(Oxford Historical Monographs) Leigh A. Gardner - Taxing Colonial Africa - The Political Economy of British Imperialism-Oxford University Press (2012) PDF

TA X I N G C O L O N I A L A F R I C A
OX F O R D H I S TO R I C A L M O N O G R A P H S
Ed i t or s
p. cl avi n
l . g oldm an j. i nnes r. servi ce
p. a . sl ack b. wa rd- perki ns
j. l. wat ts
Taxing Colonial Africa
The Political Economy of British
Imperialism
LEIGH A. GARDNER
1
3
Great Clarendon Street, Oxford, OX2 6DP
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To my parents, for always believing in me
Preface
Empires have rarely been profitable for those governing them. ‘Imperial
overstretch’, as Paul Kennedy describes it in his The Rise and Fall of the
Great Powers, has been the downfall of expanding states for millennia. In
recent decades historians have attempted to quantify the costs and bene-
fits of the Empire to Britain, and have largely concluded that at best the
British government broke even (though private individuals often profited
handsomely along the way). A pioneering work in this literature is Davis
and Huttenback’s Mammon and the Pursuit of Empire: The Political Econ-
omy of British Imperialism, 1860–1912, which investigates, as the authors
put it, the ‘profitability of Empire’ for the British Treasury. This volume
draws its inspiration (and its subtitle) from Davis and Huttenback, but
rather than asking how much the Empire cost, investigates how Empire
was funded.
Its starting point is the policy of making colonies pay for their own
administration, which is often mentioned in imperial history but rarely
explored in depth. By the twentieth century, this policy was sufficiently
successful that most of the cost of governing the Empire was borne pri-
marily by colonial subjects rather than the British taxpayer. This eased the
burdens of the British Treasury, but led to the emergence of new and
often unpredictable political and economic dynamics in the colonial per-
iphery. Differences in initial endowments, and subsequent bargaining
and negotiation between stakeholders, produced unique fiscal systems in
each colony. How this affected the political and economic institutions
which emerged in the colonies and which former colonies inherited at
independence is the subject of this book.
A study of local dynamics within a vast empire must necessarily sacri-
fice breadth for depth. This book focuses particularly on two of Britain’s
colonies in sub-Saharan Africa. While certainly not the wealthiest nor the
most strategically important, the vast and at the time largely uncharted
territory acquired by the British Empire in Africa in the late nineteenth
century presented a singular challenge for an empire at the height of its
powers. The immediately exploitable resources of the region were few, but
the demands of administering such large colonies were great. Africa’s ex-
perience can therefore shed light on the lessons learned by Britain over
several centuries of imperial rule.
Like most academic endeavours, writing this book has produced more
questions than answers. The extent to which Africa’s experience mirrors
Preface vii
that of older colonies in Asia or the Americas is one of them. This book
provides a foundation for answering this as well as many other questions
about how the Empire worked and the legacy it left behind. My greatest
hope for it is that it will return the spotlight of imperial history to the
earnest bureaucrats who struggled to find ways of funding the most ambi-
tious extension of political and economic might in human history, duti-
fully keeping the account books on which this book is largely based. Their
efforts have long been neglected in favour of the more glamorous exploits
of traders, explorers, and missionaries. But they still have many more
stories to tell us about the hard realities of building and then dismantling
an empire.
This book would not have existed without the support, both personal
and professional, of a wide network of people and institutions. It began
its life as a doctoral dissertation at the University of Oxford. Revision into
its current format began while I was first lecturer in the Department of
Historical Studies at the University of Cape Town and then Researcher at
the British Museum. The manuscript was completed at the London
School of Economics and Political Science, where my colleagues in the
Department of Economic History have provided much encouragement
and guidance.
Too many individuals have contributed to this research at its various
stages to name them all, but I would particularly like to thank David
Anderson, who supervised the writing of the dissertation on which this
book is based and then patiently guided me through the process of turn-
ing a dissertation into a book. Gareth Austin and Avner Offer, who exam-
ined the dissertation, provided invaluable feedback in both their examiners’
report and during a highly enjoyable viva. Beyond reading parts of the
manuscript, Jane Humphries has been a supportive mentor throughout.
Deborah Oxley and David Meredith (and Chloe and Ted) deserve par-
ticular thanks for their helpful guidance and unfailingly generous hospi-
tality during subsequent trips to Oxford.
From beginning to end, this work benefited from the vibrant intellec-
tual exchanges of Oxford University’s economic history and African stud-
ies groups. Comments on seminar presentations and a range of informal
discussions have influenced the final product in ways I can no longer ar-
ticulate, but without which it would not have assumed the form that it
has.
viii Preface
Outside Oxford, a wide range of people have read and commented on

parts of this research at various stages, providing invaluable feedback.
Wm. Roger Louis and other participants in the National History Center
Seminar on Decolonization helped shape both the discussion on decolon-
ization and the message of the book as a whole. Of these, Jennifer Foray
has been particularly helpful during the process of revising the disserta-
tion. Participants in university seminars and workshops in Cambridge,
Cape Town, Copenhagen, Lusaka, Stellenbosch, and at the London
School of Economics have also provided valuable discussion and feed-
back. Any remaining errors and omissions are my own responsibility.
My greatest debt is to my parents, who in the writing of this book have
learned far more than they ever cared to about the public finances of
countries they haven’t (yet) visited. This book is dedicated to them.
Leigh A. Gardner
Acknowledgements
This research would not have been possible without the patient help of
archivists at the Kenya National Archives, the London Metropolitan
Archives, Rhodes House in Oxford, the UK National Archives, the US
National Archives and Records Administration, and the World Bank. I
would particularly like to thank the World Bank for permission to pub-
lish research based on its archival holdings, and Katie Eagleton for giving
me access to her research from the Uganda National Archives.
Equally, the archival research on which this book is based also depended
on financial support from the Beit Fund, Clarendon Fund, Economic
History Society, the Hicks Fund, the National History Centre, Jesus Col-
lege Oxford, and the Oxford Research Network on Governance in
Africa.
Parts of Chapters 2 and 7 appear in modified form in a paper entitled
‘Decentralization and Corruption in Historical Perspective: Evidence
from Tax Collection in British Colonial Africa’, published in Economic
History of Developing Regions, Volume 25:2. Parts of Chapters 6 and 8
were published in a chapter entitled ‘An Unstable Foundation: Taxation
and Development in Kenya, 1945–63’, in D. Branch, N. Cheeseman,
and L. A. Gardner (eds.), Our Turn to Eat: Politics in Kenya Since 1950
(Berlin, 2010).
Contents
List of Figures xi
List of Tables xii
List of Maps xiii
List of Abbreviations xiv
A Note on Sources xv
1. An Introduction to the Problem of Colonial Taxation 1
PA RT I B U I L D I N G A S E L F  S U F F I C I E N T
EMPIRE IN AFRICA, 18851913
2. Building Colonial States in Africa 17
3. Fiscal Foundations of the African Colonial State 31
PA RT I I C R I S I S M A N A G E M E N T I N
C O L O N I A L P U B L I C F I N A N C E , 1 91 4  1 9 3 8
4. From Complement to Conflict: Trade Taxes, 1914–1938 63
5. Collective Action and Direct Taxation, 1918–1938 92
6. The Failure of Africa’s ‘New Deal’? 126
PA RT I I I F RO M S E L F  S U F F I C I E N C Y
TO N AT I O N  B U I L D I N G
7. ‘Cash, Competence, and Consent’: Building Local
Governments 161
8. Fiscal Policy and Regional Integration, 1945–1963 192
9. Self-Sufficiency Policy and the Fiscal Consequences of
Decolonization 224
References 247
Index 267
List of Figures
1.1 Exports and public expenditure in African colonies, 1911 5

1.2 Revenue per capita in selected African colonies, 1925 6
1.3 Revenue by source for selected African colonies, 1925 7
3.1 Budget position of British colonies in Africa, 1901–10 33
3.2 Public expenditure in Kenya, 1901–10 36
3.3 Kenya hut and poll tax revenue 48
3.4 Northern Rhodesia hut and poll tax revenue 49
3.5 Non-native poll tax revenue in Kenya, 1912–18 52
3.6 Kenya hut and poll tax revenue by province, 1901–10 56
4.1 Export price of cocoa, 1910–37 70
4.2 Copper prices on the London Metal Exchange 72
4.3 Revenue in selected British colonies in Africa, 1918–37 75
4.4 Public spending in selected British colonies in Africa, 1918–37 76
4.5 Proportion of imports from Britain, 1925–37 88
5.1 Financial position of British colonies in Africa, 1924–33 93
5.2 Revenue by source in Kenya and Northern Rhodesia, 1924–38 94
5.3 Hut and poll tax revenue in Kenya, 1914–24 98
5.4 Northern Rhodesia income tax revenue, 1921–36 100
5.5 Percentage of direct tax revenue paid by non-Africans, 1929–37 108
5.6 Hut and poll tax revenue as a percentage of total, 1925–37 111
5.7 Kenya hut and poll tax convictions 114
5.8 Northern Rhodesia poll tax convictions 114
7.1 Index of local and central government revenue, 1925–38 174
7.2 Northern Rhodesia: per capita native authority revenue
by province, 1938 178
7.3 Kenya: per capita Local Native Council revenue by province, 1945 178
8.1 Northern Rhodesia revenue and expenditure, 1945–53 196
8.2 Kenya public expenditure, 1951–62 202
8.3 Northern Rhodesia revenue and expenditure, 1954–63 206
9.1 Defence expenditure in Kenya and Zambia, 1961–69 231
9.2 Kenya expenditure on social services, 1963–69 240
9.3 Zambia expenditure on social services, 1963–69 240
9.4 Total public expenditure, Kenya and Zambia, 1963–69 242
List of Tables
3.1 Allocation of central government expenditure 38
3.2 Northern Rhodesia customs and excise revenue, 1928–36 47
4.1 Average contribution of trade taxes, 1925–29 64
5.1 Primary sources of government revenue, 1918–24 96
6.2 Public expenditure in Northern Rhodesia, 1925–29 131
6.3 Allocation of public expenditure 132
6.5 Public expenditure in Northern Rhodesia, 1930–34 135
6.6 Government unemployment relief, 1932 138
6.7 Expenditure by the DARA, 1946–53 150
6.9 1940s expenditure compared with inter-war expenditure in Kenya 152
6.10 Northern Rhodesia development plan expenditure 154
6.11 Public expenditure in Northern Rhodesia 156
6.12 1940s expenditure compared with inter-war expenditure in
Northern Rhodesia 157
7.1 Local Native Council revenue 1925–38 173
7.2 Local Native Council expenditure, 1925–38 175
7.3 Northern Rhodesia Native Treasury revenue and expenditure, 1938 176
7.4 Kenya Local Native Council revenue, 1945 177
8.1 Sources of public revenue in Kenya 195
8.2 British government grants, 1954–60 203
List of Maps
3.1 Map of the Congo Basin region 44

5.1 Rates of tax by district in Kenya, 1935 117
5.2 Poll tax rates in Northern Rhodesia by district, 1935 119
List of Abbreviations
KNA Kenya National Archives
LMA London Metropolitan Archives
NARA US National Archives and Records Administration
NAZ National Archives of Zambia
TNA UK National Archives
WBGA World Bank Group Archives
A Note on Sources
Financial considerations pervaded every aspect of British colonial rule in
Africa, at every level from Whitehall to the district boma in colonies. The
fiscal policies of the British Empire, particularly those affecting trade,
were also of global interest, and drew attention from both foreign govern-
ments and international organizations. This diversity is reflected in the
source material used in this volume, which has been drawn from a range
of archives and government publications.
Statistics on colonial public finance were reported to London on an
annual basis. Quantitative evidence is largely from either the Blue Books
submitted by each colony to the Colonial Office, or from the more detailed
Financial Reports prepared by colonial treasurers, both available in the
UK National Archives. Where deflation of quantitative evidence is called
for, I have used Charles Feinstein’s data for Britain during the pre-war
period, when colonies had not yet begun collecting such data themselves.
Much of colonial government revenue was spent in Britain, and colonial
currencies were tied to sterling. During World War Two inflation rose
rapidly in the colonies, and colonial governments began collecting their
own data on price indices. From 1945 onwards these data are used.
The statistical evidence in these volumes varies considerably in quality
and quantity. This variance is due to a number of factors, particularly
local administrative capacity, the priorities of colonial administrators and
the demands of the Colonial Office. Archival records from Rhodes House
in Oxford and the National Archives of Kenya, Zambia, and other former
colonies were used to clarify and enrich the quantitative evidence. These
records were generated partly, though not exclusively, by colonial treasur-
ies; records produced by a range of different colonial government depart-
ments at both central and district level were invaluable in understanding
the development of colonial fiscal policies and their implementation on
the ground.
A number of external observers were also interested in the financial
organization of the Empire. During the inter-war period, this interest
was driven particularly by a concern to maintain access to colonial trade.
Records from the US National Archives helped illuminate these con-
cerns. Later, as colonies moved towards independence, the implications
for development aid and outstanding colonial debt concerned both for-
eign governments and the international financial institutions established
after World War Two. As a holder of colonial government debt initially
xvi A Note on Sources
guaranteed by the British government, the International Bank for

Reconstruction and Development was a keen observer of independence
negotiations, and records from the World Bank archives provided a valu-
able third perspective.
Complementing these sources is a rich secondary literature on the eco-
nomic history of the British Empire and the history of colonialism in
Africa. Particularly helpful for this research have been studies of individ-
ual colonies and the rich literature on colonial development policy. This
literature often mentions fiscal issues such as taxation or persistent resource
constraints, but rarely explores them in depth. The colonial development
literature focuses largely on the policies and fiscal imperatives underlying
British commitments to colonial development, but pays limited attention
to local resources. Some individual country studies explore taxation in
particular in greater depth, but their focus on individual colonies pre-
cludes examination of colonial taxation as part of a wider colonial fiscal
system.
1
An Introduction to the Problem of
Colonial Taxation
Taxation was one of the most contentious and difficult aspects of colonial
rule in Africa. Concerns about balancing the budget shaped public policy
at every level, from colonial capitals to district administrations operating
in isolated rural settings, and questions of how best to use local revenue to
pay for colonial governance figured prominently in contemporary debates
regarding the structure of colonial administrations. In many colonies, col-
lecting taxes occupied a large proportion of the time and energy of colo-
nial administrators and strained relations with those they governed,
threatening to undermine the fragile order maintained by colonial states.
In all colonies, the experience and impact of colonialism depended above
all on how colonial states raised and spent public funds.
Today, fiscal history provides a powerful tool for the historian of Africa,
for three reasons. The first is that it is difficult to understand any colonial
policy implemented from the beginning of the colonial period through
decolonization without considering the resource constraints of the colo-
nial state. In every area of colonial administration, the impact of a pro-
posed policy on the colony’s budget was the first concern of administrators.
Anxieties over budget deficits determined how and where the limited
resources available to colonial administrations were spent. Studies of the
structure and function of colonial administrations are missing an import-
ant variable if they neglect to examine the fiscal systems which largely
dictated what colonial administrators could and could not do.
The second reason is that colonial tax policies both reflected and shaped
the economies of individual colonies. What colonial administrators could
tax often depended on the existing resources of the colony. Both taxation
and public expenditure were also used to encourage some industries, often
at the expense of others, with the aim of generating the rapid economic
expansion that would allow colonies to pay for their own administration
as quickly after the beginning of colonial rule as possible. In most col-
onies, this meant using a variety of tax incentives and public investments
to encourage increased production of a few key primary exports, an economic
2 Taxing Colonial Africa
structure characteristic of many African countries today. Colonial fiscal

systems therefore helped shape the economies that Africa inherited at
independence.
The third reason for putting fiscal issues at the centre of any history of
the British Empire is their capacity to answer long-standing questions
about the purpose and impacts of British imperialism in Africa. Did Brit-
ain colonize Africa in anticipation of financial or economic gain, for stra-
tegic purposes, or as part of a broader ‘civilizing mission’? Attempts to
account for the costs and benefits of the British Empire to Britain have
almost universally concluded the Empire was never a source of great
bounty for the British Treasury.1 What then was the Empire’s purpose?
Rudolph Goldscheid, a German scholar known today as the father of
fiscal sociology, wrote in 1917 that ‘the budget is the skeleton of the state,
stripped of all misleading ideologies’.2 The financial structure of the British
Empire, and where Britain’s African colonies fit within it, can provide a range
of insights into what the imperial government and colonial administrators
were trying to accomplish in Africa, how their goals changed over time, and
the extent to which they achieved them. Through such analysis, Africa’s
fiscal history can add empirical substance to a growing literature attempt-
ing to identify the long-term economic and political effects of
colonialism.
Using archival records from both Britain and the former colonies, this
volume provides a comparative study of the political economy of British
imperialism in Africa from the beginning of colonial rule in the late nine-
teenth century through independence in the 1960s. It focuses particularly
on the comparison of two colonies, Kenya and Northern Rhodesia, which
were neither the poorest colonies nor the richest and exemplified many of
the financial struggles faced by other British colonies in Africa. These
colonies will be compared with others to reveal a previously unseen pic-
ture of the fiscal history of British rule in sub-Saharan Africa.
The key message of this book is that the most important factor shaping
the experience and impacts of colonialism in Africa was the resources
available to the colonial state. Individual colonies varied widely in the
amount and type of revenue they could raise, whether from the taxation
of a few large corporations, taxes on trade, or poll taxes collected from a
1
See, for example, Davis and Huttenback, Mammon and the Pursuit of Empire; Edel-
stein, Overseas Investment; Hopkins, ‘Accounting for the British Empire’; O’Brien, ‘The
Costs and Benefits of British Imperialism’; Porter, ‘The Balance Sheet of Empire, 1850–
1914’. For the post-World War Two period, see Feinstein, ‘The End of Empire and the
Golden Age’.
2
Quoted in Schumpeter, ‘The Crisis of the Tax State’, p. 6. Originally published in
Goldscheid, Staatssozialismus oder Staatskapitalismus.
The Problem of Colonial Taxation 3
broad section of the population. The structure and efficiency of these

