Industrialisation and the British Colonial State

West Africa 1939-1951

Lawrence Butler

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136307928
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

Taking colonial policy towards West Africa as a case study, Butler shows that, during the 1940s, the Colonial Office evolved a policy of encouraging colonial industry as part of a broad programme of development intended to prepare colonies for independence.

1 Towards ‘Development’: Colonial Economic Policy Before the Second World War

The 1930s mark the terminal phase in the era of 'classical' colonial rule, sandwiched between a relatively prosperous period of 'consolidation' and the Second World War, which saw unprecedented attempts by Britain to mobilise colonial economic resources and the first serious efforts to shape future colonial policy. Wartime policy discussions were influenced by metropolitan officials' pre-war experiences. The 1930s betrayed unease among administrators that Britain's presence in Africa and elsewhere had not fulfilled the promises of Imperial rhetoric. Deepening self-doubt produced two strands of official thought. The first was a concern to ameliorate the colonial poverty revealed by the Depression. The second was the question of correcting the structural weaknesses of colonial economies, and their vulnerability to fluctuating demand for their exports. An examination of the framework of colonial economic policy in this period reveals that, for several reasons, there was little prospect of colonial economic diversification, helped by the growth of indigenous manufacturing sectors. These reasons included entrenched metropolitan views on the relationship between the British and colonial economies, and British government aversion to potentially competitive manufacturing within the Empire. Superimposed on these were the indifference of expatriate capital to colonial industrial opportunities and a generally unwelcoming attitude from colonial governments. Against this unpromising background, the Colonial Office struggled to clarify its own thinking, less from a belief that industrialisation offered a solution to colonial economic problems than because a workable policy was required in the face of developments on the periphery. The attempt was stillborn, since the rest of Whitehall was unwilling to relinquish control over the colonial economies. While, by 1939, the Colonial Office had secured metropolitan funding of welfare provision in the colonies, little progress had been made in devising policies to promote their economic development.

Metropolitan attitudes to the colonies

Between the wars, metropolitan policy-makers and interest groups assumed a complementary relationship between the British and colonial economies. This, they claimed, brought mutual advantages: from the sale of their exports, colonial producers could buy manufactures, and so improve their living standards; this, in turn, created markets for metropolitan industry. Moreover, to the extent that colonial economic development was discussed, this was generally in terms of improved production of commodity exports, implying a consolidation of the existing division of labour between the world's primary producing and manufacturing regions — a pattern described in Hopkins's celebrated description of the 'open economy' model of colonial dependence.¹

Although this economic complementarity remained a central argument for Imperial apologists, the colonial relationship was unequal. Whereas individual colonies might depend substantially on British markets, Britain depended very little on any one colony or group of colonies, and her trade with the colonial empire never matched that with the Dominions and the developed world. Thus, in 1924, Britain's colonial trade represented only 6.8 per cent of her total exports, although this figure rose to 10 per cent by 1931. Nevertheless, a small but persistent group of metropolitan politicians, most prominently Leopold Amery, urged the development of colonial resources, much as Joseph Chamberlain had advocated.

Underlying this interest was the belief that, although undeveloped, the colonies offered enormous economic potential as markets and sources of raw materials for British industry. Moreover, unlike the economic policies of the Dominions, which, between the wars, deviated increasingly from metropolitan requirements, colonial development seemed controllable from Britain and could be managed to promote British interests.² Such ideas were reinforced after 1918 as Britain's relative economic decline became obvious. The colonial economies, seen as relatively recent initiates to world trade, seemed likely to remain at simple levels of production for many years to come.³ This unsophisticated conspectus offered little scope for serious consideration of diversifying colonial production.

Between the wars, colonial economic activity continued to concentrate almost exclusively on primary production, and very little diversification into manufacturing occurred. In British West Africa, economic development was characterised by the growth of a narrow range of mainly agricultural exports. For Nigeria, the second largest trading unit in Africa, palm products were especially important, forming the basis of the territory's integration into world trade in the nineteenth century. Palm production was a mainstay of the prosperous 1920s, sometimes amounting to half of Nigeria's total exports. However, the First World War prompted some diversification into groundnuts and cocoa production. By 1937, palm products constituted 37 per cent of Nigeria's exports, with groundnuts totalling nearly 20 per cent and cocoa over 10 per cent. This shift in economic activity demonstrates the dynamism still possible within the colonial economy and the responsiveness of peasant producers to new opportunities, discounting metropolitan prejudices about the supposed economic lethargy of the African.⁴ The Gold Coast economy, too, depended heavily on export-orientated peasant production. Here, cocoa was dominant, production having expanded quickly under colonial rule, representing three-quarters of the territory's exports by the 1920s. By the 1930s, nearly half the world's cocoa came from the Gold Coast.⁵

