Eritrea's Early Stages in Monetary and Banking Development

UNIMI Economics Working Paper No. 28.2003

31 Pages Posted: 15 Feb 2005

See all articles by Arnaldo Mauri

Arnaldo Mauri

Università Degli Studi di Milano

Date Written: October 2003


Eritrea is listed among those countries of Africa, whose independence has been lately achieved. Notwithstanding the monetary and banking history of Eritrea goes back to the Italian colonial settlement on the Red Sea shore of 19th century. The paper offers an overview of the early stages of the Colony's monetary development up to mid-thirties and of the problems met in the substitution of Italian currency for the traditional money. A branch of the Bank of Italy was established in Asmara in 1914 and this event marked the first introduction of banking into the country. The Asmara branch was followed by branch offices of the Italian central bank in the four main centres of the Colony. The Bank of Italy was involved also in commercial banking and fulfilled the functions of banker and fiscal agent for the colonial government as well. Furthermore it worked to promote the creation of local banks and the take-off of the Eritrean banking system. Due attention is given to attempts of the colonial government to develop a suitable agricultural credit system in Eritrea and to the critical issues involved.

Keywords: Eritrea, financial development, African banking

JEL Classification: E42, G21, N27

Suggested Citation

Mauri, Arnaldo, Eritrea's Early Stages in Monetary and Banking Development (October 2003). UNIMI Economics Working Paper No. 28.2003, Available at SSRN: or

Arnaldo Mauri (Contact Author)

Università Degli Studi di Milano ( email )

Milan, 20122

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