revenue sources in turn affected the pattern of colonial spending, whether
on defence, administration, infrastructure projects, or education. Such
spending had long-term consequences for economic and political devel-
opment in the former colonies.
T H E R E V E N U E I M P E R AT I V E
By the time Britain declared formal control over the Cape Colony in
South Africa in 1815, it had ruled an empire for more than two centur-
ies.3 From its origins in the Americas in the seventeenth century, the
Empire expanded into ever more distant and often largely unknown parts
of the world. After the ‘Scramble for Africa’ in the late nineteenth cen-
tury, this included expansive territories in the interior of sub-Saharan
Africa which often had yet to be explored by the countries pledging to
govern them. By the end of the Scramble the British Empire covered a
quarter of the globe and 43 million people had been added to the popula-
tion under British control.4
Governing an empire was costly, and as its boundaries expanded Brit-
ish bureaucrats began to encourage their counterparts in colonial capitals
to find ways of paying their local expenses without help from the British
Treasury. From the British government’s perspective, requiring colonies to
pay their own way was an effective means of limiting its own spending on
the Empire. By the early twentieth century, the bulk of imperial expendi-
ture was funded by revenue raised in the colonies rather than in the
metropole. This was a relief for politicians in Britain, where imperial
spending was becoming increasingly controversial amidst rapidly increas-
ing demands for public spending from a variety of other quarters. The
expansion of the franchise, for example, had led to rising domestic
demand for public expenditure from the nineteenth century onwards. At
the same time, Britain’s industrial growth had slackened, leaving it with
fewer resources to meet these multiplying demands.5
The adoption of a policy of colonial self-sufficiency in itself says much
about the British government’s goals in colonizing Africa. On the one
3
For an overview of the history of the British Empire, see Levine, The British Empire or
Louis (gen. ed.), History of the British Empire. For a concise review of African history in the
nineteenth and twentieth centuries, see Reid, A History of Modern Africa.
4
Louis, ‘The Colonial Empires’, p. 35.
5
Cain and Hopkins, British Imperialism, pp. 385–6. For increased spending in the
developed world, see Lindert, Growing Public, p. 39; and Tanzi and Schuknecht, Public
Spending, Introduction.
hand, the retention of local revenues for local purposes largely ruled out
the expropriation of funds from the colonies to the metropolitan treasury.
On the other hand, the limited willingness of the British government to
subsidize relatively under-resourced colonial administrations supports the
view that the British government did not actively seek to develop its col-
onies. Rather, the British government’s policy of colonial self-sufficiency
and the way it operated strongly suggests that Britain’s purpose in Africa
was to maintain order at the lowest possible cost to the British Treasury.6
This apparently limited ambition reflected deep and abiding disagree-
ments over the value of the Empire to Britain. Proponents of imperial
expansion may have succeeded in painting red ever larger portions of the
world map, but they did not manage to convince the British Treasury, in
particular, that such imperial acquisitions warranted a high priority in the
allocation of Britain’s own resources.
In the colonies themselves, the need to collect sufficient revenue to pay
for local administration was one of the greatest challenges of colonial rule,
particularly in Africa. While there was substantial variance in the level of
economic development between colonies, most African colonies did not
have a sufficient surplus to support the highly bureaucratized European
governments on which colonial administrations were loosely modelled.
Pre-colonial political institutions were largely acephalous, owing to the
difficulty of raising revenue in a context of land abundance and popula-
tion scarcity.7 More centralized indigenous institutions tended to emerge
in regions of relative resource abundance, where more bureaucratized
states could be supported.
No reliable national income data exist for Africa during this period,
but trade data provide some indication of the size of colonial economies
relative to the expense of colonial administrations.8 J. A. Hobson, a prom-
inent opponent of British imperial expansion in Africa, claimed that the
economic opportunities offered by the tropical colonies would never
equal the costs of governing them. ‘At whatever figure we estimate the
profits in this trade, it forms an utterly insignificant part of our national
6
This is also the conclusion reached in Frankema, ‘Colonial Taxation and Government
Spending’.
7
For an overview of the factor endowments perspective on pre-colonial political institu-
tions, see Austin, ‘Resources, Techniques, and Strategies’.
8
Attempts to calculate national income for African countries before 1945 are in their
infancy. Maddison’s annual data on global GDP only include African countries after 1950.
A recent working paper on comparative historical national accounts places the construc-
tion of historical GDP figures for Africa on the research agenda for the future. See Smits,
Woltjer, and Ma, ‘A Dataset on Comparative Historical National Accounts’. Ongoing research
by Morten Jerven promises to deliver national accounts for African countries from the late
nineteenth century onwards. See Jerven, ‘Comparing Colonial and Postcolonial Output’
for preliminary figures on Ghana.
income, while the expenses connected directly and indirectly with the
organization, administration and defence of these possessions must swal-
low an immeasurably larger sum.’9 Comparing spending in African col-
onies with their total exports reveals that Hobson’s estimate was not far
off. As Figure 1.1 shows, public expenditure in British Africa often
exceeded total exports in the early twentieth century. Only in export
powerhouses like the Gold Coast or Zanzibar, or geographically tiny
colonies with limited spending demands like the Gambia, did exports
keep pace with expenditures. At the beginning of the colonial period,
few colonies in Africa were, from a purely financial perspective, worth
the cost of governing them.
The scope and nature of the export industries in each colony deter-
mined how much revenue colonial governments could collect and from
whom they could collect it. Colonies in Africa differed widely in the rev-
enue collected per capita (see Figure 1.2), and in the largest source of that
revenue (Figure 1.3).
Colonies with large export trades, for example, relied primarily on
taxing imports and exports to fill their coffers. Such taxes had the advan-
tages of being relatively easy to assess and collect. They were generally
charged as a percentage of the value of imports and exports, and collected
at a few trading centres in each colony.
£1,000,000
£900,000
£800,000
£700,000
£600,000
£500,000
£400,000
£300,000 Expenditure
Exports
£200,000
£100,000
£0
ny e
m sia
nz ia
ho t
ra d
ho nd
Ke on
R as
ar
er an
Za des
ya a
ol bia
G a
So de
N ala
N nd
Le
S. Co
ib
Si alil
am
ga
d
.R
U
Fig. 1.1. Exports and public expenditure in African colonies, 1911

Source: Board of Trade, Statistical Abstract, 1909–23.
9
Hobson, Imperialism, p. 39.
£2.50
£2.00
£1.50
£1.00
£0.50
£0.00
e
a
ka
nd
st
ia
on
ny
nd
si
si
bi
oa
er
yi
la
de
de
am
Le
Ke
ga
ig
an
sa
C
ho
ho
N
G
U
ng
ra
ya
ol
.R
er
Ta
S.
G
N
Si
Fig. 1.2. Revenue per capita in selected African colonies, 1925

Source: Board of Trade, Statistical Abstract 1924–33; Tanganyika, Blue Book 1925.
Unfortunately, the revenue from such taxes depended on commodity

prices remaining stable. During the turbulent inter-war period, sudden
declines in commodity prices were calamitous for the financial position of
many colonies. During the Great Depression falling world trade again led
to financial trouble for colonial governments. Colonies like the Gold
Coast and Nigeria, which had enjoyed large budget surpluses in earlier
years, suddenly found themselves with deficits of £245,000 and £1.3 mil-
lion respectively. Newly opened copper mines in Northern Rhodesia al-
lowed its government to earn surpluses during the first years of the
Depression, but sudden decline in copper prices led Northern Rhodesia’s
revenue to fall from a high of £977,015 in 1931 to £808,087 in 1933, a
decline of 17 per cent.
With limited access to loans, colonies relied on reserves built during
good years to maintain their expenditure during bad years. Building and
maintaining a reserve was high on every colony’s list of fiscal priorities,
and even in wealthier colonies the need to build reserves reduced spend-
ing on other areas. Reserves were invested in Britain or other regions of
the British Empire. During periods of crisis, when the degree or duration
of the downturn was unknown, protecting the reserve became important
and many colonies made drastic cuts in expenditure when revenue fell.
Northern Rhodesia cut its already minimal spending by nearly 10 per cent
Nigeria
Gambia Import
Sierra Leone Export

Gold Coast
Tax
S.Rhodesia
N.Rhodesia Fees/Fines
Nyasaland Infrastructure
Uganda
Land/Royalties
Tanganyika
Other
Kenya
£0 £4,000 £8,000
Thousands
Fig. 1.3. Revenue by source for selected African colonies, 1925

Source: Gambia, Blue Book 1925; Gold Coast, Blue Book 1925; Kenya, Financial Report 1925; Nigeria,
Treasurer’s Report 1926–27; Northern Rhodesia, Blue Book 1925; Nyasaland, Blue Book 1925; Sierra
Leone, Blue Book 1925; Southern Rhodesia, Report of the Auditor General 1925; Tanganyika, Blue Book
1925; Uganda, Blue Book 1925.
during the copper price collapse mentioned above. The size of colonial
governments decreased to a bare minimum, and all but essential services
related to maintaining order were cut.
Another aspect of relying on revenue from trade taxes is that it limited
the ability of colonial governments to use trade taxes as an instrument of
commercial policy. Protective tariffs, widely used by countries outside
Africa during the inter-war period to insulate local industries from the
turbulent global market, involved an unacceptable sacrifice of revenue.
Colonial governments were anxious to develop local industries to reduce
their dependence on international markets, but had limited room for
manoeuvre due to their fiscal position. Tariff protection was used spar-
ingly, where it was used at all, and the colonial governments that used
protective tariffs were forced to make up for the revenue shortfall from
other sources.
They also needed to find ways of supporting local industries which
did not require revenue sacrifices. The marketing boards which emerged
in British colonies across Africa during the inter-war period were ostens-
ibly intended to shield primary producers from rapid changes in export
prices through the establishment of monopoly buyers which would pay
fixed prices for produce and absorb the risk of shifting international
prices. In reality, however, marketing board prices were often fixed at rates
sufficiently low that boards could reap profits which could be absorbed by
the colonial state or used to subsidize favoured groups like European
settlers.10
Further revenue was raised through the infrastructure investments
made by colonial administrations, particularly railways. However, such
revenue was equally susceptible to changes in the market for the colony’s
exports. The railways also absorbed a significant percentage of public
expenditure. Despite this, infrastructure projects were believed to have
considerable revenue potential, primarily in their potential to facilitate
export production. Infrastructure was therefore a high priority in colo-
nial expenditure throughout the colonial period.
Beyond trade taxes, most colonial governments levied direct taxes on
both Africans and migrants from Europe and Asia. Taxes on Africans
consisted of poll taxes or flat-rate taxes on African dwellings, known as
hut or house taxes. Europeans and Asians also paid poll taxes and, in
some colonies, income taxes. The contribution of these taxes to colonial
budgets varied widely. In Southern Rhodesia, for example, direct tax
was the largest single contributor to public revenue in 1925, represent-
ing 37 per cent of the total. Just under half this revenue, or 46 per cent,
was from African poll tax while the rest was raised through income taxes
levied on foreign settlers and corporations. Other settler colonies raised
less revenue from the European population and relied more heavily on
African hut and poll tax, as did non-settler colonies in East Africa. Just
over 30 per cent of Uganda’s revenue came from hut and poll tax. In
contrast, West African colonies raised substantial amounts from export
tax and direct tax was a much less important source of revenue. Though
heavily featured in the historical literature on colonial taxation, Nigeria
raised just 10 per cent of its revenue through the direct taxation of
Africans.11
The extent to which revenues were obtained from direct taxation had
important consequences for the institutional development of the col-
onies. Collecting direct taxes changed the relationship of colonial officers
to those they governed. It occupied a large proportion of their time and
attention, often to the exclusion of other administrative duties. Tax
revolts, or more often the threat of tax revolts, revealed the limits of the
legitimacy and authority of colonial administrations, and highlighted the
fragility of the imperial order. In settler colonies the relative contributions
10
Mosley, Settler Economies, pp. 46–63.
11
Historians’ focus on Nigeria is largely due to the fact that some of the most compre-
hensive statements on the imperial mind of colonial taxation, namely Lord Lugard’s discus-
sions of taxation, focus on Nigeria. See e.g. Lugard, Memorandum on the Taxation of Natives,
or Revision of Instructions to Political Officers. See Figure 1.3 for sources of revenue data.
of Africans and European settlers to total tax revenue became an increas-

ingly contentious issue in local colonial politics. The emergence of ‘tax-
payer welfare associations’ in several colonies during the inter-war period
was due to grievances over the collection of tax and allocation of expendi-
ture. These organizations were among the first examples of collective
political activism in the African community, and often became the pre-
cursor to nationalist movements after World War Two.12 Taxation had
political as well as economic ramifications.
R E S O U RC E C O N S T R A I N T S A N D
COLONIAL POLICY
One of the more contentious aspects of taxation was the allocation of the
funds collected. Protesting taxpayers often objected less to paying tax
than to what they received as a result. What did colonial administrations
provide in return for the taxes they collected? Colonial expenditure was
the other side of the coin from colonial taxation. Its priorities were dic-
tated not primarily by London or pressure from local political groups, but
by the amount and type of revenue available to colonial states.
As the figures above show, colonial administrations in different col-
onies varied widely in the resources available to them. Resource con-
straints shaped colonial governments and their policies in a number of
ways. Perhaps the most important effect was limiting their size. The sala-
ries of colonial administrators were set in London, not in the colonies
themselves, and were exceedingly high relative to local incomes. One
implication of this was that the costs of administration represented a
disproportionately high percentage of total expenditure.13 The high cost
of hiring additional European administrators forced most colonial gov-
ernments to cooperate with African elites in governing their respective
territories. The British Empire’s much-discussed policy of ‘indirect rule’
emerged as a matter of practical necessity in the early years of colonial
rule, when the European establishment which could be supported by
local revenue was skeletal at best.14
There was also considerable regional variation within colonies in the close-
ness of colonial administrations. The ‘thin white line’ was also not evenly
distributed.15 Within colonies, regions believed by colonial administrators to
12
For an example of a taxpayers’ welfare association, see Lonsdale, ‘Political Associ-
ations in Western Kenya’.
13
Frankema, ‘Colonial Taxation and Government Spending’, p. 143.
14
Perham, ‘A Re-Statement of Indirect Rule’, p. 321.
15
The phrase was coined in Kirk-Greene, ‘The Thin White Line’.
be more productive were governed more intensively, and the experience of

colonial rule for those within such areas was distinctly different from those
in more remote areas.16 Benton characterizes imperial control as ‘defined by
sets of narrow corridors and clusters of enclaves’, rather than undiminished
sovereignty distributed evenly over a given territory.17 This was reflected by
colonial budgets. Tax burdens fell more heavily on some regions than others,
and public investment was targeted to benefit regions that colonial adminis-
trators believed would produce increased revenue with improved transport
or other infrastructure.
The high cost of administration also influenced public spending. Col-
onies that struggled to make their budgets balance were particularly wary
of public investments that would commit them to future spending. This
included building schools and hospitals, which would need to be main-
tained and staffed in future years. Recent research by Bowden and Mosley
suggests that under-investment in social services like education and
healthcare has had long-term consequences for poverty rates in some col-
onies.18 The reluctance of colonial officials to invest in social services for
the African majority was largely driven by fiscal concerns.
Fiscal issues therefore played a central role in the design and implemen-
tation of not only those colonial policies related to taxing and spending,
but also policies which determined what infrastructure to build and
where, which industries should receive government favour, and who
should be educated and receive healthcare. The potential impact on
present and future budgets was a primary consideration in all policy deci-
sions made by the colonial state, and therefore a dominant influence in
shaping African experiences of colonial rule.19
THE LEGACIES OF BRITISH IMPERIALISM
Interest in British colonial Africa has enjoyed a resurgence in recent dec-

ades as scholars have attempted to identify the reasons for Africa’s appar-
ently persistent poverty.20 A number of authors have blamed colonialism
for economic underperformance in many African countries, and argue
16
Frankema, ‘Raising Revenue in the British Empire’, pp. 463–64. Hopkins, Economic
History, pp. 178–9.
17
Benton, A Search for Sovereignty, p. 37.
18
Bowden and Mosley, ‘Politics, Public Expenditure and the Evolution of Poverty’.
19
Gardner, ‘Unstable Foundation’.
20
Ongoing research on wages and living standards during the colonial period suggests
that the popular perception of African poverty as a constant feature of its economic history
requires revision. See, for example, Moradi, ‘Towards an Objective Account of Nutrition
and Health in Colonial Kenya’. See Fenske, ‘The Causal History of Africa’, for an extensive
review of the literature on the impact of colonialism.
that local differences in colonial rule can explain differences in economic

outcomes. One contribution claims that better institutions emerged in
colonies with large European populations, which explains why the
former Dominions have been more stable and successful since the end of
Empire than the former tropical colonies.21 Others argue that the iden-
tity of the colonizer mattered for the later development prospects of
former colonies, with British colonies faring better than their French
counterparts.22
While raising important questions, much of this literature relies on
cross-country regressions to test the influence of particular aspects of co-
lonial rule on economic performance in a much later period. This method
makes identifying causal mechanisms for the lasting influence of colonial
institutions difficult. Broad cross-country comparisons make in-depth
analysis of institutional development from the colonial period through
decolonization impossible. Cooper argues that such studies are guilty of
‘leapfrogging’ or ‘claiming that something at time A caused something in
time C without considering time B, which lies in between’.23 In Africa,
‘time B’, or the period between independence and the present, is nearly as
long as the colonial period itself. The question of how colonial institu-
tions continue to influence African development after a half-century of
institutional reforms, both internally and externally motivated, has yet to
be answered.
Colonial budgets can help answer this question. As noted above,
policies in individual colonies were often dictated to a large extent by
the resources at their disposal, which affected among other things the
physical and human capital possessed by the colonies at independ-
ence.24 The fiscal institutions built by colonial states were inherited by
the former colonies at independence. Research on tax collection by
colonial states indicates that tax burdens were relatively low and taxes
easy to evade.25 The weakness of these institutions largely explains the
fiscal crises suffered by many former colonies in the decades following
independence.
21
Acemoglu, Johnson, and Robinson, ‘Colonial Origins of Comparative Development’.
22
Bertocchi and Canova, ‘Did Colonization Matter for Growth?’; Grier, ‘Colonial
Legacies and Economic Growth’.
23
Cooper, Colonialism in Question, pp. 17–22. A similar critique is also made in Austin,
‘The “Reversal of Fortune” Thesis’, and Hopkins, ‘The New Economic History of Africa’,
pp. 168–70.
24
For the long-term impacts of different levels of investment in education, see Bowden
and Mosely, ‘Politics, Public Expenditure and the Evolution of Poverty’, and Grier, ‘Colo-
nial Legacies and Economic Growth’.
25
Frankema, ‘Raising Revenue in the British Empire’; Gardner, ‘Decentralization and
Corruption in Historical Perspective’.
OUTLINE OF THE BOOK
The first section of the book examines the fiscal challenges presented by
the nineteenth-century Scramble for Africa and how colonial administra-
tions sought to address them. It focuses particularly on how colonial gov-
ernments chose the most appropriate revenue sources for the local
circumstances they discovered in the colonies, and prioritized the dis-
bursement of scarce resources. Though colonial administrations often
borrowed tried and tested fiscal tools from European history or other
colonies, the first few years of colonial rule saw the emergence of consid-
erable diversity in colonial fiscal systems.
The next section examines how colonial fiscal systems, once established,
coped with the economic and fiscal crises of the first half of the twentieth
century. The two world wars and the Great Depression threatened to
undermine the tenuous fiscal stability established in African colonies in
the first two decades of colonial rule. Most colonial economies relied on
the export market for a very short list of primary commodities. The export
price of these commodities determined both the incomes of producers
and merchants, and the revenue collected by the state. The trade disrup-
tions resulting from the world wars, and the commodity price volatility
which characterized the period between them, wreaked havoc on colonial
treasuries and shaped the ways in which they responded to the personal
hardships of their constituents during this tumultuous period.
The third and final section explores the transition of African countries
from colonies to independent states. It examines the efforts made by the
imperial government to prepare poorer colonies for the financial demands
of statehood. Colonial governments delegated responsibilities to local
government in an effort to reduce demands on the central government.
Regional integration encouraged by the British government in East and
Central Africa, resulting in the creation of the Central African Federation
and the proposed establishment of an East African Federation, was largely
intended to create larger, more fiscally stable states.
Unfortunately, these efforts were not enough to prepare African states for
independent governance. The final chapter of the book examines the extent
to which the colonial fiscal institutions inherited by African governments
failed to cope with the demands of democracy. As in Europe, the expansion
of the franchise at independence led to increased demands for public spend-
ing, particularly on the types of social programmes neglected by the colo-
nial state. The inability of the fiscal systems inherited by the new states to
adapt to these demands had significant implications for the development of
post-independence political institutions.
This book illustrates how the financial structure of the British Empire
affected the experiences and legacies of colonial rule in Africa. It focuses
particularly on the extent to which attempts to make British colonial rule
in Africa pay for itself shaped the local political and economic institutions
inherited by the former colonies at independence. In short, this volume is
an effort to allow the budgets of local colonial administrations—in Gold-
scheid’s words, the ‘skeletons’ of the colonial state—to tell a new story of
British imperial rule in Africa.
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PA RT I
BUILDING
A SELF SUFFICIENT EMPIRE
I N A F R I C A , 1 8 8 5  1913
2
Building Colonial States in Africa
At its peak, the British Empire represented perhaps the most ambitious
expansion of political authority in human history. It possessed, in the
words of the St James Gazette, ‘one continent, a hundred peninsulas, five
hundred promontories, a thousand lakes, two thousand rivers, ten thou-
sand islands’. Its population ‘constituted the greatest aggregate ever owing
allegiance to a single crown’.1 How to establish effective administration
over this enormous (and in some regions largely unknown) territory con-
centrated the minds of colonial officials in both London and the colonies.
Central to their concerns was the financial burden such a task imposed.
In all periods of history, states and rulers have pursued economic or
political advantage through territorial expansion, only to discover that the
costs of acquiring new territory often exceeded the benefits. In the six-
teenth century, Machiavelli wrote sceptically of the prospects of acquiring
new territory, warning readers of The Prince that the ruler of a conquered
territory will find enemies both in those whom he has injured in the pro-
cess of invasion as well as those who helped him to obtain his new hold-
ing, as he will inevitably fail to meet the expectations they have for his
rule and their ability to benefit from it.2
The fiscal realities of empire-building have shaped the world we live in
today, determining the size of states and placing limits on the extent to
which expansion is worthwhile or even possible.3 According to Herodotus
it was resource constraints which stopped Xerxes, king of Persia, from
conquering Greece.4 Persson notes with regard to the Roman Empire that
the limits of empire-building ‘were set by the mounting costs of policing
frontier areas as well as the falling revenues from populations at a lower
level of income’.5 Though the British imperialists of the nineteenth and
1
Adams, Edwardian Heritage, p. 18.
2
Machiavelli, The Prince, pp. 29–35.
3
Alesina and Spolaore, The Size of Nations.
4
Herodotus, The Histories, Book VII, chs. 21–22.
5
Persson, An Economic History of Europe, pp. 15–18.
18 Building a Self-Sufficient Empire in Africa
twentieth centuries had a greater technological advantage, they faced the

