When Kenya, Uganda and Tanzania established their own national currencies in 1966, they initially gave them exactly the same value as the former East African shilling.
However, over the following three decades, their currencies followed increasingly different paths.
By the 1990s, the Ugandan and Tanzanian shillings had depreciated dramatically against the US dollar, while the Kenyan shilling lost its value much more gradually.
The divergence reflected differences in economic approaches.
Before 1966, Kenya, Uganda and Tanzania shared the East African shilling. The currency was administered through the East African Currency Board, which maintained a common monetary system for the three territories.
In 1966, each country introduced its own national currency – the Kenyan shilling, Ugandan shilling and Tanzanian shilling.
Initially, all three were valued at approximately US$0.14, equivalent to about US$1 for 7.14 shillings. Consequently, the introduction of separate currencies did not immediately produce any difference in their international value.
During much of the late 1960s and early 1970s, the three currencies continued to have broadly similar official exchange rates. However, this apparent stability concealed growing differences in their economies and the policies adopted by their governments.
Tanzania’s economic direction changed substantially following Julius Nyerere’s Arusha Declaration of 1967, which promoted socialism and self-reliance. The government expanded public ownership and directed investment towards state-led development.
There were also the war between Uganda and Tanzania in 1978–79.
Tanzania maintained an official rate of approximately TSh7.14 per US dollar for several years, even as unofficial exchange rates indicated a substantially weaker shilling. During the 1980s, the government progressively devalued the currency and eventually moved towards a more market-oriented exchange-rate system.
By 1985, the official exchange rate had reached approximately TSh16.49 per US dollar, rising to about TSh195 in 1990. These changes reflected both accumulated economic pressures and the gradual adjustment of the official rate towards market conditions.
Uganda experienced an especially severe currency crisis during the 1970s and early 1980s. Under Idi Amin, from 1971 to 1979, the economy suffered from political instability, the expulsion of much of the country’s Asian business community and declining production.
Although the government maintained an official exchange rate, the shilling’s real value was much lower.
Following Amin’s overthrow, further political instability and economic disruption compounded the problems.
In 1981, Uganda sharply devalued its currency, moving away from the previous official parity.
The scale of the change was extraordinary. During 1992–96, the average exchange rate was approximately USh1,065 per US dollar.
Kenya also experienced currency depreciation, but its exchange-rate trajectory was comparatively gradual during the period.
The Kenyan government maintained a more continuous market-oriented economic system than Tanzania.
The shilling depreciated from approximately KSh7.14 per US dollar in the early 1970s to KSh22.91 in 1990.
By the early 1990s there was considerable divergence in the currencies’ nominal values.
The economic disruptions of the 1970s and 1980s, together with contrasting approaches to reform and currency management, gradually transformed three initially equivalent currencies into markedly different ones.
On October 1, 2026 the exchange rates were as follows – KSh 129.75, TSh 2,648 and USh 3,948 per US$1.
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