Independence represented a critical juncture at which Africa’s founding leaders chose the political strategies that would set their countries on distinct trajectories of financial system development. The previous chapter suggested that these leaders were concerned with regulating the access to capital for fear that such resources could be turned against them. This chapter now nuances that claim by demonstrating that African leaders responded differently to the perceived threat of capital accumulation, depending on whether it would benefit their own constituents or those of rival politicians. I argue that a leader’s constituency type, exporter versus nonexporter, affected the severity of that perceived threat and thereby the extent to which leaders would seek to directly control commercial banking. Limiting the number of banks provided these leaders with a mechanism for institutionalizing executive discretion over the flow of capital.

My claim is that founding leaders who emerged from constituencies that directly profited from increased access to the financial sector were more likely to use inducements to bind business to their regimes. Their constituencies were composed of ethnic groups that grew cash crops for export; they could readily amass a bankable surplus that would enable them to enter other sectors of the economy. The leaders from these groups provided a form of constituency service by allowing the number of commercial banks to expand over time. The easy accumulation among such groups, however, posed a threat to leaders whose own coethnics did not produce cash crops and would therefore not immediately benefit from increased access to financial services. I maintain that founding leaders from nonexporting constituencies – whose economic activities focused on subsistence agriculture or the production of food crops for domestic consumption – responded to that threat by limiting entry into commercial banking. Fearing that resources accrued by protocapitalists from other groups could be used to mobilize opposition, these leaders were motivated to closely control banking and impose constraints on credit provision.