
revolution, one may ask the following questions: (1) What are the fundamental differences
between the pre-colonial Nigerian currency system and the system the British Government
wished to impose on the Nigerian economy? (2) Why did the British Government want to
replace the pre-existing Nigerian currencies with British currency? and, (3) What costs did
Nigerians pay as a result of the change in currency (or more generally, what were the costs
and benefits of the new and old systems to British interests and Nigerians respectively)? To
answer the first question, it is useful to reiterate, following Paul Samuelson, the
fundamentals of money.9
It is not a physical thing in essence, but rather, a compendium of
functions broadly identified as follows: (a) a standard of value; (b) a medium of exchange;
(c) a store of value; (d) a unit of account and a standard of deferred payments. All these
functions are logically dependent upon the characteristic of liquidity, which is in turn af-
fected by durability, acceptability over a wide range of transactions, and ease of accounting.

6
Niqerian Legislative Council Debates, 22nd Session, March 14, 1944, Statement by the Member from
Banking (The Hon. K.M. Oliver, M.C.), pp. 151-152.
7
1bid., p. 152.
8
Niqerian Legislative Council Debates, 22nd Session, Statement by the Hon. Financial Secretary, March 16,
1944, p. 273; See also F.D. Lugard, The Dual Mandate in British Tropical Africa, (London: Frank Cass
Reprint, 1965), p. 264.
9
P.A. Samuelson, Economics, (New York: McGraw-Hill, 1976), p. 283; see also C.S. Belshaw, Traditional
Exchange and Modern Markets, (Englewood Cliffs, New Jersey; Prentice-Hall, 1965), pp. 9-10. See also A.G.
Hopkins, An Economic History of West Atrica, (New York, Columbia University Press, 1973), pp. 69-70.