1 Escudo – Cape Verde

In 1977, the currency situation in Cape Verde was fundamentally defined by its recent independence from Portugal in 1975. The new nation inherited the Portuguese escudo as its official currency, operating within the escudo zone. This arrangement provided initial monetary stability and facilitated crucial trade with its former colonial power, which remained a primary economic partner. However, this system also symbolized a continued economic dependency, limiting the young government's autonomous control over its monetary policy and national financial sovereignty.

Economically, the country faced severe challenges that strained its currency framework. Cape Verde was grappling with the aftermath of a prolonged drought, widespread poverty, and a lack of natural resources, leading to heavy reliance on imports and foreign aid. The escudo's value and stability were therefore externally influenced, primarily by Portugal's economic conditions and the management of the Lisbon-based Banco de Portugal. This external dependency was a point of contention for a leadership seeking to build a distinct national identity and self-sufficient economy.

Consequently, 1977 was a period of transition and planning. The government, led by the African Party for the Independence of Cape Verde (PAICV), was actively laying the groundwork for a national currency as a cornerstone of economic independence. This process culminated in 1977 with the establishment of the Bank of Cape Verde (Banco de Cabo Verde), the nation's first central bank. While the Cape Verdean escudo would not be officially introduced until 1978, the foundational monetary institution created in 1977 was the critical first step in decoupling from the Portuguese escudo and asserting domestic control over the country's monetary affairs.