Colonial Economy in Africa, Farming and Mining Activities
The colonial economy was centered around isolated agricultural and mining centers in which foreign-financed and foreign-managed firms employed local labor to produce raw materials for export to Europe, North America, and Japan. Colonial administrations started most of the important large-scale farming and mining activities: for example, cotton growing in the irrigated Al Jazīrah (Gezira) region of Sudan, rubber growing on plantations in Liberia, coffee growing in Côte d’Ivoire, Ethiopia, and Kenya, and copper mining in Zambia.
For a variety of reasons, colonial economies did not focus on developing industry to produce finished goods for local consumption. First, markets for finished goods in Africa were small. Second, mineral and agricultural raw materials, for the most part, were not processed in Africa, or were only minimally processed to ease shipment to ports. Third, since African industrialization was largely initiated by European firms, it was not in the firms’ interest to create competition for their own products in Europe. Fourth, in the case of some countries, both the colonial and later African governments kept the exchange rates of their currencies too high, making imported consumer goods more affordable.
South Africa and Zimbabwe were two distinct exceptions to this general lack of industrialization. South Africa had been administered by settlers of European descent since the early 20th century. The size and technical skill level of the settler population—combined with relative autonomy from colonial powers—supported greater economic development, making it possible for industrialization to succeed. In the case of the colony of Rhodesia (what is now Zimbabwe), the white minority regime faced world sanctions for its illegal takeover of the government in 1965, and was forced to embark on homegrown industrial development to meet its own domestic needs. At independence in 1980, Zimbabwe had one of the most developed economies on the continent, second only to South Africa.
Colonial export-oriented industries did make some positive marks on the African economic landscape. They introduced important innovations in transportation, banking, marketing, trade, and many commercial services. They also led to improvements in government administration, agricultural practices, health care, and education. However, these innovations were not intended to modernize Africa as a whole. Instead, they were primarily concentrated in and around a small number of principal ports and trade centers, which usually also served as colonial capitals. This unbalanced system gave rise to tremendous disparities between developed urban centers and the rural sector.