same constraints as their Roman counterparts.
The Scramble for Africa in the late nineteenth century was the last
major step in a progressive expansion of British political authority which
had begun in the sixteenth century.6 From the beginning, financial im-
peratives influenced the size and structure of the Empire. The political
institutions of colonial rule were designed above all to maintain order at
the lowest cost, which influenced both the experience of colonial govern-
ance as well as its institutional legacy in the former colonies.
Who was to govern British territory overseas was the first decision
made with cost in mind. To allay the concerns of British parliamentarians
that the Empire would become a drain on the British Treasury, the imper-
ial government tried to delegate the costs and financial risks of imperial
expansion whenever possible. The first delegates were chartered compan-
ies, which assumed responsibility for governing and protecting imperial
territories in exchange for what they hoped would be lucrative rights to
colonial trade or resources. When this strategy failed, British administra-
tors were tasked with raising sufficient revenue locally to pay for the local
costs of colonial governance, including the salaries of colonial officials and
the construction of public works.
Funding colonial governance had been a challenge in all regions of the
Empire, but it was a particularly difficult one in Africa. With the excep-
tion of West Africa, few of the territories acquired during the Scramble
possessed at the time of conquest substantial export trades or other re-
sources which would help pay for colonial governance. The economies of
most African colonies were dominated by subsistence agriculture, with
endowments of land and labour which had not historically favoured the
emergence of centralized political institutions. Though significant pre-
colonial trades (both local and long-distance) existed in Africa, high
transport costs, low population densities, and low per capita incomes lim-
ited their scale.7 This feature of African imperialism distinguished it from
imperialism in Asia, for example, where the British flag followed British
commerce, rather than the other way around. Frankel notes that ‘while
the hope for economic benefits was a potent factor in the Scramble for
Africa, the means to be adopted in realizing these hopes were not known’.
Speculation on future profits, rather than existing ones, drove colonial
expansion in Africa.8
6
For a history of the Scramble, see Oliver and Sanderson, eds., The Cambridge History
of Africa, Vol. 6.
7
Hopkins, Economic History of West Africa, pp. 53–77.
8
Frankel, Capital Investment in Africa, p. 1.
Building Colonial States in Africa 19
This chapter outlines the challenges faced by British administrators in

the early years of colonial rule in Africa, placing the struggle to make ends
meet in the broader context of the Empire’s financial history. Early colo-
nial policies were fluid, adjusting to circumstances on the ground. In this
formative period, the decisions of the ‘man on the spot’ had a decisive
influence on the nascent colonial institutions taking shape at the turn of
the century. Under constant pressure from a reluctant British Treasury,
one of his primary concerns was achieving fiscal self-sufficiency and find-
ing the best way under local circumstances to raise revenue and reduce
expenditure. The decisions made by these early administrators helped so-
lidify differences in the economic and political institutions of each colony,
which remain crucial to furthering our understanding of colonialism and
its impacts.9
O U T S O U RC I N G I M P E R I A L RU L E :
T H E C H A RT E R E D C O M PA N I E S
In the early years of imperial exploration and expansion, the main costs of
empire-building were often outsourced to private individuals or compan-
ies, who were willing to risk their own capital in the hopes of profiting
from monopoly rights to colonial trade granted by the monarch. Britain’s
early imperial expansion into North America began with letters patent
granted by Henry VII to John Cabot and his three sons ‘for the discovery
of new and unknown lands’. Cabot was authorized to act as the King’s
representative in these newly discovered lands, in exchange for restricting
trade from their territorial possessions to Britain and paying to the king
one fifth of the capital gains of each voyage. Cabot would bear the cost of
exploration but enjoy an exemption from English customs.10
This method of imperial expansion was used through the seventeenth
and eighteenth centuries, when companies like the Hudson’s Bay Trading
Company and the British East India Company were responsible for the
early establishment of British rule in North America and India, respect-
ively. Other European empires used similar methods. The Cape Colony,
for example, was established as a territory of the Dutch East India Com-
pany in 1652.11
For such companies, the establishment of administrative control was a
means to an end, rather than an end in itself. The aim of company direc-
9
Hopkins, Economic History of West Africa, p. 170.
10
Charter quoted in Rabushka, Taxation in Colonial America, pp. 25–7.
11
Feinstein, An Economic History of South Africa, pp. 22–7.
tors was to capture as much of the international trade generated through

imperial expansion for Britain as possible. Under the mercantilist eco-
nomic thought which prevailed at the time, gains from international trade
were thought to arise solely from exporting, which made international
trade ‘equivalent to a zero-sum game’. The goal of mercantilist policies
was therefore to ‘ensure that these gains accrued to one’s own country’.12
However, their efforts to protect trade routes invariably drew them into
the administration of the interior, as agents demanded infrastructure, pol-
icing, and other services normally provided by governments. In response
to such requests, chartered companies across the Empire found them-
selves acting as much like governments as corporations, imposing local
taxes, maintaining military and police forces, and issuing currency.13 Un-
fortunately, the efforts of many such companies to balance their dual roles
as profit-making enterprises and public administrators failed, and most
went bankrupt when the expense of governing outweighed the profits of
trading.
The British East India Company is a classic example of such a failure.
After enjoying early success in building Britain’s trade with India, Cain
and Hopkins argue that the East India Company ran into commercial
trouble when the collapse of the Mughal Empire and conflicts with France
required military expenditure. To cover this, the Company accumulated
increasing amounts of debt and turned its attention more and more to-
wards collecting local revenue.14 By 1858, the Company was in decline
and the Crown had assumed formal rule of India.15 This pattern of char-
tered company failure followed by the establishment of British govern-
ment rule was to be repeated in Britain’s new African colonies.
C H A RT E R E D C O M PA N I E S A N D
THE SCRAMBLE FOR AFRICA
The Berlin Act of 1885 officially allocated the territory of the interior to
rival imperial powers on the condition that they establish effective admin-
istration over them.16 This represented a remarkable change in policy to-
12
Irwin, ‘Mercantilism as Strategic Trade Policy’, pp. 1296–7.
13
There are many examples of chartered companies acting as public administrations.
For the military actions of the East India Company, see Cain and Hopkins, British Imper-
ialism, pp. 93–4. For a depiction of Hudson’s Bay Company trading tokens, see Carlos and
Nicholas, ‘Chartered Trading Companies’, p. 410.
14
Cain and Hopkins, British Imperialism, pp. 93–4; Lawson, East India Company, pp.
22–7.
15
Lawson, East India Company, ch. 8.
16
Gann, History of Northern Rhodesia, pp. 53–4.
wards Africa, which, as Pedler notes, ‘was but a continent of outposts’ for
the average Victorian businessman.17 Historians have filled many pages
trying to explain why the European powers suddenly became interested in
acquiring sovereignty over the African interior. However, Cain and Hop-
kins note that the sheer volume of existing historical research on this
subject ‘has had the perplexing result of making it easier to say what is
wrong with current interpretations than what is right’.18
The Scramble heightened the need to find a cheap method of exercis-
ing political authority over distant territories. Not only were metropolitan
states required under the terms of the Berlin Act to establish formal
administration, they also faced demands from economic actors in the
colonies, often their own constituents. Trading companies already operat-
ing in Africa, particularly in West Africa, were also pressing for more ef-
fective British control over the region. Like their predecessors in India
and North America, they argued that the export trade, which remained a
minuscule proportion of Britain’s overseas trade, could only expand with
the better provision of security and infrastructure.19 In 1885, for example,
the West African section of the London Chamber of Commerce passed a
series of resolutions demanding the closer administration of the interior
of West Africa, including an ‘adequate police force’ and a system of ‘regu-
lar communication’, both requiring additional personnel.20
As it had in the past, the British government continued to delegate
administrative responsibilities to trading companies in the nineteenth
and early twentieth centuries.21 Chartered company rule in Africa was a
compromise between the need to establish effective administration under
the terms of the Berlin Act and the reluctance on the part of British
administrators to commit British resources to the expansion of Empire
into the African interior. In the words of one historian, the delegation of
imperial authority to such private agents was still considered to be the
best way of developing new spheres of British influence ‘at no expense to
the British taxpayer’.22
The first such compromise was the charter granted to the Royal Niger
Company in 1886. The Company was issued a charter authorizing it to
administer justice, enforce treaty rights, and collect customs duties to pay
17
Pedler, ‘British Planning and Private Enterprise’, p. 95.
18
Cain and Hopkins, British Imperialism, p. 303.
19
Hargreaves, West Africa Partitioned, Volume I, pp. 1–2. For more on the contribution
of the colonies to British overseas trade, see O’Brien, ‘Colonies in a Globalizing Economy
1815–1948’.
20
London Chamber of Commerce West African Trade Section Minute Book, LMA
CLC/B/150/MS16504.
21
Young, African Colonial State, pp. 103–5.
22
Galbraith, Crown and Charter, p. 107.
for the costs of governance. Unlike earlier chartered companies, the Royal
Niger Company was not given any monopoly over trading rights in the
territory.23 The demise of mercantilism from the mid-nineteenth century
meant that chartered companies were no longer granted exclusive rights
to colonial trade in exchange for governing the colonies, nor were they
required to restrict the trade of the colonies to British ports.24
A similar strategy was used to establish British rule over East Africa just
two years later. Inland Uganda was seen as strategically important, as the
home of the headwaters of the Nile, but the territory between Uganda
and the Coast which would later become Kenya appeared to have limited
economic prospects. In 1888 it was agreed that a chartered company
under the leadership of Sir William Mackinnon, known as the Imperial
British East Africa Company (IBEAC), would establish the first British
administration in the East African interior. Known for disorganization
and mismanagement, the company went bankrupt after just seven years
and ceded its authority to the Foreign Office.25 In its negotiations with
the Foreign Office, the Company argued that it was owed compensation
from the British government for its efforts in support of ‘national interests
in East Africa’. The territories acquired by the company in what would
become Kenya and Uganda ‘could not have been acquired by the State at
less outlay than that incurred by the Company’.26
A third charter was granted to Cecil Rhodes’ British South Africa (BSA)
Company in 1889, a year after Mackinnon had received his charter. It
authorized the BSA Company to negotiate treaties with chiefs to acquire
rights to the Rhodesias. It explicitly committed the BSA Company to
providing administration, requiring it ‘to undertake and carry on the gov-
ernment or administration of any territories districts or places in Africa,
and therefore and therein to make laws and ordinances, and to impose
and levy taxes, and raise revenue, and to establish and maintain a force of
police’.27
There was little British commerce with inland Rhodesia prior to 1889,
transport costs restricting trade to very high value goods like ivory or
cattle.28 Exclusive rights to Rhodesian trade were therefore not of particu-
lar interest to Rhodes. Rather, it was rights to land, and more importantly
the minerals it held, that attracted Rhodes and his backers, who specu-
23
Pedler, ‘British Planning and Private Enterprise’, p. 97.
24
Findlay and O’Rourke, Power and Plenty, pp. 395–402.
25
Mungeam, British Rule in Kenya, pp. 7–19.
26
Imperial British East Africa Company to Foreign Office, 23 November 1894, in Brit-
ish Parliamentary Papers, East Africa General (Africa 67).
27
Fox, Memorandum, p. 2.
28
Gann, History of Northern Rhodesia, p. 100; Munro, Africa and the International Econ-
omy, pp. 84–5.
lated that exploration of the territory north of South Africa’s rich mines
would yield a ‘second Rand’ which could provide more than enough
profit to support the skeletal administration the Company began to build
in the closing decade of the nineteenth century. Though these hopes were
largely disappointed, the Company’s early acquisition of mineral rights
had considerable fiscal impacts on Northern Rhodesia long after it ceased
administering the territory.
The BSA Company was the longest-lived of the chartered companies
established to extend British rule into Africa. Supported by the profits of
Rhodes’ mining enterprises in South Africa, it became the only Victorian
chartered company to survive in its original role past World War One.
But, in the end, it too succumbed to the difficulties of attempting to earn
a profit while governing vast territory: it ceded administrative authority
over its territories in 1924.29
The end of company rule in Africa and elsewhere meant that the British
government had to find another way of outsourcing the costs of imperial
rule. In place of the chartered company they found the local taxpayer.
Those territories which the British government ruled directly were also
expected to pay the costs of their own administration, keeping their own
accounts strictly separate from the British government’s own finances. Fre-
quently referred to as self-sufficiency policy, this structure had emerged in
response to the changing priorities of imperial rule in the nineteenth cen-
tury, and had been elaborated fully by the early twentieth century. It was
to become perhaps the most influential imperial policy in colonial Africa.
ORIGINS OF COLONIAL
SELFSUFFICIENCY POLICY
Local contributions to the costs of colonial governance had existed almost

from the beginning of imperial rule. Taxes were collected by early colonial
administrations in the Americas, and put towards the establishment of
limited local public services.30 However, the financial structure of the
early Empire differed from its later incarnation in its fluidity. Chartered
companies were central to colonial governance in some areas. However,
the military significance of the Empire meant that in other regions the
separation between colonial and metropolitan finances was not as strict as
29
Southern Rhodesia became self-governing, while Northern Rhodesia and Nyasaland
became Crown colonies.
30
For more detail on taxation in the North American territories, see Rabushka, Taxation
in Colonial America; for examples in the Caribbean colonies, see Chalmers, Currency in the
British Empire, pp. 46–93.
it would become in later years. Certain colonial defence forces were paid
by the British exchequer, as were some British officials governing the
colonies.31
Formal annexation of African colonies by the British government came
amid fierce debates in Britain about whether imperial expansion was in
fact the best use of British resources. If 1815 marked Britain’s initial foray
into colonial rule in sub-Saharan Africa with the acquisition of the Cape
Colony in South Africa, it also signified the beginning of changing atti-
tudes towards imperial expenditure. The end of the Napoleonic wars and
the collapse of the Spanish Empire left only two major players in the im-
perial game. The military significance of colonies declined dramatically,
along with the willingness of British taxpayers, already weary of war tax-
ation, to pay for them.32
As a result of these tensions, the policy of colonial self-sufficiency was
born. British taxpayers were no longer willing to subsidize the governance
of an ever-expanding Empire, but nor were they (mostly) willing to give
it up. Although the purposes of the Empire may have been a matter of
some controversy in Britain, abandoning territory once acquired was
thought to be a blow to British international prestige.33 If the resources to
support the administration of the Empire were not going to come from
Britain, they had to be raised in the colonies themselves.
In the colonies, this policy was often justified by the idea that Britain’s co-
lonial subjects should rightfully pay for the services provided by the colonial
administration. These services, according to one administrator, included
security of life and property, freedom from the tyranny of witch doctors and
kindred superstitions, assistance in fighting epidemics amongst themselves
and their stock, the administration of an impartial and trustworthy justice, a
wholesome and beneficial moral education, and the increased comfort, secur-
ity and wealth of what might be termed their whole social environment.34
Railways could also have been added to this list. Though phrased in pater-
nalistic terms typical of the period, this is not entirely a contrived attempt
to justify colonialism. Imperial rule, along with the changing global econ-
omy, created new opportunities for many Africans even as it undermined
31
Chalmers, History of Currency in the British Empire, p. 24; Davis and Huttenback,
Mammon and the Pursuit of Empire, p. 146.
32
Fieldhouse, Economics and Empire, p. 93.
33
Several small territories were ceded to other powers following World War One in
compensation for services to the war effort, e.g. Jubaland in East Africa. These losses were
more than made up by Britain’s acquisition of the former German East Africa (Tangan-
yika). For more on the reallocation of colonial territory after World War One, see Louis,
‘Great Britain and the African Peace Settlement of 1919’.
34
Coryndon to Secretary, BSA Company, 9 January 1903, in NAZ HC1/2/7.
others. The new railways constructed by the imperial rulers, at great ex-
pense, dramatically reduced transport costs and allowed those living in
close proximity to increase their income dramatically through the export
of commodities. Rising commodity prices for many of the goods exported
from Africa added to this incentive.35 The net impact of these changes on
African living standards is difficult to assess given the paucity of historical
data from the colonial period, but evidence suggests that at least for people
in areas of peasant export production, living standards may have increased
through the colonial period.36
But those benefits were not universal, and even where they were present
the very limited legitimacy of colonial tax systems was a constant chal-
lenge for colonial officials. In order to justify increasing revenue collec-
tions locally, they needed to do more than make vague claims as to the
benefits of railways and pax Britannica. They needed, at least in some
measure, to respond to taxpayer demands regarding the allocation of local
expenditure. This was particularly true in colonies with articulate and
vocal opposition groups, whether African (as in the case of urban elites or
traditional rulers in the Gold Coast or Nigeria) or comprised of Asian and
European migrants (as in Kenya or Southern Rhodesia). For many colo-
nial officials these pressures were nearer and more compelling than direct-
ives from the metropole, which explains why administrations in the
colonies were often at odds with the Colonial Office in London.37
These disputes complicated the implementation of self-sufficiency
policy. London’s agents in the colonies often had different priorities than
Whitehall politicians, and were never entirely under British control, shown
most dramatically in the rebellion of the North American colonies in 1776
but more commonly in quieter bureaucratic rebellions over particular pol-
icies, of which several examples will appear in this text.38 Furthermore,
colonial administrators could feel relatively safe in the knowledge that
however much the British Treasury wanted to minimize spending on the
Empire, the British government was unlikely to let one of its colonies de-
fault. A colonial default would be a major blow to British prestige, and
would risk the transfer of additional territory to Britain’s imperial rival,
France. There were always exceptions to the rule of colonial self-sufficiency.
35
Munro, Africa and the International Economy, pp. 87–8.
36
See, for example, Bigsten, ‘Welfare and Economic Growth in Kenya’.
37
These disputes are evident in contemporary correspondence, but have received lim-
ited attention from historians. For an exception, see Maxon, Struggle for Kenya. Other
examples emerge from high profile objections by colonial governors like Governor Bourdil-
lon of Nigeria to colonial development policy. For examples, see Meredith, ‘British Gov-
ernment and Colonial Economic Policy’.
38
Controlling agents in the colonies was a challenge of empire-building from the begin-
ning. See Benton, A Search for Sovereignty.
Colonies with continuing military significance like Malta, Bermuda, and

St Helena were never really expected to pay their own way, and carried
large deficits through much of the colonial period.39 As later experience
would show, Britain would in fact step in if help were urgently needed.
The British government also accepted, for reasons discussed below, that
most African colonies would need initial investments to establish basic
infrastructure and administration before revenue could be raised.
These exceptions, and the knowledge that they would not be allowed
to default, meant that to be effective, self-sufficiency policy needed to
provide incentives for colonial administrators to make a genuine effort to
fund local expenditure using local revenue. Such an incentive was pro-
vided by a system of conditional grants given to colonies that needed fi-
nancial help. Britain would step in if help were needed, but only with
specific conditions. The most important of these was that any colony
accepting a grant-in-aid would be forced to submit its budget for that
year to the British Treasury for auditing. Treasury control, as this was
termed, gave Treasury officials line-item veto power over colonial budgets.
This power was used to make reducing British subsidies the top priority
in setting the budget. When Nyasaland, for example, attempted to use
growth in anticipated revenue to increase its spending on scientific re-
search, agriculture, and the railway in the following year, the request was
declined. The Secretary of State’s response to the governor stated explicitly
that a ‘substantial proportion of increase of revenue should be devoted to
reduction of grant-in-aid. Accidental existence of larger balance does not
affect this necessity.’40 Colonial officials, who were under considerable
local pressure to respond to taxpayer demands and were responsible for
maintaining order in the colonies, dreaded the prospect of Treasury con-
trol. As a result, they worked hard to ensure that they could raise enough
revenue to sustain their administrations without assistance from the Brit-
ish Treasury.
FA C TO R E N D OW M E N T S A N D
PRE COLONIAL INSTITUTIONS
The failure of chartered companies across the Empire to mobilize suffi-

cient local resources to keep their balance sheets in the black did not bode
well for the ability of colonial administrations established by the British
39
Davis and Huttenback, Mammon and the Pursuit of Empire, p. 146.
40
See Governor of Nyasaland to Secretary of State, 19 October 1911; Secretary of State
to Governor of Nyasaland, 23 October 1911, in TNA CO 879/109.
government to do the same. Nowhere was this more true than in Africa,
where the local economic resources of many colonies were insufficient to
maintain the relatively expensive colonial administrations established
there.
Part of the problem was that, in general, Africa’s factor endowments
did not lend themselves to the construction of intensive tax systems and
highly bureaucratized governments. With a few notable exceptions, Africa
has historically been characterized by the abundance of land relative to
population and capital.41 In general, Africa’s relative land abundance had
made it difficult for rulers to assert their authority, for two reasons. First,
unhappy subjects could simply flee the jurisdiction of a ruler who exacted
too much. As a result of these constraints, pre-colonial institutions in
most parts of the continent were highly decentralized with limited
bureaucratic structure. Second, land abundance limited incentive to
invest in intensive agriculture, which in the long run reduced the level of
production surplus to subsistence needs, which any centralized ruler
would need to tax.
Many scholars have drawn links between geographical endowments
and political institutions, from the despotism of Asia’s hydraulic societies
on one end to ungovernable highlands at the other.42 Allen argues that
the early rise of the Egyptian state was facilitated by the advent of agri-
culture in the Nile Valley which permitted both a food surplus, on which
the Pharaohs and their retinue subsisted, and a labour surplus, used to
raise troops and build pyramids. The desert surrounding the Nile Valley
made it difficult for producers to escape this regime.43 In sub-Saharan
Africa, land abundance made it easier for discontented taxpayers to ‘vote
with their feet’, which in turn made it difficult for centralized states to
develop.44 It also influenced the possible surplus from which such rulers
could raise taxes. Labour shortages constrained the productivity of land
and the self-sufficiency of many family groups limited specialization and
forestalled Smithian growth.45
Engerman and Sokolof f ’s influential work on the historical origins of
institutional differences in North and South America highlights the fact
that differences in natural endowments can create institutional differences
in two land-abundant regions. The livestock and grain production most
41
For a review of the evidence, see Austin, ‘Resources, Techniques and Strategies’, pp.
590–4.
42
Wittfogel, Oriental Despotism; Scott, The Art of Not Being Governed.
43
Allen, ‘Agriculture and the Origins of the State’.
44
This phrase was coined in an influential paper on local public expenditure. See Tie-
bout, ‘A Pure Theory of Local Expenditures’.
45
Austin, ‘Resources, Techniques and Strategies’, pp. 589–90.
suited to the North American climate favoured the development of small

