Money and Banking

In this chapter we shall examine the history of money in East Africa. First of all we need to understand the nature or the characteristics of money. Money is a universal medium which expresses the value of goods and commodities in the community. Money is universal in the sense that all goods can be valued through the same medium. Thus today we can say that so-and-so is worth so many shillings, thereby not only expressing the value which we place on so-and-so but also expressing its exchange value. Money is thus also an expression of the value for which we will exchange one good for another. Clearly therefore, money simplifies exchange as it provides a universal system against which all goods can be valued. Today in East Africa all goods are valued in terms of shillings so that the value of any one good can be compared with that of any other.