Although West Africa's export trade broadened, little manufacturing capacity developed before the Second World War. In the Gold Coast, for example, a Swiss-owned brewery was established in 1932, but there was no local soap or cigarette production. In Nigeria, by 1939, there was a cigarette factory at Ibadan, cotton ginneries, saw mills, two palm-oil bulking plants, a metal drum plant and a soap works at Lagos (the latter operated by the West African Soap Company, a Unilever subsidiary, using local palm-oil). Thus the region's modest manufacturing sector was concerned largely with processing local produce, and was limited both geographically and in range.⁶

The impact of the Depression

Such narrow economic bases made the colonies, like all primary producing economies, particularly susceptible to recession after 1929. On average, raw material prices fell 50 per cent more than the prices of manufactures. The colonial economies were ravaged by the collapse of commodity prices. For example, the price paid to Nigeria s palm-oil producers dropped by almost 80 per cent between 1928 and 1934, and the total value of Nigerian exports fell from £16,927,000 in 1928 to £8,560,000 in 1933.⁷ For the primary producing economies, the Depression involved a deterioration in both the barter and income terms of trade, curtailing their purchasing power. As real incomes fell, producers exported more to maintain levels of import consumption, reflected in Africa's growing share of world trade. A circular problem arose, because when the purchasing power of the primary producing economies fell, so did their ability to buy manufactured imports, bringing depression to the industrial world. In turn, the industrial world's need for African primary produce slumped, compounding the difficulties originally caused by low commodity prices.⁸ The Gold Coast paid heavily for its reliance on cocoa, whose price was more than halved between 1929 and 1930. The territory's revenue was derived mainly from export duties on cocoa, from the railways which transported it to the coastal towns and from duties on imports paid for with the income it brought to producers.⁹

Another victim of the Depression was colonial government revenues, drawn largely from customs and excise duties since direct taxation was still embryonic before 1939. Moreover, since much inter-war development was financed by government loans, especially in the brief `boom' after 1918, the Depression interrupted many development schemes, because declining revenues could no longer service these loans. The Depression therefore drew metropolitan attention to the problem of colonial indebtedness and to the heavy burden which debt charges involved for straitened government resources. Nigeria's problems were typical. By 1934, the territory was devoting almost one third of its gross revenue to debt charges. Declining revenues inevitably affected the quality of government services in the economic and social spheres, as colonial governments embarked on retrenchment.¹⁰

The review of ‘trusteeship’

The impact of the Depression undermined traditional metropolitan claims that colonial rule benefited the dependent Empire by stimulating economic growth through an expanded commodity export trade.¹¹ The 1930s saw a review, initially hesitant, but becoming more purposeful, of the structures of colonial rule. Most significant was the tension thus uncovered between the political and economic elements in British colonial policy. Insofar as British colonial rule between the wars had a philosophy, this was `trusteeship'.<sup>12</sup> Trusteeship implied a responsibility upon the colonial power to `protect' colonial subjects from the potentially adverse consequences of too rapid an encounter with Western civilisation. Specifically, it meant shielding colonial populations, especially in Africa, from disruption by European economic activity. Its classic statement was Lugard's The Dual Mandate in British Tropical Africa (1922), which embraced Joseph Chamberlain's widely shared view that the well-being of Europe and Africa were interdependent, but developed this to emphasise the importance of restricting European penetration in the interests of Africans.¹³

The nebulous character of trusteeship made it a convenient basis for a spectrum of opinions. Particularly receptive was the metropolitan lobby which equated `development' with exploitation, and which sought to `protect' colonial societies from the kind of dislocation and distress which industrialisation was perceived to have caused in Britain and Europe, This outlook was not confined to humanitarians, missionary groups, liberals and socialists who championed colonial interests within Britain. It permeated the Colonial Office, too. As far as West Africa was concerned, possibly the key expression of this paternalism was the sustained discouragement by the Colonial Office of European-owned plantation agriculture. It was also seen in the cool reactions of officials in London to the grandiose development schemes for the region proposed by the Empire Resources Development Committee during the First World War.¹⁴

For much of the inter-war period, then, conservation was the dominant ethos in the Colonial Office. The major practical manifestation of the trusteeship doctrine was the distinctive form of political control generally known as `indirect rule', essentially a means of governing through existing local elites, or, ...

Table of contents

• Cover
• Dedication
• Title
• Copyright
• Contents
• Abbreviations
• Acknowledgements
• Introduction
• 1 Towards 'Development': Colonial Economic Policy Before the Second World War
• 2 The Impact of War on Development Policy, 1939—42
• 3 Industrialisation in Colonial Office Reconstruction Thinking, 1943-46
• 4 Industrial Development: Defining the Colonial State's Role, 1943—46
• 5 The Metropolitan Crisis and Constraints Colonial Industrialisation, 1947—48
• 6 The Threads of Policy Resumed, 1949-51
• Conclusion
• Biographical Notes
• Bibliography
• Index