family farms, while economies of scale in South American cash crop pro-
duction led to the emergence of large plantations reliant on slave labour.
These different trajectories had long-run consequences for inequality and
economic development in the two regions.46
The same was true for Africa, where despite general land abundance,
population density varied widely. Higher population density and larger
surpluses could be found in areas of exceptional fertility, or due to security
concerns during periods of instability, thus changing both economic and
political dynamics.47 There were therefore different degrees of centraliza-
tion amongst pre-colonial African political institutions. These differences
were reflected in the political economy of colonial states, which relied to
a great degree on the existing endowments, both natural and political, of
the territories they governed.
This effect was most readily visible in the policy later articulated by
Lord Lugard as ‘indirect rule’, which incorporated indigenous rulers into
the colonial administration and, in its pure form, allowed them to con-
tinue ruling according to their own methods.48 Though later developed
into theory in Lugard’s The Dual Mandate in British Tropical Africa, pub-
lished in 1922, this policy was motivated as much by pragmatism as con-
viction.49 Lugard, who spent much of the late nineteenth century variously
employed by chartered companies in Africa, joined the colonial service in
1897 at the invitation of Joseph Chamberlain, who was then Colonial
Secretary. His early experience with the formidable indigenous regimes of
Northern Nigeria had given him an appreciation of the potential value of
diplomacy with African leaders. In his dealings with them, Lugard em-
phasized that the Northern Nigerian rulers would be supported by the
British government but largely allowed to govern their own subjects ac-
cording to their own methods.50 In The Dual Mandate, Lord Lugard
named two central principles of administration: decentralization and
continuity. With regard to decentralization, Lord Lugard wrote that ‘it
has indeed been said that the whole art of administration consists in judi-
cious and progressive delegation’.51
46
Engerman and Sokoloff, ‘Factor Endowments, Institutions, and Differential Paths of
Growth’.
47
Austin, ‘Resources, Techniques and Strategies’, pp. 591–2.
48
Perham, ‘A Re-Statement of Indirect Rule’, p. 321.
49
Brown argues that the expediency of the policy is most obvious in the similarity of
policies adopted by French colonial governments. Brown, ‘Indirect Rule as a Policy of
Adaptation’, pp. 49–50. A similar argument is made in Marquard, ‘The Problem of Gov-
ernment’, p. 250, and Young, African Colonial State, p. 107.
50
Brown, ‘Indirect Rule as a Policy of Adaptation’, p. 49 and Kirk-Greene, ‘Lugard’.
51
Lugard, Dual Mandate, pp. 96–7.
Under a system of indirect rule, the structure of the colonial adminis-

tration, particularly at the local level, was necessarily dependent on the
structure of pre-colonial political institutions. More centralized pre-colo-
nial entities, like those of Northern Nigeria, allowed for a greater degree
of delegation than decentralized institutions which colonial officials strug-
gled to co-opt. The ways in which such differences manifested themselves
in colonial rule are telling. In Kenya, for example, pre-colonial political
units were largely acephalous, providing no obvious counterpart to the
Northern Nigerian emirs with whom Lugard had interacted. As a result,
Kenya’s chiefs were appointed rather than selected from existing rulers,
and were, as Hicks argues, ‘purely civil servants’.52 They were bound by
central administration policy and had no de jure ability to make inde-
pendent decisions about the governance of their jurisdictions.53 This
system also involved greater control by district officers than in colonies
like Tanganyika, Nigeria, or Nyasaland.54
Where more powerful African rulers did exist, however, they could in
some cases maintain significant authority. Barotseland, an area in the
south-west of the territory that would become Northern Rhodesia, was
governed according to a unique set of regulations dating from the begin-
ning of chartered company rule which more closely approximated the ver-
sion of indirect rule imposed by Lugard in Northern Nigeria. An agreement
concluded in 1900 between Lewanika, the Barotse paramount chief, and
BSA Company administrator Robert Coryndon (later governor of Kenya)
allowed Lewanika to retain all his customary rights of governance, and
gave him an annual payment of £850 from the Company. Later agree-
ments allocated to Lewanika and his successors a percentage of the hut and
poll tax revenue collected in his jurisdiction, revenue which was to be used
for educational, medical, veterinary, and other services in Barotseland.55
Barotseland has been described as ‘a protectorate within a protectorate’, in
which the chief and his council had ‘far wider powers’ than African rulers
in the rest of Northern Rhodesia.56
Pre-colonial factor endowments therefore shaped colonial administra-
tions in a variety of ways. But the primary influence was fiscal. The abun-
dance of land and shortage of labour in Africa meant that colonial
administrations, like the African rulers and chartered companies that had
come before them, faced an uphill battle in trying to raise sufficient rev-
enue to pay their own costs.
52
Hicks, Development from Below, p. 125.
53
Berman and Lonsdale, ‘Coping with the Contradictions’, pp. 89–90.
54
Hailey, Native Administration, pp. 203–4.
55
This was similar to the practice in Bechuanaland. See Makgala, ‘Taxation’, p. 282.
56
Marquard, ‘The Problem of Government’, pp. 247–8.
The fiscal challenges faced by early colonial administrators in Africa were

nothing new in the history of the British Empire. Concerns about the
costs of imperial governance had shaped the Empire from the beginning,
starting with the first charter granting a private company exclusive rights
to trade in exchange for taking on the costs of imperial expansion. Over
the several centuries of imperial rule which preceded the Scramble, the
British government had honed its ability to outsource the costs of govern-
ing its ever-expanding dependent territory. When the use of chartered
companies failed to insulate the British government from these costs, at-
tention turned to local revenue within the colonies, and the policy of
colonial self-sufficiency was born.
But while the challenge of paying for Empire was nothing new, coloni-
alism in Africa was perhaps the greatest test of Britain’s abilities as an
empire-builder. African colonies were amongst the largest in the Empire,
and with the partial exception of West Africa they were colonized on the
basis of potential economic value rather than known resources or existing
trade links. Africa’s geography did not generally lend itself to the estab-
lishment of centralized political institutions like those metropolitan states
were attempting to establish, lacking a sufficient surplus in both produce
and labour to support them. As the failed chartered companies had
learned to their detriment, administrative self-sufficiency would not come
without a large initial infusion of capital.
During the early years of colonial rule the primary aim of administra-
tors, once the most violent African resistance had been overcome, was to
become financially self-sufficient as rapidly as possible. How colonial ad-
ministrators attempted to overcome this fiscal obstacle reveals much about
the purposes of imperialism in Africa, and about the extent to which local
circumstances shaped their endeavours. The fiscal institutions they estab-
lished in the first decades of colonial rule shaped the political and eco-
nomic institutions progressively elaborated and expanded in the colonies
through the remainder of the colonial period and even after independ-
ence. The foundations of the ‘Leviathan Africanus’ are the subject of the
next chapter.57
57
For the origin of the phrase, see Hyam, ‘The British Empire in the Edwardian Era’,
p. 58.
3
Fiscal Foundations of the
African Colonial State
During the first few years after its occupation it is only natural that
the expenditure in an undeveloped territory such as East Africa
should be greatly in excess of its revenue, but as time goes on, there
is every reason to hope that the latter will increase out of proportion
to the cost of government. (Sir Arthur Hardinge, Report on the East
Africa Protectorate, 1897)
Even proponents of British imperialism in Africa were under no illusions
that creating financially self-sufficient colonies there would be easy, or with-
out cost. For colonial administrations to make enough money to be finan-
cially self-sufficient, the British government would first need to spend it,
possibly in significant quantities. With very few exceptions, existing re-
sources would not pay for colonial governance. Even colonies with mineral
resources, preferred by empire-builders because of their capacity to generate
revenue quickly, required initial investments in infrastructure before those
resources could be harnessed to fund colonial administrations.1
There were also many within Britain who did not believe that invest-
ment in Africa would yield a surplus sufficient to pay for governing Brit-
ain’s new imperial conquests, and who were anxious about the prospect of
the territories becoming a financial burden. As Roberts puts it, ‘imperial-
ism was not so popular in Europe that tax-payers, who were also voters,
were ready to pay its bills’.2
Those charged with administrating the African colonies thus had a dif-
ficult balance to strike, calculating how much they needed to invest to
make their territories pay for themselves, without spending so much as to
strip their project of political support. This tension is visible in the early
budgets of colonial states, and colonial institutions and policies reflected
the balance they ultimately reached. Indirect rule, described in the previ-
ous chapter, was one product of the financial constraints of colonial ad-
1
Wrigley, ‘Patterns of Economic Life’, p. 211.
2
Roberts, ‘The Imperial Mind’, p. 26.
ministrations. Another was the reliance of colonial economies on a limited

number of export commodities. A third was the encouragement of Euro-
pean settlement in some territories (though not in others). All three have
continued to influence African polities and economies in the decades
since the end of colonial rule.
Colonial budgets from the first decades of colonial rule particularly
illustrate the importance to new administrations of raising revenue.
Spending thought to bring a relatively fast return in terms of revenue in a
short period of time was prioritized. They also reveal the importance of
local constraints in designing colonial fiscal systems. Revenue sources
were tailored to the resources of individual territories. This chapter is de-
voted to exploring the early budgets of African colonies, and their influ-
ence on the development of political and economic institutions in
individual colonies.
THE DECADE OF DEFICITS, 19001910
Sir Arthur Hardinge’s prediction that East Africa would be able to pay for
its own administration within ten years from 1897 proved to be exces-
sively optimistic. In fact, very few African colonies managed to make their
budgets balance before World War One. Figure 3.1 shows the budget
position of African colonies from 1885 until 1910.
Though exceptional years created early surpluses in Nigeria, and col-
onies like Sierra Leone and the Gold Coast were earning steady surpluses
by the end of the period, the general picture is one of financial struggle
across British colonial Africa.
Persistent deficits in the colonies during the first years of colonialism
reveal that, regardless of tough talk from the Treasury about colonial self-
sufficiency, the British government did subsidize colonial administrations
during their first decades. But what was this expenditure paying for? If
Goldscheid’s assertion that ‘budgets are the skeleton of the state, stripped
of all misleading ideologies’ is correct, the early budgets of colonial terri-
tories should reflect the goals and purposes of British administrators in
different regions of Africa.
To answer this question requires further exploration of the theories of
political economy prevailing in the late nineteenth and early twentieth
centuries. This was a period in which ideas about the state’s role in the
economy and society were changing, but economic orthodoxy still dic-
tated that the state’s role should be small relative to twenty-first-century
standards. Levels of public expenditure in metropolitan countries reflected
these changes, increasing from 9.4 per cent of GDP in 1870 to 30
Fiscal Foundations of the African Colonial State 33
£300,000
£200,000
£100,000
£0
–£100,000
–£200,000
–£300,000
–£400,000
–£500,000
–£600,000
–£700,000
85
87
89
91
93
95
97
99
01
03
05
07
09
11
13
18
18
18
18
18
18
18
18
19
19
19
19
19
19
19
Nigeria Gold Coast Sierra Leone Gambia Uganda
Kenya S. Rhodesia N. Rhodesia Nyasaland
Fig. 3.1. Budget position of British colonies in Africa, 1901–10

Source: Calculated from Frankema, ‘Colonial Taxation’.
per cent in 1937 and 43 per cent in 1980. Tanzi and Schuknecht argue
that this growth in public spending was ‘a response to changing percep-
tions about what the government should do’.3
Within Europe, Britain was particularly committed to the idea of a
minimalist public sector. Victorian norms of political economy dictated
that, in theory at least, taxation and government expenditure were kept to
a minimum to allow the private sector as much initiative as possible.
Among fiscal historians this philosophy of public finance is often referred
to as ‘Gladstonian finance’, named after William Ewart Gladstone, Chan-
cellor of the Exchequer through much of the mid-nineteenth century and
then again in the 1880s. Gladstone believed that ‘no Chancellor of the
Exchequer ought to add to the taxation until he has made every effort
within his power to cut down all wasteful and unnecessary
expenditure’.4
The lack of accurate GDP data for African countries in the early colo-
nial period prevents direct comparisons of the level of colonial public ex-
penditure with that of the developed world. It is possible to speculate that
colonial public expenditure may have represented a higher percentage of
local GDP than the developed world average, owing to the small size of
African economies during this period. Cain and Hopkins claim that the
3
Tanzi and Schuknecht, Public Spending, pp. 6–7.
4
Hirst, Gladstone, p. 139. See also Cain and Hopkins, British Imperialism, p. 135.
low levels of private investment in all African colonies apart from South
Africa made the public sector a particularly important influence on colo-
nial economies.5 On the other hand, the early expenditure of the colonies
reveals a strictly circumscribed role for the state. Expenditure was concen-
trated on a combination of administration, defence, and infrastructure.
Relatively little expenditure was devoted to those things which were ex-
panding government budgets in Europe, particularly social spending on
education, medical care, old-age pensions and poor relief.
Figure 3.2 gives a detailed breakdown of public spending in Kenya
from 1901 to 1910. It shows a pattern typical of several African colonies
during this period. Military and police absorb the largest share of spend-
ing in the beginning of the decade, as British officials struggled to quash
resistance and establish control over the territories they were trying to
govern. As resistance to colonial rule subsided, infrastructure became the
most important item in colonial budgets.
In Kenya, where the Uganda Railway was funded with a £5.5 million
loan from the British Exchequer, railways were the biggest investment.6
Infrastructure, particularly transport infrastructure, was thought to be the
key to increasing local revenue. The railways would reduce transport costs
and encourage the development of export industries.7 Income from export
production would stimulate demand for imports, largely of manufactured
goods, which could then be taxed along with exports to generate income
for the colonial state. In Britain, this strategy was particularly evident in
the policies of Joseph Chamberlain, who served as Secretary of State for
the Colonies from 1895 to 1903.8 Though later colonial secretaries were
not quite as exuberant about the idea of colonial development, their pol-
icies pursued a similar strategy in emphasizing infrastructure as the fastest
route to economic expansion.9
This idea was also adopted enthusiastically by administrators in the
colonies, who believed improving transport infrastructure was the key to
the economic development (and, in consequence, financial stability) of
their territories.10 A report authored by a committee appointed to inquire
5
6
The loan was forgiven in 1933. Kubicek, ‘British Expansion’, p. 258; Wrigley, ‘Pat-
terns of Economic Life’, p. 211.
7
For the impact of railways, see Munro, Africa and the International Economy, p. 94.
8
For an overview of Chamberlain’s policies, see Havinden and Meredith, Colonialism
and Development, pp. 86–90.
9
For more detail on British colonial development policy before World War One, see
Constantine, Colonial Development Policy, ch. 2; Havinden and Meredith, Colonialism and
Development, ch. 5.
10
East African Protectorate, Economic Commission, p. 3; Van Zwanenberg and King,
Economic History, p. 183.
into Kenya’s development prospects in 1919 argued that the colony

needed only an adequate transport system ‘to swell within one decade
into a World-Mart comparable with the century-old growths of the Do-
minions’.11 Colonial officials often used the potential benefit to economic
expansion and therefore revenue to justify expenditure on infrastructure,
as in a 1911 memorandum by Nyasaland’s Director of Public Works
explaining the need for increased spending on road-building in Mlanje.
‘When I mention that one of the principal exports from Mlanje is tea,
which “flushes” and is exported during the rainy season, and when I point
out further that the earth track road existing at present is the only connec-
tion between the tea estates and the railway, and which road is absolutely
impassable during the rainy season, it will be understood that the macad-
amising of this road is an urgent necessity for the present and future de-
velopment at Mlanje.’12
Such investments often influenced other policies as well. Fearing for
the prospects of the railway to repay this loan, early colonial administra-
tions encouraged European and Asian settlement as the quickest means of
developing export industries in the colony. As Wrigley notes, owing to the
low population density of the territory, it was ‘natural to infer that there
was ample room for immigrants and that without immigrants there could
be little hope of a rapid growth of production and trade’.13 Several other
colonies, including the Rhodesias, followed a similar strategy. The pres-
ence of European settlers had a powerful influence on the colonial fiscal
state.
The third major item of expenditure was administration, which would
continue to absorb a large percentage of colonial resources throughout
the period. This was true not only in Kenya, but across colonial Africa.
Frankema’s study of colonial public expenditure shows that average ex-
penditure on administration and defence/policing was significantly higher
as a share of total expenditure in colonial Africa than in New Zealand
(used as a benchmark welfare state) in 1925.14
The exorbitant levels of spending on administration did not reflect the
size of colonial governments, which in terms of number of personnel were
actually very small. Ronald Robinson was only exaggerating a little when
he described British colonial rule as ‘a gimcrack effort run by two men
and a dog’.15
11
East Africa Protectorate, Economic Commission, p. 4.
12
Director of Public Works to Deputy Governor, 10 November 1911, in TNA CO
879/109.
13
14
Frankema, ‘Colonial Taxation’, pp. 142–4.
15
Cited in Kirk-Greene, ‘Thin White Line’, p. 26.
£800,000
£700,000
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
1901 1902 1903 1904 1905 1906 1907 1908 1909 1910
Other Economic services Social services
Infrastructure Administration Military and police
Fig. 3.2. Public expenditure in Kenya, 1901–10

Source: Calculated from East Africa Protectorate, Blue Books (1901–10).
However, the salaries of colonial administrators were very high, even by

