A modern history of monetary and financial systems of Congo 1885-1995
This thesis addresses the modern history of money and finance in Congo from 1885 to 1995, against a background of pre-colonial traditional monetary practices observed since the 15th century and still in use today in some regions of the Congo basin within the current Democratic Republic of the Congo. The work makes use of historical research methods and is aimed, firstly, at interpreting the survival of the pre-colonial monetary tradition and its influence on the Congolese modern monetary and financial systems and, secondly, at explaining major monetary and financial developments that have occurred in Congo since 1885. First of all this study explores a series of devices that were used as money in the ancient Kingdom of Congo (13th-17th century). Two devices used as currency in the Kingdom of Congo - the nzimbu, a seashell as small as a coffee bean, and the lubongo, a small mat made of raffia fibre - are analysed. Mbongo, the common term for money or wealth in today's Congolese languages, derives from lubongo. The mitako, a brass rod of different lengths, which was granted the quality of legal tender by the authorities of the Congo Free State (1885-1908) in 1886, alongside the state currency, is explored in the process of introducing modern currencies in Congo. New light is shed on some controversial issues, such as the origin and genuine identity of the nzimbu. Also explained are the significance and limits of the monetary functions of devices used for these purposes in traditional communities accustomed to essentially barter-based mechanisms of exchange. Secondly the study addresses monetary and financial provisions set up for the Congo Free State, and analyses the six main strands of King Leopold IPs financial and development policy: (1) designation of non-occupied lands as State property; (2) setting up of a vast royal property as Crown land for the purpose of generating income for the King; (3) granting of concessions to various companies, in which the King took substantial shareholdings; (4) regime of labour-tax intended to ensure a sufficient workforce for both the State land and Crown land; (5) joint ventures with private businesses to carry out investments that required large amounts of capital; (6) placing trade activities under an absolute State monopoly. Thirdly, exploring the colonial period (1908-1960), the study demonstrates that depending on what was at stake, the Belgian colonial power addressed Congolese monetary and financial issues regardless of the legal separation established by the 1908 Charte Coloniale (Colonial Charter) between Belgium and its Colony as two distinct entities. Lastly the major political events that occurred in the Democratic Republic of the Congo from the start of the 1960s onwards resulted in a very high cost for the country in terms of waste of resources and inflation, among other adverse effects. The Congolese monetary and financial crises that started in 1960 were a consequence of irrelevant and inefficient policies combined with a lack of long-term vision in the management of public affairs. The monetary and financial developments of the early 1990s onwards were characterised by political imbroglio and hyperinflation that undermined people's trust in the national money. This study recommends further research on a number of issues, such as the use of foreign currencies in the economy that resulted from this mistrust, the development of street money markets and the coexistence of different monetary zones in the same country.