The West African Currency Board (WACB)
The West African Currency Board (WACB) was founded in November, 1912 following the recommendations of Lord Emmitts Committee which was appointed by then Colonial Secretary, Mr. Lewis Harcourt to look into the currency situations of British West Africa in 1910.
The WACB committee was set up by the colonial administration to solve two basic needs:
1. Financing the exports trade of the expatriate firms operating in English Speaking West African Countries.
2. Improving through standardization the unsatisfactory and misleading currency system in West Africa. The Board was vested with the following functions;
- Issuing of West African Currency;
- Exchange of existing currency with the board’s currency;
- To sell abroad (repatriate) existing currency;
- Investment of its reserves. In the execution of these functions the board activities were characterised by:
- Fixed parity of the local currency with sterling.
- Automatic issues and futl coverage with amount that is able to be obtained from exports.
Advantages of the West African Currency Board (WACB)
- For the first time West African Countries were provided with a readily acceptable currency in World Market is unified system that commanded confidence. This was assured through the sterling link, which made it possible to convert the West African currency notes into other currencies.
- It preserves at all times a stable value of the West African Currency in terms of sterling.
- The reserves accumulated in London where invested land interest payments were repatriated to the countries concerned.
- It provided necessary network for the easy transfer of the West Africa Currency to the British currency.
- It ensured easy transfer facilities between the West African Countries.
Disadvantages of the West African Currency Board (WACB)
- The Board’s currency lacks fiduciary issue because it depended on British sterling.
- The amount of money supplied fluctuated with receiptable and payments of the board in starling. This made monetary management difficult.
- It lacked the ability and power to control and supervise the financial institutions that were existing in West Africa.
- It did not train West Africans in the art of monetary management and it did not encourage the development of indigenous financial institutions.
- The board did not attempt to foster the development of local investments instead it focused its attention on the development of London money and capital market.
- It did not provide a national currency such as an independent country might expect to have.
- Since it served four countries, it could not and did not take into consideration the peculiar conditions of anyone of them, but engaged in a common exchange of currencies exercise.