“We Had to Feed the People”: The Italian Lira and the Political Economy of Currency in British Eritrea, 1941–1950

Following the occupation of Eritrea in 1941, British authorities in London promoted a currency policy aimed at replacing the Italian lira with a sterling-based currency basket. In May 1942, they opted for the enforcement of the East African shilling as the new legal tender. The lire, however, did not disappear overnight. Their circulation was tolerated—and, in some cases, even encouraged—by British authorities in Asmara, which exploited the small deal of autonomy they enjoyed from London to adapt the new monetary system to the needs of local governance. The case study is a useful lens to analyse the multiplicity of interests that shaped the political economy of currency of the United Kingdom in the former Italian colonial space. Currency and exchange rate regimes were technologies of rule that served different purposes, from cost maximisation to the management of the relationship with different categories of subjects. The trajectory of the lire also confirms that the introduction of colonial currencies in Africa did not bring to a sudden revolution of pre-existing monetary practices. The actual implementation of the new monetary legislation was the outcome of a subtle process of negotiation involving state and non-state actors in Europe and Africa as well.