British standards, which was a major factor in the generally high cost of
administration.16 In later years, these high salaries influenced spending
priorities by making colonial governments hesitant to commit to public
projects which required hiring new staff. Not only would such projects
require future spending on the salaries of new personnel, they would also
create long-term liabilities for pension contributions.
While some British subsidies were in the form of loans, like that granted
for the Uganda Railway, other assistance was given in the form of a grant-
in-aid intended to make up the shortfall between local revenue and ex-
penditure. Such grants came with a cost. As the previous chapter discussed,
for colonies in receipt of a grant-in-aid the British Treasury had the power
to approve or disapprove (on a line-item basis) budget estimates for each
16
For more detail on the diminutive size of colonial administrations, see Kirk-Greene,
‘Thin White Line’ and Richens, ‘Economic Legacies’. For the level of colonial pay, see
Frankema, ‘Colonial Taxation’, p. 144.
year in which a grant was received and for three years following the last
grant-in-aid.17 Furthermore, new expenditure was limited by the so-called
half-and-half principle, in which only half of any revenue increases could
be devoted to new spending commitments, while the rest was used to
reduce the grant-in-aid.18 The Governor of Nigeria, Sir Bernard Bourdil-
lon, would later complain that colonies in receipt of grants-in-aid ‘were
regarded as poor relations who could not, in all decency, be allowed to
starve, but whose first duty was to earn a bare subsistence and to relieve
their reluctant benefactor of what was regarded as a wholly unprofitable
obligation’.19 This attitude led to strict limitations on colonial expendi-
ture, as suggested by the limits placed on Nyasaland’s expenditure esti-
mates, described in the previous chapter. It also appears to have had the
effect of giving colonial budgets a decidedly Victorian character. Table 3.1
compares the average allocation of public spending in Kenya from 1901
to 1910 with Britain’s expenditure in 1880.
The predominance of spending on the military and administration is
immediately noticeable in both British and Kenyan public expenditure.
Also notable is the limited spending on social services. Britain spent less
of its funds on infrastructure, which may reflect the fact that in contrast
to Kenya, British infrastructure was already well developed by the late
nineteenth century, and therefore required less initial investment. It may
also be the result of the fact that British infrastructure projects were more
popular with private investors than were railway projects in East Africa.
The large percentage of British spending in the ‘Other’ category repre-
sents debt servicing, which would in future years become an important
element of colonial budgets as well.
The other major point of difference between the British budget of 1880
and Kenya’s spending in the first decade of the twentieth century is the
spending under what is called here economic services. In Kenya, as well as
other colonies, this category refers to non-infrastructure projects which
were nevertheless intended to promote the expansion of primary export
industries. This particularly included efforts to improve the territory’s po-
tential as an agricultural producer, through scientific research or efforts to
combat epidemics amongst the livestock population. In Kenya, Agricul-
ture and Veterinary departments became increasingly important in the
budget, particularly once the colony was no longer under Treasury
control.
17
Constantine, Colonial Development Policy, p. 14.
18
For an explanation of the half-and-half principle, see correspondence on 1912–13
estimates in TNA CO 879/109.
19
Sir B. Bourdillon to Mr MacDonald, Secretary of State, 5 April 1939, in Ashton and
Stockwell, British Documents, p. 70.
Table 3.1. Allocation of central government expenditure (% of total)
Military Administration Infrastructure Economic Social Other
and services spending
police
Kenya 25 25 40 6 4 1
(1901–10)
Great Britain 31 23 8 0 5 34
(1880)
Sources: As for Figure 3.2; Mitchell and Deane, Abstract of British Historical Statistics, p. 397.
The implications of this comparison should not be taken too far. Ex-
penditures are classified slightly differently in the Mitchell and Deane
database than in the colonies, and the categories listed here may not be
precisely comparable. More importantly, the British data do not include
local government expenditure, which would have included the lion’s share
of national transfers for poor relief, among other social services.20 There-
fore the proportion of total expenditure devoted to social spending is
likely to be underestimated here.21
On the other hand, expenditure data from the colonies also ignore any
support provided by sources outside the central government, whether by
traditional African authorities or missionaries.22 West Africa in particular
had a tradition of philanthropy among members of the African elite.
While such practices are less well documented in East and Central Africa,
families and neighbours almost certainly bore most of the expense of
maintaining the poor or indigent.23 Missionaries were almost the sole
source of institutional provision for the poor in the early colonial period.
The services provided by missionaries covered a wide range, and included
running poorhouses, schools, and hospitals.24 Since none of these were
officially part of the colonial government, administrators collected almost
no data on any such transfers, but they often relied on their existence
when they decided how much to spend on social services.25 In both the
20
Lindert, Growing Public, pp. 84–5.
21
It should, however, be noted that 1880 marked the end of a period of cutbacks in
British poor relief. Lindert, Growing Public, p. 47.
22
In one of the few studies of the subject, John Iliffe argues that welfare provision in
colonial Africa was characterized by fragmented and complex systems of support from a
variety of sources, most of which were extra-governmental. See Iliffe, African Poor, ch. 11.
The similarly fragmented provision of health services is also observed in Mair, Welfare in the
British Colonies, p. 7.
23
Iliffe, African Poor, pp. 193–4, 213.
24
For additional detail, see Iliffe, African Poor, pp. 195–7; Mair, Welfare in the British
Colonies, pp. 30–1; Snelson, Educational Development.
25
Iliffe, African Poor, pp. 205–6.
colonies and in Britain, therefore, it is safe to say that Victorian central

government budgets provided little in the way of social services to their
constituents, relying instead on other institutions.
Comparing patterns of expenditure under Colonial Office rule with
those of chartered company rule provides another perspective on colonial
budgets, one which helps explain the transition to formal rule in Africa.
Northern Rhodesia was one of only two colonies which remained under
company rule during the decade prior to World War One. Contrasting its
expenditure with that of Kenya illustrates the extent to which the British
government was both more able and more willing to run its colonies at a
deficit than a private company. Though physically larger than Kenya by
over 30,000 square miles, Northern Rhodesia spent less on infrastructure.
In 1910, for example, Northern Rhodesia’s spending on infrastructure
totalled just over £16,000 (not including railway expenditure), while
Kenya’s spending on infrastructure (even excluding the Uganda Railway)
was more than seven times as much, at £113,000. Administration in
Northern Rhodesia absorbed nearly 60 per cent of total expenditure, in
contrast to 21 per cent in Kenya.26
These differences in spending patterns were the result of a calculated
decision by the BSA Company to limit its potential losses in Northern
Rhodesia. In 1904, the Company had capped the excess of administrative
expenditure over local revenue to £60,000.27 The limited resources avail-
able left little for expenditure beyond the maintenance of a basic admin-
istration. The BSA Company was also not permitted to borrow on its
assets in Northern Rhodesia to help fund development in the colony.28
Such caps were one reason why the British government was seen by
contemporaries to be more generous in funding the expansion of infra-
structure and economic services within the territories under its control.
The BSA Company’s unwillingness to invest in Northern Rhodesia’s in-
frastructure was a frequent subject of complaint by the Advisory Coun-
cil.29 Council member and Livingstone Mail editor Leopold Moore, for
example, campaigned actively after the end of World War One for the
territory to become a Crown Colony under Colonial Office rule. He was
attracted to the idea, according to Wood, by the level of aid given to
26
East Africa Protectorate, Blue Book 1910 ; British South Africa Company, Directors’
Report 1910.
27
British South Africa Company, Directors’ Report 1903.
28
Fox, Memorandum, ch. 5.
29
For one example, see the account of the debate about road construction in Northern
Rhodesia, Proceedings of the Advisory Council: 28 September to 3 October 1918, p. 12. Pro-
ceedings of other meetings provide further examples.
Nyasaland.30 At the same time, however, Nyasaland felt its interests were
ignored in favour of colonies ‘more before the eye of the home public’
because of their geographical position, such as Kenya and Uganda. In
1911 the Governor complained that people in Nyasaland felt these two
colonies received ‘more equitable consideration’.31
The generosity of the British government in establishing its colonies
should not be overstated. While the Colonial Office was aware that few
colonies could be immediately self-sufficient, it was made clear to colonial
officials in colonies like Nyasaland that their first priority should be elim-
inating the need for the grant-in-aid. Public spending was limited sub-
stantially to administration costs, the military, and the construction of
infrastructure. Local administrators were never satisfied with the level of
investment authorized by the imperial government, believing that larger
sums were needed in order for export growth in their colonies to reach its
potential. They were therefore eager to free themselves from the yoke of
Treasury control in order to set their own budget priorities.
T H E R E V E N U E I M P E R AT I V E A N D
T H E C O L O N I A L TA X S TAT E
The limitations imposed by the grant-in-aid system and the desire to ac-
quire greater control over their budgets made it vital for colonial admin-
istrations to build tax states of their own which could support further
development. This was perhaps the biggest challenge of building colonial
states. Colonial governments quickly discovered that some types of tax-
ation were more effective than others in their particular territories. Fur-
ther, they realized that their ability to tax was hindered by both the limited
administrative capacity of colonial institutions and their lack of legitim-
acy with the local population.
Increased revenue collections were important for several reasons. They
would not only allow colonial administrations to reduce and eventually
eliminate the grant-in-aid, they would also allow for greater borrowing to
fund large-scale projects. Colonial loans were strictly regulated by the
British Treasury, which acted as implicit (if not explicit) guarantor for its
colonies. This allowed colonies to enjoy better interest rates than inde-
pendent countries of similar levels of development, but it also gave the
Treasury a strong incentive to ensure that colonies did not take on more
30
Wood, The Welensky Papers, p. 43. For more on local views of company rule and the
transition to Crown Colony status, see Wills, History of Central Africa, pp. 242–50.
31
Governor W. H. Manning, Nyasaland, to Secretary of State for the Colonies, 18
November 1911, in TNA CO 879/109.
debt than their revenues would allow them to service.32 Further, balanced
budgets had a greater symbolic value according to Gladstone and his sup-
porters. Matthew argues that Victorian budgets were central in establish-
ing an expectation of political stability.33 In newly colonized territories,
therefore, a balanced budget was a signal that colonial rule was on a firm
and stable footing.
But which types of taxes could be imposed effectively in each colony
depended on the existing political and economic features of the colony.
Most colonial budgets relied on two key sources of revenue, trade taxes
and direct taxes, but the structure and importance of each of these taxes
varied enormously across the continent. Diversity in the structure of co-
lonial tax states emerged from a very early period, as colonial administra-
tors discovered the revenue sources that would and would not work. The
differences which emerged were important in the economic and political
development of the colonies for two reasons. The first is that the types of
taxes imposed shaped both economic and political relationships through
the colonial period, often providing the basis for political opposition to
the colonial state. The second was that tax systems in Africa and else-
where tend to exhibit a high degree of path dependence. Tax reform
creates winners and losers, and therefore is often politically difficult.34
Once in place, tax systems tend to persevere through economic and
political change. Thus the tax systems constructed by colonial adminis-
trators in the early years of the twentieth century survived, at least in
part, through decolonization.
Trade taxes
Common to all colonial budgets was revenue from trade taxes, which are
not merely a source of revenue but also an important tool in shaping the
commercial policy of an empire or a nation. Hopkins argues that the
purpose of British imperialism in West Africa was to maintain free trade
(preferably without political involvement, but with it if necessary). This
‘was in reality a passport to British supremacy. In conditions of “equal”
competition Britain was likely to dominate most world markets because
she could produce and transport manufactured goods more cheaply than
could any of her rivals.’35 Whatever the motive for it, a commitment to
32
Accominotti et al., ‘The Spread of Empire’, pp. 385–407; Gardner, ‘Making the
Empire Pay for Itself ’, p. 16.
33
Matthew, ‘Politics of Mid-Victorian Budgets’, p. 615.
34
For more on the ability of special interests to influence tax policy, and therefore make
it difficult to reform, see Bates and Lien, ‘A Note on Taxation’, pp. 53–4.
35
free trade in the colonies was evident in the tariff policies of the British
Empire before World War One.
Each of the European empires managed the commercial policies of
their territories differently. In 1922, the United States Tariff Commission
published a report on colonial tariff policies and the trade relationships of
each metropolitan country with its colonies. It identified three tariff re-
gimes which it used to distinguish the strategies of different metropolitan
governments: tariff assimilation, preferential treatment without assimila-
tion, and open door. Under a policy of tariff assimilation, the metropole
and colonies effectively form a customs union, in which tariff barriers
between members are eliminated and all members share an identical tariff
policy. In a preferential regime, tariff barriers between colony and
metropole may exist and the empire may not share a single tariff policy,
but tariffs will be lower for the home country and other members of the
empire than for countries outside the empire. An open door tariff is one
which can be used either to protect local industry or raise revenue (which
means it should not be confused with free trade), but draws no distinc-
tion between the products of the metropole and those of other
countries.
Each regime also differed in the amount of autonomy they granted
their colonies in setting their own tariffs. Assimilationist tariffs, like those
adopted in some French, American, and Japanese colonies, allowed de-
pendent colonies very little autonomy in setting customs tariffs.36 Apart
from the Dominions, the tariffs of all colonies were to some extent subject
to the control of the home governments. The tension between local and
metropolitan priorities meant that the policies of the home government
often influenced policy in the colonies themselves, but were only very
rarely adopted wholesale.
Britain had moved from the preferential mercantilist regime which had
prevailed until the early nineteenth century (and under which many of
the early chartered companies had received their royal charters) to one of
almost entirely open door tariffs by the beginning of the twentieth cen-
tury. Only a few colonies—generally those in which the transit trade was
predominant, such as Hong Kong and the Straits Settlements—actually
adopted free trade (or no tariffs).37 Since most colonies relied on customs
tariffs for revenue purposes, they opted instead for open door tariff re-
gimes without protection for local industries. The Indian government
36
U.S. Tariff Commission, Colonial Tariff Policies, pp. 33–6.
37
Ibid., p. 35. As the introduction pointed out, however, the lack of customs tariffs in
these colonies was due to their desire to not discourage trade, rather than an ideological
position regarding free trade.
under Lord Northbrook, for example, agreed in principle with the con-
cept of free trade, but ‘recognized that the need for revenue in India made
the establishment of free trade impossible for the time being’.38
The trade liberalization of the late nineteenth century had been ex-
panded to the developing world either through the extension of bilateral
agreements between European countries to their colonies, or through
multilateral treaties specifically applicable to particular regions.39 Accord-
ing to the Tariff Commission report, the extension of the terms of Brit-
ain’s bilateral agreements with other countries to the colonies varied over
time. Most-favoured-nation (MFN) agreements made in the period up to
around 1880 extended MFN treatment (but not open-door) ‘throughout
the whole extent of their possessions and territories’. By the 1890s, how-
ever, colonial administrations could choose whether to become party to
agreements negotiated by Britain.40
As Hopkins noted, the main purpose of the Berlin Act of 1885 was to
guarantee free trade through much of Africa despite partition. The Act
should therefore be seen not just as the legislative vehicle for the Scramble
for Africa but also as part of the MFN agreements which opened up trade
in the nineteenth century. The Act was modified in 1890 and 1919 by a
series of agreements (collectively known as the Congo Basin Treaties), but
remained in place until after World War Two. The original Berlin Act
extended free trade to the Congo Basin markets, along with free naviga-
tion on the Congo River to all traders. It prohibited monopolies or grants
of special concessions. In 1890, the International Conference of Brussels
modified the treaty to allow duties of up to 10 per cent ad valorem on
imports.
Preferential tariffs remained prohibited under the modified agree-
ments.41 Map 3.1 shows the approximate boundaries within which the
terms of the treaties applied. Even outside the Congo Basin region, how-
ever, tariffs remained low, designed to produce revenue rather than re-
strict trade. Efforts to use tariffs to strengthen trade relations between
different regions, for example the efforts of Kenya’s settlers to convince
the Colonial Office to join the South African Customs Union, were
quashed on either political or treaty grounds.42
The revenue from trade taxes was important in all colonies, but it was
particularly important in West Africa, where booming export trades in
38
Moulton, Lord Northbrook’s Indian Administration, p. 174.
39
Irwin, ‘Multilateral and Bilateral Trading Policies’, p. 98.
40
U.S. Tariff Commission, Colonial Tariff Policies, pp. 289–90.
41
U.S. Office of Strategic Services, Trade Policies in the Congo Basin, pp. 2–3.
42
Overton, Spatial Differentiation, p. 107; Dilley, British Policy, pp. 42–3.
Chad Eritrea
Sudan Djibouti
Nigeria
Ethiopia
Ubangal Chari
Cameroon
Somalia
Spanish
Guinea Uganda Kenya
Gabon Congo
Belgian Ruanda
Congo Urundi
Tanganyika Zanzibar
Angola Nyasaland
Northern
Rhodesia Mozambique
Southern
Rhodesia
Map 3.1. Map of the Congo Basin region

Source: Created using MapInfo based on a map from U.S. Office of Strategic Services, Trade Policies,
Appendix 5.
palm products and cocoa largely funded colonial governments. In Nigeria,

for example, customs revenue provided on average 72 per cent of total
revenue from 1901 to 1913. Customs and excise tariffs were an equally
important revenue source in the Gold Coast, the Gambia, and Zanzibar.
In mainland East and Central Africa, where levels of trade were much
lower, total customs revenue was also lower and often insufficient, requir-
ing other sources of revenue to be created. However, it remained an im-
portant part of the revenue side of the budget, contributing from around
15 per cent of total revenue (Kenya and Northern Rhodesia) to 20 per
cent (Uganda and Nyasaland).
The structure of trade taxes also varied between colonies, but was gen-
erally centred on a 10 or sometimes 15 per cent tariff on the value of
imports. Many colonies allowed building materials, agricultural equip-
ment, or other goods thought to contribute to economic expansion to be
imported at lower rates or duty free. Nyasaland, for example, charged a
general rate of 15 per cent on imports but charged lower rates on building
materials.43 Liquor and tobacco were generally subject to higher special

duties. Export taxes also featured heavily in some colonies, like the
Gambia and Gold Coast. The latter imposed an export tax of £1 3s 4d per
ton of cocoa, along with other export duties on timber and diamonds.44
Administrators of inland territories like Northern Rhodesia were aware
at the start of colonial rule that the limited economic activity within their
boundaries could not support an elaborate administrative apparatus, and
coordination between territories in the collection of tariff revenue and
trade data was one way of reducing overall administrative expenditure.
Northern Rhodesia, for example, entered into a series of agreements with
Southern Rhodesia and South Africa for cooperation in the administra-
tion of customs duties. The purpose of these agreements was to facilitate
trade between the three territories by (1) dispensing with the collection of
customs duties at the border upon the removal of imported goods, and
the transference between governments of the duty originally paid, and (2)
maintaining the free interchange of local products and manufactures.45
The administrative coordination stipulated by these agreements was in-
tended both to facilitate trade and to reduce expenditure on the collection
of customs tariffs.
Similar arrangements were in place in East Africa. Prior to the war,
Uganda and Kenya maintained a separate customs administration, though
all imports to Uganda passed through Kenya. According to Pim, during
this period the ‘duty leviable on goods passing through Kenya or Uganda
was assessed on a somewhat arbitrary percentage basis’. From 1917, how-
ever, the two customs services were amalgamated and it was agreed that
Uganda should receive 33 per cent of the revenue from the joint depart-
ment.46 Tanganyika gradually joined this group after World War One. By
1927, a single customs tariff common to the three territories had been
extended to the mandated territory. Customs tariffs were collected once at
the point of entry into East Africa and imported goods were subsequently
allowed to move freely between Kenya, Uganda, and Tanganyika.47 As in
Northern Rhodesia, the burden of administering customs tariffs was
shared between several territories.
Though the counterfactual is difficult to measure, it seems likely that
these arrangements succeeded in reducing administrative expenditure.
43
Nyasaland, Blue Book 1925.
44
Gold Coast, Blue Book 1925.
45
Northern Rhodesia Controller of Customs, ‘Memorandum of the Advantages and
Disadvantages of the Customs Agreements between Northern Rhodesia, Southern Rho-
desia and the Union of South Africa’ (1932), NAZ SEC 1/285.
46
Pim, Report on Kenya, p. 158.
47
Raisman, East Africa, p. 7; Hazlewood, Economic Integration, p. 22.
Pim argued that this was certainly the case for Northern Rhodesia. The
colony’s customs agreements with Southern Rhodesia and South Africa
provided that customs revenue on imports in transit through either of the
two southern colonies would be collected at the point of entry, and the
revenue was transferred annually to Northern Rhodesia. As Pim shows in
his report, revenue collected by South Africa and Southern Rhodesia rep-
resented the bulk of Northern Rhodesia’s customs revenue. Table 3.2
shows the proportion of Northern Rhodesia’s revenue collected by South
Africa and Southern Rhodesia from 1929 to 1936.
The share of customs revenue collected by Northern Rhodesia did in-
crease over time, but even in 1936 Northern Rhodesia’s own collections
were less than the revenue collected by its southern neighbours. Had the
customs agreements not been in place, Northern Rhodesia’s administra-
tive burden (which it already had difficulty supporting) would have been
heavier. It was largely due to these administrative savings that Pim re-
ferred to the customs agreements as ‘the most important feature of cus-
toms policy for Northern Rhodesia’.48
Pim also believed the customs agreements were important in lowering the
cost of living. Low levels of industrialization in most of Africa meant there
were few locally produced substitutes for overseas manufactures. Raising
tariff barriers to such products would therefore simply raise costs, rather than
diverting trade to alternative sources of supply. Pim’s opinion was that it was
difficult to imagine ‘how a policy of customs autonomy could lead to any
other result but a rise in the cost of living . . . Northern Rhodesia is bound
to the south by natural commercial ties, and a system of free exchange of
products, subject to reasonable regulation, must be to the general advantage.
The erection of artificial tariff barriers is a policy to be avoided.’49
The politics of trade taxes would change dramatically during the
‘globalization backlash’ of the inter-war period.50 Tariffs around the world
became less a means of raising funds than a way to protect local producers
from the volatility of the global market. In colonial Africa, however, once
trade taxes were established as an important source of revenue, the extent
to which they could be used to influence trade was severely limited.
Direct taxes
Trade taxes were rarely the sole source of public revenue, even in colonies
where they contributed the largest share. With the notable exception of
48
Pim and Milligan, Report on Northern Rhodesia, p. 102.
49
Ibid., Report on Northern Rhodesia, pp. 107–8.
50
O’Rourke and Williamson, Globalization and History, p. 117.
Table 3.2. Northern Rhodesia customs and excise revenue, 1928–36
S. Africa/S. Rhodesia transfers Collected by N. Rhodesia
1929 £151,629 £70,113

