A brief history of Italian monetary colonialism in East Africa

Since the Italians occupied the port town of Massawa on the western shore of the Red Sea in 1885, they were obsessed by the need to replace the widely used Austrian Maria Theresa thaler (MTT) with a colonial currency they could control. The MTT was a silver coin issued by Empress Maria Theresa in 1741, which was extremely successful in the Arabian Peninsula and in the Horn of Africa, and continued to circulate in the region after it stopped being a legal tender in the Empire in 1780. Its value was free to float, without any regulation, until Benito Mussolini obtained the monopoly for the minting of the coin from Austria in 1935, and employed it to wage the fascist invasion of Ethiopia. Before that time, Italy tried to replace it two times without success. The first time with the tallero eritreo, a similarly looking silver coin bearing the effigy of the then King of Italy Umberto II, that was pegged to the Italian lira at a 1 to 5 rate. The fixed exchange rate soon became overvalued, and the coin did not spread beyond the borders of the Italian colony of Eritrea. This attempt came after an Additional Convention with Ethiopia was signed as an attachment to the Treaty of Wichale in 1889, with which Italy clumsily attempted to secure its protectorate on Ethiopia. The agreement envisaged that Italy would mint also the Emperor’s own version of the thaler, whose value had to be defined in accordance with the Italian government, and that it would circulate as legal tender also in the Italian colony. After Emperor Menelik II rescinded the agreement in 1893, he issued his own (equally unsuccessful) thaler with the technical assistance of France.

The second attempt came after the First World War, with the tallero d’Italia. This time, the image of the King of Italy was replaced by a personification of Italy, on the model of ancient roman coins: the engravings in Amharic and Arabic which were present on the tallero eritreo were also replaced by Latin ones. This coin was another failure, as the issued coins were not enough to supply the population of the colony, and they were not accepted beyond its borders, being essentially useless for the role that the old MTT had already played for half a century. Only during the war was the Italian government partially able to control the local monetary circulation by fixing an official exchange rate of the MTT, in a general situation of monetary shortage.

The colonial attempts to have a grip on the local monetary system were detrimental, especially for those who sacrificed the most for the colonial government, such as the indigenous soldiers serving in the Italian army, who were forced to exchange their wages earned in Italian lire in order to access the local markets, at unfavorable rates. Despite this, the Italians went ahead trying to control the local monetary system because, as one of the Italian administrators declared, a radical monetary reform represented “an act of true and final colonial conquest”.

The MTT was also circulating in the territories that later became part of Italian Somalia when the Italian government officially took control of Benadir, in 1905. There, the Italians gradually attempted to integrate the newly acquired territories in the broader Indian Ocean economy, first pegging the newly issued besa to the British pound, then minting an Italian rupee, having the same value as the Indian rupee in 1910. With the arrival of the fascist governor Cesare Maria De Vecchi, Somalia became the first East African country where the Italian lira was officially declared the sole legal tender in 1925. However, it was only after the occupation of Ethiopia, and the foundation of the Italian East Africa in 1936, that the Italian lira became the official currency of the Empire, even though it never managed to oust the MTT from the local monetary circulation.

In order to protect the domestic circulation of the lira, the Italians finally planned to decouple the colonial monetary circulation from the national one, as the British had done in West and East Africa with the establishment of currency boards. Special banknotes for the Italian East African Empire were issued in 1938 but never circulated because of the outbreak of the Second World War. The Italian defeat in the East African campaign definitely buried the project in 1941. But Italian monetary policies in Africa did not stop with the end of the war and the dissolution of the fascist empire. On 21 November 1949, U.N. resolution n. 289 approved the constitution of the Trust Territory of Somaliland under Italian administration, which lasted until 1960. The trusteeship came with the introduction of the somalo, issued by the Bank of Italy and managed by the Cassa per la Circolazione Monetaria della Somalia, a joint stock company whose functions were similar to those of the British currency boards. The somalo was intended to support the construction of the financial system of independent Somalia, but it was conceived as another political tool to secure and strengthen the country’s economic ties with Italy, and those who were meant to be its main users were not involved in its design.

Nowadays, no African currency is pegged to the euro because of the Italian colonial past; but the fact that the Italians did not manage to build their own colonial currency system does not mean they did not attempt to do so.

Italians, the good people?

Talking about Giorgia Meloni, @upholdreality responded to a skeptical Twitter user: “she’s an Italian nationalist, her agenda is Italy, not Africa. But if she actually aligns against the globalist imperialist order she is de facto pro-Africa.” There can hardly be a better expression than monetary colonialism to represent the history of the CFA Franc, despite the imprecise (when not partisan) attempts by major media outlets from the global north to debunk it. However, anticolonial activists on the African continent and elsewhere should be wary of the instrumental use of anticolonial rhetoric by politicians like Meloni. The forgetfulness of the Italian politicians when it comes to Italy’s colonial past fosters the myth of the “good Italian,” which is deployed to downsize Italian responsibilities in the face of the other European partners for the state of African economies.

As Ndongo Samba Sylla and Fanny Pigeaud warn in their tweet (the French version can be read on Fanny Pigeaud’s page), commenting on the “success” of Meloni’s interview, “the Far Right is not an ally. Their ‘popularity’ and their seemingly anti-imperialist stance are an unfortunate indicator of the tragic state of the European/Western Left.”

In the Italian political landscape, where a real Left struggles to stand out, Giorgia Meloni could indeed be the one pushing the European countries (including Italy) to acknowledge the role they played and continue to play in the unequal redistribution of global resources. Or, most likely, she will continue forgetting the Italian colonial past, as well as her more recent vocal criticism towards the colonialism of others, and indulge in neoliberal self-absolution.