How Poverty & Monetary Sytems, Modern & Ancient, play out in Uganda

Ekkehard Doehring, Sabine Becker, Edna Byabalemi & Moren Katwiesigye
Ekkehard Doehring is Associate Editor of Nile Journal



From early 15th century or there about, pre coin monetary systems, in the form of cowry shells, precious metals and others, began circulating in the coastal areas of East Africa. These steadily spread inland to reach places as far removed from the coast as present day Uganda and much of eastern Congo. They slowly but not completely replaced the age old system of trade by barter.

From the late 19th century through to the early years of the 20th century, Indian rupees replaced cowry shells as a medium of trade. Indian traders had long traded with coastal East Africa, courtesy of the seasonal monsoon winds. With the beginning of imperial rule rupees were swiftly replaced by colonial coins and later colonial bank notes.


Uganda is 50 years into independence status and has been through a period of turbulence and transformation. It is the proud owner of its own currency and bank notes, issued from the central Bank in Kampala, which is the Bank of Uganda. The notes are pretty and tasteful, and range from the 1000 to the 50,000 shilling note.



Far from government and the major centers of trade and commerce, there exists in Uganda segments of the population that are not familiar with anything above the 2000 shilling note, which is still less than one dollar. A traveller producing 5000 shilling note (the equivalent of 2 dollars) to settle a monetary transaction is likely to find no takers. People will shy away because they have not seen so huge a bill before. This quite involuntary response is equal to a withdrawal from the modern monetary system. And it is an indication of the level and prevalence of poverty in some segments of rural Uganda.

The UN has defined poverty as an income of less than one US Dollar per day. Others say that anything less than 2 dollars a day is poverty. Even going by the more liberal UN definition, fully 30 percent of Uganda’s 30 plus million people can be regarded as poor people. The period between 1988 and 2007 saw a reduction in poverty level in the country by almost half, a remarkable achievement. Unfortunately it did not last and was followed by a downward spiral.

Nevertheless Uganda possess a functional modern money system, complete with a floating daily exchange rate, stock markets, and a large and diverse banking system plus other features of a modern economy. In parts of Kampala if shut your eyes from the potholed roads that brought you there you could almost imagine that you are in a European city.

At the same time, there is a marked and increasing imbalance in access to these modern facilities and commodities. The discrepancy between rich and poor in the country widens by the day and the level of misery deepens.  The unequal development between town and country has evoked a great deal of debate in the country as well as some degree of unease. Although six out of ten fastest growing economies are Sub-Saharan African, it has to be noted that this development primarily profits the rich while the poor are left wallowing in poverty at the periphery amidst a population demography that is escalating out of hand.

Overall, the present situation has forced a great number of rural people in Uganda to opt out of the modern cash economy and to gravitate towards olden day practice of trade by barter. You do for me I do for you. In its present mode the barter trade includes direct exchange of goods and the exchange of work value as virtual money forms. A certain social intimacy alien to the money economy creeps in.

Today a large part of central Congo has totally abandoned official currency, and has by ad hoc set up its own systems of value reference and in the process acquired a certain independence from the Center. Work unit such as helping someone seed a field at planting season, later on at harvest time may transform into a share of the fruits of the fields. Let us tell from our own experience about some present day adaptations of the old traditional African money forms, as practiced today by women groups in northern Uganda, to help out in their daily management in an economically marginalized life.

During Christmas break of 2012, we visited Boomu Women’s camp, near Murchison’s Conservation area. The mission of the camp is to help the women in the surrounding community manage their daily life, particularly during times of crisis. In the camp women learn traditional weaving skills. They learn horticulture, agro farming as well as traditional cuisine. And they put what they learn into practice. The camp provides the raw materials and whatever else is needed to facilitate these activities.

Cash money does not enter the game till towards the very end, when the products and produce are sold, and the women or the woman who has worked it is rewarded with the cash money minus of course the cost of the raw material. Every product bears the insignia of the woman that worked it along with the price tag. Everything is carried out in the open. There is a certain democracy here.

In addition the women at the camp provide service such as meals, tour guides to tourists, local and foreign, who visit the Murchison’s Game Park. From the surplus of touristic activities, support is given to the local school for school texts, and for meals at schools. The local health station is supported with medicaments.  Storytelling and culture activities are organized, in the framework of a heritage garden, which is the meeting place for the community and tourist alike.

Everything is done without cash flow. But in the end everyone is accorded the benefit from the work and the effort they have put in. Thus is the olden day African monetary system of barter trade mobilized to ameliorate the modern condition of acute rural poverty.