1930 £214,694 £104,784
1931 £227,756 £146,077
1932 £94,097 £108,932
1933 £94,557 £111,935
1934 £136,831 £136,453
1935 £154,636 £140,036
1936 £154,040 £114,587
Source: Pim and Milligan, Report on Northern Rhodesia, p. 272.
the Gold Coast, most colonies imposed some form of direct taxation on
both the indigenous and immigrant populations of their territories.51 The
development of these taxes followed a similar pattern across Africa, as
Lord Hailey observed in 1957: ‘the procedure of taxation is shown to have
been evolved in the majority of territories through a well-marked cycle.
Starting from a hut tax it becomes a poll or capitation tax, usually gradu-
ated according to categories of taxpayers, though only in a few instances
has it yet attained to the final stage of this process.’52 The first hut tax was
imposed in Natal in South Africa in 1849. Of the post-Scramble colonies,
Nyasaland was the first to impose a hut tax of six shillings per year in
1891, followed by the Gambia (four shillings) and Sierra Leone (10 shil-
lings) later in the 1890s. Kenya and the Rhodesias followed in the early
twentieth century.53
As Hailey describes, these taxes were soon supplemented or replaced by
poll taxes collected from adult males regardless of hut ownership. South-
ern Rhodesia introduced a poll tax in 1904. Tanganyika (then under
German rule), Uganda, and Nyasaland also imposed similar taxes.54 The
poll tax was imposed in East Africa in the Native Hut and Poll Tax
Ordinance (no. 2) of 1910 (though in practice it had been collected for
several years).55 Uganda imposed a poll tax in the same year. In Northern
Rhodesia, the poll tax superseded the hut tax in 1914.56
51
Several attempts to introduce direct taxation to the Gold Coast had resulted in vio-
lent African opposition. The reasons for this opposition have been insufficiently explored.
See Shaloff, ‘Income Tax’, p. 360.
52
Lord Hailey, African Survey, p. 676.
53
For more detail, see Gardner, ‘Decentralization and Corruption’, p. 219.
54
Lord Hailey, African Survey, pp. 651–84.
55
56
This shared timeline masks considerable local variation in who was

taxed, and how much. This was due to two key factors, namely the level
of local resistance to taxation and the colonial state’s need to increase its
revenue collections. In West Africa, where trade taxes were more success-
ful and African political mobilization more potent, direct taxes were gen-
erally either non-existent (as in the case of the Gold Coast) or less
important as a revenue source (as in Gambia, Sierra Leone, and Nigeria)
than elsewhere. In East and Central Africa, direct taxes became a vital
source of revenue for the colonial state as well as a persistent source of
political tension. Figures 3.3 and 3.4 show hut and poll tax revenue in
Kenya and Northern Rhodesia in the first decade of its collection, and
illustrate how rapidly the direct taxation of Africans became essential to
the public finances of both colonies.
Tax collection practices also varied. Where indigenous political institu-
tions were exceptionally centralized, such as in Uganda or in Barotseland
in Northern Rhodesia, tax collection was often outsourced to African
rulers, in exchange for a percentage of the revenue.57 Bechuanaland had a
£200,000 30%
£180,000
25%
£160,000
£140,000
20%
£120,000
£100,000 15%
£80,000
10%
£60,000
£40,000
5%
£20,000
£0 0%
1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913
Revenue %
Fig. 3.3. Kenya hut and poll tax revenue (in £ and as % of total revenue)
Source: Gardner, ‘Decentralization and Corruption’, p. 221. Calculated from East Africa Protectorate,
Financial Report 1918–19.
57
In both cases, the right of African rulers to collect taxes in their territories was at times
a matter for debate. For Uganda, see correspondence in UNA A46/2143. For development
of tax policy in Barotseland, see NAZ HC1/2/4.
£80,000 70%
£70,000 60%
£60,000
50%
£50,000
40%
£40,000
30%
£30,000
20%
£20,000
£10,000 10%
£0 0%
1902 1903 1905 1906 1907 1908 1909 1910 1911 1912 1913
Revenue
Fig. 3.4. Northern Rhodesia hut and poll tax revenue (in £ and as % of total
revenue)
Source: Gardner, ‘Decentralization and Corruption’, p. 222. Calculated from British South Africa
Company, Directors Report 1902–13. Revenue returns for 1904 are missing.
similar system in some areas.58 Colonial taxation in such regions became

an extension or adaptation of traditional tribute systems, which presented
particular challenges. Administrators in Northern Nigeria, for example,
could only raise limited revenue through direct taxation despite the highly
centralized Emirates. Newbury writes that ‘limits to local fiscal resources
were imposed by caution in supplanting Muslim methods of exacting
tribute. Nor was it clear just how rapidly the practice of paying tribute in
kind, or using inflating cowries currency could be reformed by the intro-
duction of silver and copper coin.’59
Where tax collection could not be entirely outsourced to African chiefs,
district officers were directly involved in tax collection at the local level,
though collection practices often varied within colonies. In Kenya, for
example, some district officers collected the tax while on routine travel to
different areas under their control.60 In others, tax was delivered by chiefs
who received part of the revenue as a commission.61
58
Makgala, ‘Taxation’, p. 282.
59
Newbury, ‘Accounting for Power’, p. 259.
60
See, for example, Gosha District Diary, January 1924, KNA PC/Jub1/16/6 Vol. 1.
61
The Eldama Ravine Cash Book documents payments of a tax commission of 4.5 per
cent of the payment delivered. See KNA DC/ER/4/2.
Tax burdens also differed substantially between territories. There have

been few attempts to estimate tax burdens in real terms in Africa, and to
compare them across colonies. Davis and Huttenback estimate that tax rev-
enue per capita was substantially lower in the dependent empire than in
self-governing dominions or in Britain itself.62 However, their estimates do
not account for differences in the cost of living. This is partly due to the
limited data on African incomes, an essential ingredient in measuring tax
burdens. Recent research by Frankema uses the wages of unskilled urban
workers to estimate the number of working days needed to produce the per
capita tax revenue (including both indirect and direct tax) in different Afri-
can colonies. He finds that the number of days varies from just over three
in the case of Nigeria and Somaliland to seven in the case of Nyasaland and
Kenya. These are all less than the benchmark of two months’ wages often
used to set the rate of African direct tax (though urban workers were prob-
ably better paid than average).63 They are also substantially less than similar
estimates of the tax burden in Britain and the Dominions, which Frankema
estimates to be 14 for New Zealand and nearly 30 for Britain.64
Caution should be used in interpreting these estimates. They provide a
useful indication of the extent to which tax burdens varied between col-
onies, but they miss less readily measurable but still important sources of
difference. First, it is difficult to know how typical the income of urban la-
bourers was relative to the rest of the population. The burden of a flat tax
would have varied substantially depending on level of income. Second, the
total tax burden was distributed unequally amongst different populations
within the colonies, with those who imported or exported more (often set-
tlers or wealthy exporters) paying a larger share of trade taxes. One estimate
for Kenya claims that in 1926 the European population contributed £41 4s
per capita to the colony’s revenue, while Asians contributed £9 9s.65
In Kenya’s case, trade taxes probably comprised the bulk of revenue
payments by settlers. Settlers also paid direct tax, but the contribution of
this tax to total revenue varied. Southern Rhodesia was perhaps the most
successful in this regard after the introduction of an income tax in 1917.
By the 1920s direct tax on settlers and foreign-owned companies was
contributing a large share of total revenue. Prior to that year, however, no
direct tax was collected from the European populace.66 Northern Rho-
62
Davis and Huttenback, Mammon and the Pursuit of Empire, pp. 221–44.
63
Hanna, Beginnings, p. 242.
64
Frankema, ‘Raising Revenue’, p. 458. Frankema notes that the tax rate is not the same
as the tax burden.
65
Moyne Report, pp. 99–106.
66
Southern Rhodesia, Report of the Commissioner of Taxes 1919; Southern Rhodesia,
Report of the Auditor General 1926.
desia also imposed an income tax in 1921, though this was in practice a
tax on mining companies rather than individuals.67 In Kenya a non-native
poll tax (comprising £1 a year on adult non-African males) was intro-
duced in 1912, but raised comparatively very little revenue. Revenue col-
lections from this source increased at a slower pace than total revenue for
the territory, and in the period 1912–18 never accounted for more than
1 per cent of total revenue, as shown in Figure 3.5. Former Kenya colonial
official Norman Leys was one of the many who felt that this system of
taxation was unfairly regressive and required the poorest taxpayers to fund
the services provided the wealthiest.68 Settlers, however, argued that heav-
ier taxation would make it more difficult to recruit additional settlers,
which they believed was central to the expansion of commercial agricul-
ture and therefore the financial future of the colony.
Further, the burdens of hut and poll taxes collected from Africans were
not necessarily evenly distributed. Colonial governments explicitly au-
thorized officials and their delegates to exempt all or part of the tax for
taxpayers they believed were too poor to pay the full tax.
When the tax was introduced in Northern Rhodesia, administrator
Robert Coryndon believed that exemption from at least part of the tax
would be necessary for its peaceful introduction. In 1903 he wrote to the
Secretary of the BSA Company that ‘I do not propose to adopt any strin-
gent or hard and fast regulation for the first two or three years as to the
amount to be collected from the natives.’ He wanted to avoid any attempt
to collect a tax which was more than Africans were capable of paying or
more than they believed was the value of the services the colonial admin-
istration was providing. He therefore proposed that district officers, ‘while
making it quite plainly understood that the rate of £1 per hut as laid
down in Proclamation No. 18 of 1901 is the tax due and payable’, should
not ‘enforce a payment of say more than 5/- per hut for the first year,
either 7/6 or 10/- for the second year, 16/- for the third and the full
amount of 20/- per hut for the fourth and every subsequent year’.69
Equally, early tax legislation in Kenya provided for a maximum rather
than a mandatory rate; colonial officials could collect less than the maxi-
mum according to local circumstances.70 Such allowances were formal-
ized and continued in later years, but rarely recorded in detail, which
makes measurement of tax burdens difficult.71
67
For more on Northern Rhodesia’s income tax, see Chapter 5.
68
Leys, Last Chance in Kenya, p. 19.
69
Coryndon to Secretary, BSA Company, 9 January 1903, in NAZ HC1/2/7.
70
71
For more on tax exemptions, see Gardner, ‘Decentralization and Corruption’.
£14,000 1.2%
£12,000 1.0%
£10,000
0.8%
£8,000
0.6%
£6,000
0.4%
£4,000
£2,000 0.2%
£0 0.0%
1912 1913 1914 1915 1916 1917 1918
Revenue
Fig. 3.5. Non-native poll tax revenue in Kenya, 1912–18 (in £ and as % of
total)
The use of exemptions was just one way in which the structure of direct
taxes in colonial Africa was shaped by the administrative shortcomings of
colonial states. Direct taxes differ from trade taxes in the administrative
demands they impose. Tariffs on imports and exports could be collected
in the relatively few large trading centres in each colony.72 They involved
very little confrontation with the resident population, as they were col-
lected only from those directly involved in overseas trade. Direct taxation,
on the other hand, requires collection agents to be placed throughout the
area in which tax is to be collected, rather than in just a few trading cen-
tres. Setting an appropriate rate of direct taxation also requires informa-
tion on what taxpayers can afford. In Mungeam’s words, taxation ‘was to
be the real test of effective administration’ in Africa.73
One of the principal challenges of imposing direct taxes is measuring
who and what can be taxed. Margaret Levi emphasizes the importance of
measurement in the structure of taxation, writing that ‘once rulers have
established that they will be extracting revenue from a given population,
measurement capacity determines what kind of property they can tax and
where’.74 Kuczynski’s exhaustive Demographic Survey reveals that few co-
72
Efforts to establish customs houses in more remote areas were often dismissed because
the cost of doing so would be more than the revenue such an establishment would gener-
ate. See, for example, Chief of Customs to Acting Provincial Commissioner Kismayu, 14
July 1915, in KNA PC/Jub1/6/1 on the prospect of opening a customs office at Serenli.
73
Mungeam, British Rule, p. 45.
74
Levi, Of Rule and Revenue, p. 29.
lonial administrations in Africa had accurate population data for their

respective territories until after World War Two, which also meant they
had no way to estimate the number of potential taxpayers.75 African in-
comes were generally based on some combination of subsistence agricul-
ture, the marketing of agricultural produce, or wages from labour on
settler farms or in mines. The contribution of any or all of these varied
widely between individuals and was well beyond the ability of the colo-
nial government to measure. With little knowledge of the incomes of
African taxpayers, colonial administrators had little choice but to impose
flat rates. Colonial officials were aware that flat taxes were regressive, but
assessing taxpayer incomes was well beyond the administrative capacity of
the ‘thin white line’. Flat rate taxes were a compromise which allowed
skeletal administrations to collect a direct tax at all.
However, colonial administrations proceeded with caution in collect-
ing hut taxes. Even a flat tax rate needed to be considered carefully before
it was set. For the tax to be effective, the rate must be set high enough to
produce sufficient revenue to cover the costs of collection, but it must also
be low enough for most taxpayers to pay it. Colonial administrations
struggled to find the right balance in setting tax rates. The market for
agricultural produce was changing rapidly as newly constructed railways
lowered transport costs, and anticipating the impact of these changes on
African incomes proved tricky. Administrators often set rates in anticipa-
tion of future cash income generated by greater opportunities for earning
cash or wage labour. However, their powers of foresight were often lim-
ited, which affected tax collections. Limited opportunities for earning
cash meant early collections were often at least partly in kind.76 Such col-
lections were not reported in the accounts returned to London, which
Newbury describes as ‘makeshift’ in the early years of colonial rule.77
Northern Rhodesia provides a prime example of excessive optimism
with regard to economic expansion, which frequently affected tax collec-
tion. Writing in 1907 to Robert Coryndon, Administrator of Northern
Rhodesia, the Mumbwa District Commissioner noted that ‘when the
10/- tax was first imposed in the Kafue District it was expected that the
opportunities to earn money would yearly increase with the opening up
of the mines’. However, the mineral resources discovered in the territory
were not what administrators had hoped and mining activity actually de-
creased in the district. There was therefore little demand for local labour
and wages were low in proportion to the tax. He further noted that the
75
Kuczynski, Demographic Survey, Vol. 2, chs. 8 (Kenya) and 11 (Northern Rhodesia).
76
Gann, Birth of a Plural Society, p. 83.
77
Newbury, ‘Accounting for Power’, p. 259.
failure of the mining industry to expand also affected agricultural produ-

cers in the district. ‘The natives have been consistently exhorted to in-
crease the area of their gardens and to grow more grain, with a view to an
increased demand consequent on the expected development of the mining
industry. This year the crops have been exceptionally heavy and the na-
tives now hold large stocks of grain for which they can find absolutely no
market.’78
Along the same lines, a report for Mashukulumbwe District docu-
mented that ‘everything has gone smoothly during the collection and the
only cry has been for work to be found for the people to enable them to
pay’. However, the report went on to say that ‘it is evident that the failure
to sell their grain was a great disappointment to the natives and this fact
in addition to the great difficulty of finding work without going to Bula-
wayo, to which place they hesitate to go on account of its, to them, tre-
mendous distance away, has made this year’s tax press rather more hardly
than usual on them and I feel certain that if the £1 tax had been imposed
this year its collection would have been attended with trouble’.79
The prospect of ‘trouble’ related to the collection of the tax, meaning
rebellions by taxpayers, was a constant worry which shaped tax policy for
most of the first decade after the first tax laws were passed. A tax increase
had been one of the causes of the Gun War in Basutoland in 1880.80 The
first attempt to collect a hut tax in Sierra Leone in 1898 led to ‘serious
disturbances in which a number of Creole traders and some European
missionaries were murdered’.81 In 1906 the Bambatha rebellion in Natal
in South Africa emerged from a protest against a poll tax promulgated in
1905 and resulted in the declaration of martial law.82
In the context of existing fears of increasing public expenditure on
imperial expansion, the British government was anxious to avoid any
military entanglements in Africa which might require further outlays.83
This possibility seemed particularly potent after the expense of the Boer
War, which had cost 14 per cent of the national income of 1902 and re-
quired £160 million to be added to the national debt.84 Many of the
grants-in-aid supplied to African colonial governments were needed to
78
District Commissioner, Mumbwa, to Secretary for Native Affairs, 1 August 1907, in
NAZ A3/24/6 Vol. 1.
79
Monthly Report, Mashukulumbwe District in North-Western Rhodesia, 1 Septem-
ber 1907, in NAZ A3/24/6 Vol. 1.
80
81
Ibid., p. 668. See also Chalmers, Report on the Insurrection in Sierra Leone.
82
Burg, World History of Tax Rebellions, pp. 380–2.
83
Anxieties about potential rebellions were exacerbated by limited understanding of African
political and religious movements. See Fields, ‘Political Contingencies of Witchcraft’.
84
support military expenses. It was, for example, largely due to unantici-

pated military expenditure that the early administration of Kenya required
significant grants from the British Parliament.85
The fear that the imposition of direct taxation might provoke a rebel-
lion was one reason for the continuation of the exemptions system. Offi-
cials were particularly anxious that the tax not cause undue hardship,
which might lead taxpayers to resort to violence or revolt which would
upset the fragile order colonial administrations were struggling to main-
tain and require recourse to costly military and police forces to subdue.
A tax revolt might also create negative headlines in London which would
deter those few investors willing to invest in the African colonies.
Such fears contributed to the caution with which the first collections of
the tax were made. The Foreign Office sanctioned the collection of direct
taxes in Nyasaland in 1891 ‘only on the clear understanding that it would
be withdrawn if it gave rise to serious discontent’.86 In December 1902
the Secretary of State for the Colonies wrote to Lord Milner, then the
High Commissioner for South Africa, asking that caution be used in im-
posing direct taxation in North-Western Rhodesia. ‘I trust that you will
not give your sanction to the collection of a hut tax in any way until you
have been satisfied by the reports of the Administrator that the objects of
the tax are clearly understood by the people, that it will be paid without
serious reluctance, and that there is no fear of any disturbance arising in
consequence of it.’87
Tax collection was extended gradually, along with the civil establish-
ment of colonial states. In considering when to extend the tax into new
areas, the administration attempted to assess (1) the ability of the people
to pay the hut tax on account of their proximity to labour-employing
centres, and (2) their geographical position from the point of view of
economical administration.88 In Kenya, the collection of a hut tax was
first mandated by the Hut Tax Regulations of 1901, which authorized a
tax of ‘not more than two rupees per annum’ on ‘all huts used as a dwell-
ing’ to be paid by the occupier.89 In that year the tax was collected only in
parts of the provinces of Seyidie, Tanaland, and Ukamba. This was ex-
tended to Nyanza Province in 1902, and to Jubaland, Naivasha, and
Kenya Provinces in 1903.90 The maximum tax rate was increased to three
rupees within the provinces of Kisumu and Naivasha in 1902. The three
85
86
Hanna, Beginnings, p. 241.
87
Secretary of State to Lord Milner, 13 December 1902, in NAZ HC1/2/4.
88
Ibid.
89
90
McGregor Ross, Kenya from Within, p. 147.
rupee maximum was extended to all huts throughout the territory the
following year.91
As mentioned above, the gradual extension of the tax was seen as cru-
cial to its peaceful acceptance. McGregor Ross, a former colonial official,
estimates that in the first years of the tax the yield shows that less than 5
per cent of the population paid direct tax.92 There was also considerable
variation in the revenue produced by the tax in each province, as shown
in Figure 3.6.
A similar strategy was used in Northern Rhodesia, where, ‘it was not
the intention of the Administration to impose a tax throughout the terri-
tory from this date or that the tax should be collected in full. The scheme
proposed was that the collection should be made first in the more settled
portions of the country and gradually extended as circumstances might
appear advisable.’93
The structure of hut and poll tax, though broadly applicable, did not
suit all regions. In North-Eastern Kenya, for example, Somali groups pre-
£80,000 Nyanza
£70,000 Kenya
£60,000 Seyidie
£50,000
Tanaland
£40,000
Jubaland
£30,000
Ukamba
£20,000
Naivasha
£10,000
Northern
£0 Frontier
01
02
03
04
05
06
07
08
09
10
11
12
13
19
19
19
19
19
19
19
19
19
19
19
19
19
Fig. 3.6. Kenya hut and poll tax revenue by province, 1901–10
Source: Gardner, ‘Decentralization and Corruption’, p. 221. Calculated from East Africa Protectorate,
Financial Report for the Year 1918–19.
91
92
This figure is difficult to verify owing to the administrative weaknesses of the colonial
state. Gardner, ‘Decentralization and Corruption’; McGregor Ross, Kenya from Within,
p. 145.
93
S. Orchard, ‘Memorandum on the Taxation of Natives of North-Western Rhodesia’,
13 September 1907, in NAZ HC1/2/32.
sented particular problems for colonial administrators. They had little

formal political organization, and migrated throughout the year across a
wide swathe of Kenya’s hinterland.94 Since the procedures for collecting
tax used in the rest of the territory would be less effective in this area, an
alternative was devised which entailed collecting a percentage tax on cattle
sales, which were only permitted in certain designated places.95
Though not sanctioned in law, the collection of the commuted stock
tax had the sanction of the central administration, which was willing to
look the other way so long as its objectives were met. Having been noti-
fied of the first collection of this tax the Consul-General of the territory
sent a letter to the Sub-Commissioner stating:
I leave the details of tax-collecting to your discretion but you must remember
that the revenue is subject to a strict audit and that the Auditor will object not
only to any defficiency [sic] out [sic] to any revenue collected irregularly there-
fore, though you may collect the Hut-Tax as you think best, you must be care-
ful to describe it as “Hut-Tax” or “commutation for the Hut-Tax” and not
under any new name.96
The central administration continued to sanction the tax for the next
several decades, though aware that its position under the law was some-
what dubious. When the acting District Commissioner F. W. Isaac of
Lamu wrote the Treasurer in 1910 asking if he had any authority for col-
lecting the tax on cattle sales, the Crown Advocate minuted in response
that ‘unless Mr Isaac can suggest any better method of collecting hut tax
from Somalis I cannot think that the practice approved for so many years
by the officers in charge of Tanaland and Jubaland Provinces should be
discontinued’. He continues by saying that ‘in law Somalis are liable to
pay hut tax. By arrangements between the Somalis and the officers re-
sponsible for the collection of the tax the Somalis make the officers accept
payments on account of hut tax in the manner described.’97 Debate on
the legality of the tax continued within the central administration until
1928, when a group of Somalis from the Northern Frontier Province re-
fused to pay the tax, claiming its collection was illegal. Unable to find any
law under which to enforce payment of the tax, the Crown Counsel re-
fused to take the case, and the tax was abandoned.98
94
95
Capt. J. A. Hamington, Sub-Commissioner, Kismayu, to Sir Charles Eliot, Consul-
General, East Africa Protectorate, 30 December 1903, in KNA AG/39/120.
96
Eliot to Hamington, 1903, in KNA AG/39/120.
97
Acting District Commissioner Lamu to Treasurer, 23 July 1910, and Crown Advocate
to Treasurer, 25 August 1910, in KNA AG/39/120.
98
District Commissioner of Lamu to Central Administration, 23 February 1928;
Crown Counsel to Chief Native Commissioner, 25 February 1928, in KNA AG/39/120.
Other practices developed during the early years of tax collection were
more durable, however. Tax exemptions continued through the rest of the
colonial period, complicating attempts to increase the revenue from the hut
and poll tax. Variations in how important the tax was to revenue, the burden
it imposed, and how it was collected also persisted, often with significant
political implications. The disparity in direct tax contributions by different
communities in Kenya would continue to plague the colonial administra-
tion for decades to come. Nigeria and the other major peasant exporting
colonies continued to rely primarily on trade taxes, only to discover the
hazards of a revenue source directly connected to commodity prices
during the volatile inter-war period.
*****
The limited research published on colonial taxation has done little to
highlight the variety present in colonial tax systems. Historians of colo-
nial Africa have generally approached taxation as a tool used by colonial
governments to compel Africans into the labour force or cash crop pro-
duction.99 There are, however, reasons to doubt that taxation was a very
effective means of compelling Africans into the labour market. Tignor
argues that for the Kamba and Maasai, ‘the tax did not drive them into
the labour market in search of money’, largely because they could often
refuse to pay and District Officers would grant exemptions or agree to
collect arrears the next year. The tax had more influence on the Kikuyu,
but was only one of many factors (including the proliferation of con-
sumer goods, the desire for school fees, etc.) which led the Kikuyu to
undertake paid employment.100 Fearn observes that in Nyanza province
in Kenya, the stimulus to wage labour provided by the tax was limited
largely because the annual sum required was small enough that it could be
discharged in a number of ways, including by in-kind payment or by tax
labour.101 Further, exemptions and tax evasion also served to limit the
coercive effects of the direct tax.
Though they have received the most attention from historians, direct
taxes were also just one of several fiscal tools used by colonial administra-
tions to make ends meet. They were extremely important in East and
Central Africa, but less so in West Africa, where trade taxes dominated the
revenue side of the budget. Trade taxes themselves varied, with export
taxes an important feature in some colonies but less important than
99
See, for example, Anderson and Throup, ‘Agrarian Economy’, p. 15; Dilley, ‘The
Economics of Empire’, p. 113; Young, African Colonial State, pp. 126–8.
100
Tignor, Colonial Transformation of Kenya, pp. 182–5.
101
Fearn, An African Economy, pp. 116–17.
others. Crucially, it was the success of trade taxes which largely dictated
the importance of direct tax and the energy with which it was collected.
The most potent tool in shaping colonial economies, however, was not
taxation at all but public expenditure. Early colonial budgets prioritized
spending that would expand the revenue base of the colony, particularly
through investment in infrastructure. Such spending was designed to fa-
cilitate the rapid development of cash crop production, either by African
smallholders or foreign-owned commercial farms and plantations. Such
export-led growth was considered the fastest way of building a taxable
surplus in the colonies. In the inter-war period, this economic structure
would leave both colonial administrations and those they governed vul-
nerable to changing global prices.
This, then, was the skeleton of the early colonial state. Perhaps the best
way to understand a system is to view it in a crisis. It was the fiscal crisis
of World War One which inspired a new look at Europe’s fiscal systems
and prompted Goldschied to pen his famous description of government
budgets.102 Equally, the turbulence of the inter-war period would inspire
similar soul-searching by policy-makers in the colonies, who sought to
adjust the fiscal institutions they had built to the new economic world in
which they found themselves.
102
Schumpeter, ‘Crisis of the Tax State’, pp. 5–6.
PA RT I I
CRISIS MANAGEMENT IN
COLONIAL PUBLIC FINANCE,
19141938
4
From Complement to Conflict: Trade
Taxes, 1914–1938
By the outbreak of World War One, the fiscal systems of individual

colonies had developed along diverse paths with regard to the sources of
their revenue and allocations of expenditure. However, they all shared a
critical common trait, namely a dependence on the export industries of
their respective territories. When commodity prices were rising, the cash
incomes of taxpayers increased, allowing them to purchase a wider range
of imports and making it easier to pay direct tax. Increasing revenue col-
lections allowed the colonial governments to spend more, expanding both
the administrative establishment and the infrastructure of their respective
colonies. Declining prices for colonial exports threatened every aspect of
this system, but none more so than the revenue from trade taxes.
In the period up to 1914, Davis and Huttenback note that ‘the most
striking feature of the tax history of the dependent colonies is the reliance
on tariffs’.1 Trade taxes remained a key component of colonial fiscal sys-
tems in the inter-war period. As elsewhere, however, their relationship to
colonial budgets was soon complicated by the tumultuous events of war
and depression. The horrors of World War One and the economic dislo-
cations that followed made restoring the pre-1914 world of open door
tariffs and expanding trade impossible.2 As a result, the framers of fiscal
policy in the colonies found themselves struggling to redefine the role of
their territories in a new post-war world.
By the 1920s trade taxes contributed at least a quarter of total colonial
revenue, and often substantially more. Before the outbreak of war in
1914, tariffs had seemed like an ideal tax base for colonial states. Their
assessment was relatively simple, and they could be collected from a
limited number of trading centres. In a period of rising commodity prices
and expanding international trade, they promised a growing source of
1
2
For more on the trade disruptions caused by World War One, see Findlay and
O’Rourke, Power and Plenty, pp. 429–43.
64 Crisis Management in Colonial Public Finance
Table 4.1. Average contribution of trade taxes, 1925–29 (1913 prices)
Total revenue Customs revenue Percentage of total
Gambia £127,950 £81,160 63

Sierra Leone £455,964 £289,155 63
Gold Coast £2,221,226 £1,464,274 66
Nigeria £3,834,141 £1,883,744 49
S. Rhodesia £1,209,686 £349,230 29
N. Rhodesia £276,990 £79,307 29
Kenya £1,591,504 £459,503 29
Uganda £821,741 £239,034 29
Nyasaland £196,888 £52,717 27
Source: Board of Trade, Statistical Abstract 1924–30; deflated using data from Feinstein, Statistical Tables
of National Income, Table 61.
revenue for newly self-sufficient colonial administrations. Table 4.1 shows

total customs revenue for African colonies in the late 1920s.
Unfortunately, the outbreak of war and the two decades of economic
instability that followed its end made it painfully apparent to colonial
administrators that trade taxes were a shaky foundation on which to build
colonial rule. Revenue from trade taxes was generally assessed as a per-
centage of the value of international trade. When the value of this trade
decreased, either through declining global prices or changing consump-
tion patterns, so did tariff revenue. In 1925 Kenya’s new governor, Sir
Edward Grigg, sounded a note of warning in his first speech to the Col-
ony’s Legislative Council, noting that ‘the Colony’s revenue system de-
pends to a very large degree on Customs revenue. This is necessarily an
uncertain form of revenue. It is liable to fluctuate seriously, not only with
the prosperity of the Colony itself, but with world-wide factors entirely
beyond our control.’3 These fluctuations in revenue made planning future
public spending in the colonies exceedingly uncertain, even while colo-
nial administrations were becoming increasingly involved in managing
the economies they governed.
Raising revenue is not the only purpose of customs tariffs. Protective
tariffs can encourage local industries by making imported goods more
expensive, while preferential tariffs can encourage trade with some coun-
tries at the expense of others. The use of tariffs as an instrument of com-
mercial policy became increasingly common around the world during the
3
Speech to the Legislative Council, 28 October 1925, published in Kenya Legislative
Council, Speeches of Edward Grigg.
From Complement to Conflict: Trade Taxes 65
inter-war period, often dubbed a period of ‘deglobalization’. While po-

tentially stimulating economic development in the long run, the strategic
use of tariffs in this way generally results in some loss of overall tariff rev-
enue.4 Colonial administrations had to decide between using tariffs to
assist local producers, whose livelihoods were also threatened by changing
commodity prices, and maintaining their own fiscal position. Growing
unrest in the colonies through the 1920s and 1930s made this choice in-
creasingly difficult. This conflict was found not only in tariff policy, but
also in other government interventions in the market. Marketing con-
trols, introduced as a means of stabilizing the prices offered to producers,
could also be used to raise revenue. As in the case of tariffs, colonial ad-
ministrators struggled over whether to prioritize the fiscal health of their
territories or the support of local producers.
To complicate matters further, they also needed to choose between the
local needs of the colonies they governed and those of the metropole. With
the domestic economy weakened by war and struggling with persistent un-
employment, the British government hoped that increased economic integra-
tion with its Empire would help mitigate the effects of the global downturn.
This was the motivation for the 1929 Colonial Development Act, which
provided limited funding for infrastructure projects in the colonies in the
hope of increasing colonial demand for British manufactures.5 Preferential
tariffs were another such measure, along with import quotas and restrictions
on colonial government purchasing. The effect of these policies in the colo-
nies was often to raise prices for colonial administrations and consumers alike.
As a result, colonial administrations struggled to balance pressure from
London with the local needs of both their constituents and their budgets.
In this period, colonial tariff policy became much more than just a
means of raising revenue with limited administrative capacity. Instead, it
exemplified wider debates about the relationship of African colonies with
the global economy, and the role of colonial administrations as mediators
between colonial producers and global economic conditions. The out-
come of these debates, expressed in the form of often contradictory and
ineffective policies, reflected the struggle to balance the interests of differ-
ent stakeholders. Munro describes the divergence in imperial and colonial
priorities as a ‘clash of interests on a grand scale—between different colo-
4
There remain fierce debates in economics on whether free trade or protectionism is a
better policy for the developing world. See, for example, Chang, Kicking Away the Ladder,
ch. 2; Collier, Bottom Billion, ch. 2.
5
Abbott, ‘Re-examination of the 1929 Colonial Development Act’; Constantine, Brit-
ish Colonial Development Policy, ch. 7. Morgan, Official History of Colonial Development
Volume 1, p. 46. Colonial development spending will be examined in greater detail in
chapter six of this volume.
nial and metropolitan governments, between the various producers of the

same commodity or types of commodity, between producers and mer-
chants—in which there were “losers” as well as “gainers”’.6 Fiscal policy
was the central arena in which this battle was fought.
COLONIAL ECONOMIES IN CRISIS, 191438
The early years of colonial rule were a transformative period in Africa’s

economic and political history. Railways and roads built by colonial gov-
ernments made the transport of many commodities from the interior
profitable for the first time. Declining transport costs, along with rising
commodity prices, marked the beginning of Africa’s ‘cash crop revolution’
and accelerated the continent’s integration into the global economy.7 The
scale of this change should not be overstated; colonial infrastructure had
limited scope and most Africans remained engaged primarily in subsist-
ence farming.8 But for those within reach of the newly constructed rail-
ways and expanding colonial administrations, colonial rule created a
brave new world with both new opportunities and hazards.
Colonial fiscal systems reflected these changes. By 1914 most colonial
states were able to support themselves using local revenue, without rely-
ing on subsidies from Britain. The expanding export of cash crops and
minerals was the foundation of their financial self-sufficiency. New re-
sources meant new expenditure, and colonial budgets expanded rapidly.
Freed from the constraints of Treasury control, which had dictated that
large proportions of colonial spending be devoted to reducing the grant-
in-aid, colonial states were extending their early investment in railways,
ports, and roads to include other services designed to promote the expan-
sion of export production or mining.
Within this context, colonial administrators were very certain about
their role in the global economy. In 1919, members of Kenya’s economic
commission optimistically outlined the economic future they saw for
their colony as a primary producer serving the needs of industrial
England:
Rich with possibilities of primary development beyond computation, East
Africa’s real significance to England lies in the fact that all its economic
6
Munro, Africa and the International Economy, p. 157.
7
An excellent summary of the growth of export industries can be found in Havinden
and Meredith, Colonialism and Development, ch. 5. For a critical review of the vast histor-
ical literature on the cash crop revolution, see Tosh, ‘Cash-Crop Revolution’.
8
Hopkins observes that direct involvement with export production in West Africa was
limited to a relatively small area. Hopkins, Economic History of West Africa, pp. 178–9.
functions are complimental [sic] of and not competitive with those of England;
and East Africa’s real significance to the Empire lies in the fact that many of its
own products such as sisal, flax, coffee and cotton are products, for a supply of
which the Empire to-day depends mainly upon foreign sources; while other of
East Africa’s products such as maize, barley, hides and bacon are supplementary
to a present imperial production insufficient for imperial needs.9
Other colonies were similarly minded. Across British colonial Africa, ad-
ministrators focused on expanding the production of the primary com-
modities, whether cash crops or minerals, in which they had a comparative
advantage in the global market.10 In West Africa, cocoa and groundnuts
were rapidly becoming the region’s most important exports. Cocoa pro-
duction in the Gold Coast rose from 500 tons exported in 1900 to just
over 50,000 in 1913. By 1930 cocoa represented nearly 62 per cent of the
Gold Coast’s total exports. Groundnut exports increased at a similar rate,
from 790 tons in 1905 to just over 19,000 eight years later. This rapid
growth in export production allowed the colonial governments of both
territories to expand. Total public revenue in the Gold Coast more than
doubled between 1904 and 1913, while in Nigeria total expenditure in-
creased more than four-fold over the same period.11
Havinden and Meredith argue that increasing demand for colonial
produce led colonial officials to focus energy and resources on a small
number of key export industries. Administrators were keenly aware that
transport costs as well as other factors meant that their possibilities for
profitable export production were limited to just a few products. The
growing dependence of almost all British colonies on a narrow range of
export commodities made them increasingly vulnerable to changing
demand and prices.12 In drawing this conclusion they have the benefit
of hindsight. The ‘great specialization’ of the nineteenth century had
divided the world into producers of manufactures on the one hand and
raw materials on the other.13 To many contemporaries, this was a posi-
tive development: division of labour on a grand scale making the world’s
economy more productive.14 This was true of producers as well as
9
East Africa Protectorate, Economic Commission, p. 4.
10
See, for example, Northern Rhodesia Treasurer to Chief Secretary, 11 March 1932, in
NAZ SEC1/331.
11
Havinden and Meredith, Colonialism and Development, pp. 99–104. For trade statis-
tics see also Colonial Office, Financial and Trade Statistics, in TNA CO 885/34/5.
12
Havinden and Meredith, Colonialism and Development, pp. 152–3.
13
For more detail on the ‘great specialization’, see Findlay and O’Rourke, Power and
Plenty, ch. 7 and Yates, Forty Years of Foreign Trade, ch. 3.
14
The classic description of the division of labour is Adam Smith’s ‘pin factory’: see
Smith, Wealth of Nations, Book I, chs. 1–2. The great specialization applied this on a na-
tional rather than individual level.
colonial administrators; Rimmer argues that the contribution to the

growth of the export trade made by coercive measures or tax collection
was small ‘relative to the contribution made by the voluntary response
of Africans to new opportunities for improving the material condition
of their lives’.15
This heady optimism would largely disappear with the outbreak of
World War One. The trade disruptions of the war, and the economic
crises which followed, turned the economic tables against many African
colonies, revealing how precarious their new-found financial stability
really was.16 A sudden fall in export prices meant not only the loss of vital
revenue from customs tariffs, but also declining incomes for producers.
Many wage labourers were made redundant, leading to colonial Africa’s
first experience of unemployment. This not only made raising revenue
increasingly difficult, but also created social and political tensions.
Some historians have argued that the economic crises of the inter-war
period had a limited impact on Africa, which relative to other regions was
only newly and incompletely integrated into the global economy. Latham,
for example, claims that in much of the developing world, only the export
sector suffered significant setbacks from the Depression. He writes that ‘as
peasant food production remained the basis of the economy in most
countries, the people were not too badly affected’.17
In contrast, however, Hopkins argues that the ‘buffer capacity’ of Afri-
cans, or the extent to which they could retreat into the subsistence sector,
has often been exaggerated. The argument that Africans could ‘absorb the
effects of a slump in the export sector’ by moving to subsistence produc-
tion ignores the degree of specialization in the African economy. Special-
ized groups, he argues, ‘could revert to self-sufficiency only by restructuring
their economic activities and by taking a substantial cut in their living
standards’.18 Further, he argues, the performance of the domestic economy
in West Africa was largely dependent on the fortunes of the export sector.19
Austin’s study of the growing cocoa industry supports this conclusion, de-
tailing how economic relationships in Asante changed by bringing an ever-
widening group of people into credit and commercial networks from
which it was difficult to extricate themselves.20 This was also true in East
and Central Africa. Farmers in Northern Rhodesia depended on the
mining sector for their main market, and suffered greatly from the collapse
15
Rimmer, ‘Economic Imprint of Colonialism’, p. 142.
16
Munro, Africa and the International Economy, pp. 119–22.
17
Latham, The Depression and the Developing World, p. 175.
18
19
Ibid., p. 253.
20
Austin, Land, Labour and Capital. See especially chapters 15 and 18 on credit.
in copper prices as a result.21 Equally, the fortunes of agricultural producers

in Kenya were tied largely to the success of coffee and sisal plantations,
which produced 51 per cent of Kenya’s domestic exports in the late 1920s
and which Wrigley describes as ‘the real foundation of the country’s econ-
omy’.22 The effects of declining export prices were more widespread than
Latham claims.
Contemporary observations of the impacts of the inter-war economic
crises concur, while also noting that the effects of the crisis varied between
colonies. Gerald Clauson, head of the Colonial Office’s Economic De-
partment, claimed in 1937 that colonies where export production was
dominated by smallholders would suffer greater effects from global down-
turns than those where exports were produced primarily by plantations or
mining companies. The reason for this difference is that while corpora-
tions and plantation owners might make economies during periods of low
prices, the ‘amplitude of the fluctuation in local costs is usually much less
than the amplitude of the fluctuation in prices’.23 High levels of redun-
dancy and severely reduced wages in mining and plantation economies
call this proposition into question. However, Clauson’s work does sup-
port the claim that the availability of subsistence agriculture did not
necessarily minimize the effects of a global downturn on African peasant
producers.
The impact on producers was compounded by the boom and bust pat-
tern of commodity prices during the 1920s and 1930s. Cocoa production
in the Gold Coast provides a key example. After falling sharply at the end
of the war, the cocoa price rose rapidly to unprecedented heights in 1919
and 1920. Rising prices enticed a range of people, both African and
European, into the cocoa trade. However, as cocoa trees take several years
to mature, many found that prices had fallen again by the time they had
produced a marketable product. The continued volatility in export prices
made decisions about how much to invest in cocoa particularly difficult
(see Figure 4.1). After the boom ended in 1921, the Governor observed
that ‘a large number of Gold Coast people had lost their heads. Members
of the Professions, Clerks, Artisans, practically deserted their work and
took part in the great cocoa rush. It was impossible to get labour.’
When the price fell,
Hundreds of individuals and new firms were ruined and only the older firms
with sufficient capital to support them survived. There can be no doubt that
21
Macdonald, ‘Economics of the Cattle Industry’, published in Sunderland, Economic
Development of Africa, Vol. 2; Roberts, History of Zambia, p. 190; Vickery, ‘Saving Settlers’,
p. 216.
22
23
Clauson, ‘Some Uses of Statistics in Colonial Administration’, pp. 10–13.
250
200
150
100
50
0
1910
1911
1912
1913
1914
1915
1916
1917
1919
1920
1921
1922
1923
1924
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1918
1925
Fig. 4.1. Export price of cocoa, 1910–37 (1937 = 100)

Source: Kay, Political Economy, Table 21c.
there are natives in this country who did well and permanently increased
their wealth out of the great cocoa boom. But as in the case of other booms
all the world over, for every one who succeeded there were a hundred
failures.24
The volatility of export prices during this period exacerbated already
growing inequality amongst export producers.25 Larger farms and trading
companies were more likely to survive downturns than small ones. Ex-
patriate firms enjoyed a particular advantage, which contributed to Afri-
can discontent during the period.26
Similar trends can be observed in more mixed colonial economies. By
the 1920s the Kenyan economy was comprised of a combination of farms
(both African and European) and foreign-owned plantations.27 After ini-
tially struggling to find a suitable export crop, European farms were rap-
idly increasing production during this period. Maize had become their
staple crop, and production rose from 339,000 200-lb bags in 1922 to
1,089,000 bags in 1928.28
24
Governor’s Annual Address, Gold Coast Legislative Council Debates, 1921–22,
printed in Kay and Hymer, Political Economy, pp. 48–9.
25
Hopkins, Economic History of West Africa, pp. 239–41.
26
Ibid., pp. 258–9.
27
The difference between plantation owners and ‘genuine’ settlers is articulated in
Speller, European Agriculture.
28
Though both plantations and settler farms struggled through the inter-
war period, European settlers were the worst affected. Heavy investment
in expanding maize production, often made with borrowed funds, had
left them extremely vulnerable to changes in the export price.29 When the
price of maize fell, European farmers could not reduce their costs of pro-
duction in proportion to the decline in prices, and therefore had to sell
their produce at a loss. Mosley notes that ‘this was widely perceived to be
a situation critical for the survival of the entire settler community’, and in
consequence for those colonies which had banked on European settle-
ment as their primary means of development.30
The economic struggles of the settlers had both immediate and long-
running fiscal impacts on the colonial state. Their reduced consumption
of imports led to declining per capita contributions to the revenue, from
£41 4s in 1926 to £28 19s in 1931.31 The incomes of the African labour-
ers also fell, as wages were cut and workers made redundant.32 The colo-
nial administration tried to make up the difference by promoting African
production of maize for export, but the energy and resources devoted to
this scheme were insufficient to make it work and by 1938 African pro-
ducers still only contributed 13 per cent of exports by value.33 Settlers
turned to the colonial state to support their development, which had a
persistent influence on both the tax structure and allocation of public
spending.
Northern Rhodesia by the late 1920s more closely exemplified Clau-
son’s description of a colonial economy dominated by multinational cor-
porations, as the colony’s large copper mines began production. The rapid
expansion of this industry initially shielded the colony from the onset of
the Great Depression. The value of the colony’s exports increased from
£400,000 in 1924 to £3,582,000 in 1933.34 However, the sharp decline
in copper prices from 1931 revealed the dangers to both government rev-
enue and private income of depending on the fortunes of a single com-
modity.35 Figure 4.2 shows the prices of copper on the London Metal
Exchange during the inter-war period, providing another example of the
volatility with which colonial administrations had to cope. Sir Alan Pim
observed later that the Northern Rhodesian administration had not
29
Van Zwanenberg, Colonial Capitalism, pp. 7–8.
30
Mosley, Settler Economies, p. 43.
31
Walter, ‘Memorandum on Contributions to Revenue’, pp. 99–106.
32
Tignor, Colonial Transformation of Kenya, p. 189.
33
Kitching, Class and Economic Change, pp. 59–62. See also Anderson and Throup,
‘Agrarian Economy’.
34
Board of Trade, Statistical Abstract 1924–33, p. 134.
35
For more on the mixed impact of copper mining on Northern Rhodesia’s economy,
see Roberts, History of Zambia, pp. 190–4.
£120
£100
£80
£60
£40
£20
£0
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
Highest Lowest
Fig. 4.2. Copper prices on the London Metal Exchange

Source: Banks, The World Copper Market, pp. 12–13.
realized that its increased income during the late 1920s ‘depended mainly
on temporary capital expenditure. The end of the construction period of
the mines in 1931 coincided with a slump the copper market, and, as a
result, the revenue fell by 25 per cent and a large deficit compelled severe
retrenchment in all directions and an increase in taxation.’36 This is perhaps
unjust; the annual report of the Northern Rhodesia Customs department
for 1931 noted that the imports of large capital goods which had comprised
a large proportion of the colony’s imports could not be expected to con-
tinue in the future.37
However, it is safe to say that the colonial administration of Northern
Rhodesia was unprepared for the scale of the crisis. As existing mines
closed and new mine construction stopped, thousands of mineworkers
were left unemployed while the colonial administration struggled to make
ends meet.38 Further, the closure of the mines meant a dramatic decline in
demand for locally produced maize and beef, leaving agricultural produ-
cers virtually without a market. Maize prices in the colony fell from 12
shillings per bag in the late 1920s to six shillings in 1932.39 The Northern
Rhodesian case demonstrates that even in colonial economies dominated
36
Pim, Financial and Economic History, p. 190.
37
Northern Rhodesia, Annual Trade Report for 1931, p. 4.
38
Robinson, ‘The Economic Problem’, pp. 143–5, 175–7; Northern Rhodesia, Report
of the Unemployment Committee; Thompson and Woodruff, Economic Development, p. 14.
39
Vickery, ‘Saving Settlers’, p. 216.
by large multinational corporations the economic crises of the inter-war

years could still have a dramatic effect on local incomes.
British colonies in Africa were by no means unique in suffering from
rapid shifts in global prices. The two decades between the end of World
War One and the start of World War Two were periods of economic
difficulty around the world. In his survey of the period, Lewis notes that
‘in all these 21 years [between 1918 and 1939] there were not more
than five, the five which ended the twenties, that men felt to be years of
normal prosperity’.40 But the crises which struck in 1921 and 1929 af-
fected countries and regions differently depending on the nature of their
engagement with the international economy. Latham argues developing
countries may have suffered less from the Depression than developed
countries owing to their more limited integration with the global
market. McElvaine, for example, claims that the impact of the Great
Depression of the 1930s on the US was greater than that of previous
downturns in the nineteenth century because the economy was far more
integrated, with a larger proportion of the population dependent on
market forces for survival.41 However, according to Munro, ‘primary
producing economies suffered most acutely from these reverses in world
commerce. . . . The export-oriented economies of Sub-Saharan Africa
could not be sheltered from these forces, and with the collapse of world
markets the expansion of African external exchange came to an abrupt
end.’42 The fiscal weakness of colonial states exacerbated these effects,
preventing them from using many of the tools adopted in the United
States and elsewhere to protect local producers from the volatility char-
acteristic of this period.
MANAGING THE CRISIS: COLONIAL FISCAL

POLICY
The economic consequences of commodity price volatility have remained

an ongoing struggle for primary producers from the inter-war period
until the present day.43 An important part of this problem is the impact of
commodity price changes on the public finances of countries with only a
40
Lewis, Economic Survey, p. 12.
41
McElvaine, Great Depression, pp. 15–16.
42
Munro, Africa and the International Economy, p. 150.
43
See, for example, Blattman et al., ‘Winners and Losers’; Bleaney and Greenaway,
‘Impact of Terms of Trade and Real Exchange Volatility’; Deaton, ‘Commodity Prices and
Growth in Africa’; Kose and Reizman, ‘Trade Shocks’; Ramey and Ramey, ‘Volatility and
Growth’; and Rodrik, ‘Where Did All the Growth Go?’
few major exports.44 Drawing on Egypt’s experience in the nineteenth

century, Deaton composes a parable, about a ruler of a country whose
sole export (in this case cotton) triples in price.
[He] spent his newfound riches on “fantastic extravagance” while “immense
sums were expended on public works after the manner of the East, and on
productive works carried out in the wrong way or too soon.” Not even the
threefold increase in prices could support these expenditures, and the coun-
try soon found itself deeply in debt.45
In Egypt’s case, its inability to pay this debt resulted in colonization by
Britain. As Deaton notes, however, its experience is comparable to
most African countries during both the colonial and post-independ-
ence periods. For many African colonies, new spending commitments
made during the prosperous 1920s became impossible to sustain in the
1930s.
This increased spending was possible thanks to the increased autonomy
gained by colonial administrations over their own budgets by achieving
financial self-sufficiency. Colonial administrations were anxious to keep
this new-found budgetary discretion, and could also be less certain that a
struggling metropolitan government would be able to bail them out. A
1932 Colonial Office report on the financial position and trade of the
colonies observed that though significant shortfalls were anticipated in
colonial budgets, ‘it is understood that no assistance from Imperial funds
can be looked for’.46
Colonial public finance in the inter-war years might be characterized as
an exercise in crisis management; colonial treasurers struggled to make
their budgets balance even while revenue collections varied widely and
outbreaks of unrest amongst beleaguered producers created new demands
for public spending. The major problem for colonial governments was
not persistently low revenue—revenue in the colonies increased substan-
tially in real terms between the wars—but rather volatility in revenue
collections (see Figure 4.3). Driven by rapid changes in the global prices
for their exports, this volatility made planning for future spending needs
extremely difficult.
This uncertainty was particularly hard-felt during the 1930s, after the
general prosperity during the late 1920s had led colonial administrations
to briefly resume the fiscal expansion of the years immediately preceding
44
One finding in the above literature is that fluctuations in government expenditure are
significantly related to volatility, and that volatility is negatively correlated with economic
growth. See Ramey and Ramey, ‘Volatility and Growth’, p. 16.
45
Deaton, ‘Commodity Prices and Growth in Africa’, pp. 23–4.
46
Colonial Office, Financial and Trade Statistics, p. 15.
a. Total public revenue (constant 1913£)
6000000
5000000
4000000 Nigeria
Gold Coast
S. Rhodesia
3000000 N. Rhodesia
Kenya
Uganda
2000000 Nyasaland
1000000
0
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
b. Index of public revenue (in constant prices, 1918=100)
700
600
500 Nigeria
Gold Coast
400 S. Rhodesia
N. Rhodesia
300 Kenya
Uganda
200 Nyasaland
100
0
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
Fig. 4.3. Revenue in selected British colonies in Africa, 1918–37

Source: Calculated from Board of Trade, Statistical Abstract 1909–23, 1924–33, 1928–37; Feinstein,
Statistical Tables of National Income, Table 61.
the war (see Figure 4.4). In Kenya, for example, the colonial administra-
tion built 1,000 miles of new railway lines between 1921 and 1933, and
expanded the deep-water facilities at the port of Mombasa.47 These invest-
ments nearly doubled the colony’s outstanding debt, from £8,500,000 in
1924 to £16,900,000 in 1930. This represented one of the largest in-
creases in outstanding public debt in British Africa, though other colonies
also increased their debt burdens. In the Gold Coast, for example, public
47
Anderson and Throup, ‘Agrarian Economy’, p. 11.
a. Public Spending (constant 1913£)
4500000
4000000
3500000
3000000 Nigeria
Gold Coast
2500000
S. Rhodesia
2000000 N. Rhodesia
Kenya
1500000 Uganda
Nyasaland
1000000
500000
0
1918
1919
1920
1921
1930
1922
1923
1924
1925
1926
1927
1928
1929
1931
1932
1933
1934
1935
1936
1937
b. Index of Public Spending (in constant prices, 1918=100)
600
500 Nigeria
Gold Coast
S. Rhodesia
400 N. Rhodesia
Kenya
300 Uganda
Nyasaland
200
100
0
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
Fig. 4.4. Public spending in selected British colonies in Africa, 1918–37

Source: Calculated from Board of Trade, Statistical Abstracts; Feinstein, Statistical Tables of National
Income, Table 61.
debt increased from £7,300,000 in 1924 to £12,900,000 six years later.

Nigeria’s debt rose from £19,900,000 to £28,300,000.48 Northern Rho-
desia was only released from Treasury control in 1931 after achieving its
first surplus in 1928/9. However, the rosy financial outlook of the late
1920s had led to an increase in the size of the colonial administration.
Between 1925 and 1932 the total number of European staff employed by
48
Board of Trade, Statistical Abstract 1924–30, p. 15.
the colonial administration more than doubled, from 321 to 770.49 Fur-
ther, with the economic future of the territory firmly linked to copper
mining, the colonial administration had committed to moving the ad-
ministrative capital of the colony from Livingstone to Lusaka in order to
be closer to the copper mines under construction in the north. Even after
the crash of 1929, Governor Maxwell pushed ahead with construction in
the new capital under the belief that Northern Rhodesia would escape the
Great Depression due to the rapid expansion of mining.50
With the onset of the Great Depression and another sharp fall in rev-
enue, spending was cut dramatically in an effort to maintain balanced
budgets. Public services were scaled back to a minimum. However, it
became clear that such cuts were equally unsustainable from a political
perspective, as falling living standards and outbreaks of unrest threatened
the stability of the Empire. Striking a balance between fiscal solvency and
political stability was the major challenge for colonial treasurers through
the inter-war period and beyond. The fiscal importance of trade taxes,
combined with the increasing politicization of trade policy around the
world, made the debates surrounding the structure of colonial tariffs par-
ticularly fierce.
C O L O N I A L T R A D E P O L I C Y, 1 9 1 8  3 8
As economic conditions became less predictable from 1914 onwards,

colonial governments sought ways to insulate both themselves and local
producers from volatility in global markets. Like the governments of in-
dependent countries around the world, they used tariffs and other instru-
ments of commercial policy to protect local producers and build local
industries. However, the dependence of colonial governments on tariff
revenue and the need to maintain self-sufficiency limited the extent to
which tariffs could be used for protectionist (as opposed to revenue-rais-
ing purposes).
The changing attitude of colonial producers regarding their role in the
global economy is best exemplified by the conclusions of the Bowring
Committee report in Kenya, published in 1922, which differs radically
from the 1919 report of the Economic Commission, quoted above. The
1919 report enthusiastically embraced Kenya’s role as the producer of raw
materials to be processed elsewhere. In contrast, just three years later, the
Bowring Committee emphasized that the economy of the territory could
49
Northern Rhodesia, Report of the Finance Commission, pp. 4–8.
50
Gann, History of Northern Rhodesia, p. 260.
only be improved by supporting local industry, making greater use of the

colony’s own resources and providing greater opportunities for invest-
ment of foreign capital. The committee offered particular support for the
imposition of higher import duties on commodities which could be pro-
duced locally and on wines, spirits, and tobacco. The creation of import
substitutes, it believed, would eventually lead to increased demand in
overseas markets for Kenya’s products.51
This response to the volatility in commodity prices was replicated
around the world during the inter-war period. The trade restrictions im-
posed by many European countries during World War One never entirely
disappeared, and new tariffs were introduced in the decades that followed.
This was true not only of European countries. On the recommendation
of the 1922 Indian Fiscal Commission, ‘explicitly protective tariffs’ were
introduced for sugar, textiles, iron, and steel. The average tariff on manu-
factured goods in India rose from 4 per cent in 1913 to 16 per cent in
1925. In the United States, the Smoot-Hawley Tariff adopted in 1930
increased rates of protection substantially, and triggered a wave of retalia-
tory tariff increases around the world.52 Kenya and other African colonies
were merely bit players in a larger process of deglobalization taking place
across the world.
The various attempts to reduce tariffs through international agreements
were largely unsuccessful.53 In fact, the recommendation of the Bowring
Committee that Kenya adopt protective tariffs was facilitated by the re-ne-
gotiation of the Berlin Act after World War One. When it was first signed
in 1885, the agreement had been central to keeping the newly founded
African colonies open to global trade. In 1919, the Convention of St Ger-
main-en-Laye superseded an 1890 agreement revising the original Act,
which had mandated a maximum tariff rate of 10 per cent. In a sign of the
times, the Convention lifted the 10 per cent ceiling on tariffs. It also re-
stricted the beneficiaries to nationals of the signatories (including the Brit-
ish Empire, the USA, Belgium, France, Italy, Japan, and Portugal, though
Italy and the US never ratified the Convention) and members of the League
of Nations. Finally, it allowed states within the Congo Basin to grant con-
cessions ‘for the development of the national resources of the territory’.54
51
Kenya, Economic and Financial Committee Proceedings during 1922, pp. 4–5.
52
For more detail on global tariffs in this period, see Findlay and O’Rourke, Power and
Plenty, pp. 443–55.
53
Kindleberger, World in Depression, p. 61.
54
U.S. Office of Strategic Services, Trade Policies, pp. 2–3. See also Sandeman Allen,
‘Memorandum on the Congo Basin Treaties for the Empire Parliamentary Association’, in
NAZ SEC1/289.
This greater freedom in setting tariffs first led to proposals in 1921 to

raise duties on luxury articles to make up for the revenue shortfall caused
by decreasing commodity prices and the refusal of European settlers to
pay income tax.55 The 1921 tariff imposed duties of 30 per cent on ale,
beer, wine, tobacco, cigars, cigarettes, cigarette paper, playing cards,
gramophones and records, pianos, pianolas and records, jewellery, per-
fumery, silk and silk manufactures. Crucially from the settlers’ perspec-
tive, it also imposed a 15 per cent duty on rice, wheat, wheat flour, and
sugar: all products which could be produced locally if they did not have
to face competition from imports.56 A 1922 ordinance increased the
duties on alcohol and tobacco (tobacco to 90 per cent and wine to 60 per
cent) and imposed new duties on ghee, butter, and cheese. It also imposed
a high duty of 50 per cent on imported timber.57
These duties were rejected by the Colonial Office because they violated
the customs agreements with Uganda. This rejection led to an inter-terri-
torial Customs Conference in 1922, after which the Customs Tariff of
1923 was introduced and applied in both Kenya and Uganda. In 1927 it
was also extended to Tanganyika.58 The 1923 tariff imposed specific duties
on luxury goods such as alcohol and tobacco as well as foodstuffs which
could be produced in the colony (particularly grain and dairy products
but also bacon and ham). Other luxuries such as jewellery and perfume
were taxed at 30 per cent. Machinery and tools were given a lower rate of
10 per cent or duty free. The rate for non-enumerated goods increased to
20 per cent.59
According to Sir Alan Pim’s 1936 report on Kenya’s finances, the tariff
of 1923 was ‘directed to the fostering of industries believed to be suited to
the Colony’, including the production of bacon, ham, butter, cheese,
ghee, sugar, timber, wheat, wheat flour, beer, and tea. Pim argued that
these industries would probably not have become established in the ab-
sence of the protective tariff. According to Van Zwanenberg, ‘by 1939
Kenya was producing her own beer, cigarettes, soap, cement, and canned
fruit and vegetables. Although, in total, Kenya’s industrial growth had
been very small, she was already ahead of Uganda and Tanzania. Kenya’s
55
The refusal of settlers to pay income tax resulted in a shortfall of £233,340 between
the expected revenue from the tax (£328,413) and actual revenue collected (£95,073). See
Moyne, Report by the Financial Commissioner, p. 59. For more detail, see Chapter 5.
56
The Customs Tariff Amendment Ordinance (No. 3) 1921, Table 1.
57
The Customs Tariff (Amendment) Ordinance 1922, Table 1.
58
Hazlewood, Economic Integration, p. 22.
59
The Customs Tariff Ordinance 1923, Tables 1–2.
industrial growth had occurred under the protection of tariff barriers.’60

Falling revenue from customs tariffs on these products indicate that the
tariffs were indeed curbing imports. Customs revenue on wheat meal and
flour, sugar and tea declined from £43,500 in 1923 to £8,375 in 1935.61
This may have been good news for the producers of these goods, but it
was bad news for the colonial treasurer. The Kenya administration faced
growing deficits from 1929 onwards, making concessions of tariff revenue
a particular hardship. Dependence on tariff revenue may have been one
reason tariff protection was not more widespread in the colonies during
the inter-war period. The southern African territories of South Africa and
Southern Rhodesia, notably less dependent on tariff revenue than many
other colonies, were an exception to this. Secondary industry in both
colonies had grown as a result of the trade disruptions of the war, which
provided protection from foreign competition, and the return to more
normal trading conditions brought demands for protection. These de-
mands led to protectionist trends emerging in South Africa, which ac-
cording to Pim inspired much of the content of the 1923 tariff in Kenya
and Uganda.62 South Africa’s 1925 Tariff Act was explicitly protectionist,
and put pressure on trade relations with Southern Rhodesia (with which
it had formed a customs union).63 With its gold mines buoyed by the
rising gold price during the Depression, and an agriculture industry
which, as Phiminster writes, ‘clung desperately to what was left of its
South African market’, Southern Rhodesia did not follow suit until 1937,
when the Customs and Excise Tariff Act, though not explicitly protec-
tionist, did impose tariffs on South African manufactures.64 Because of its
tariff agreements with Southern Rhodesia, Northern Rhodesia’s tariff
policy followed that of its southern neighbour. This, along with the struc-
ture of railway rates, gave Southern Rhodesian farmers equal access to the
crucial Copperbelt market, over the objections of farmers in Northern
Rhodesia.65
Though the scope for tariff protection was limited, producers contin-
ued to demand state support. Another way for the colonial state to sup-
port producers was by asserting greater influence over the process by
which exports were bought and sold. As Vickery notes, the range of state
60
Van Zwanenberg and King, Economic History, p. 125.
61
Pim, Report on Kenya, pp. 30–1.
62
63
For more on protectionist tariffs in South Africa, see Schneider, ‘Development of the
Manufacturing Sector’.
64
The Southern Rhodesian government’s support for secondary industry expanded after
World War Two. For more on tariffs in Southern Rhodesia, see Phimister, Economic and
Social History of Zimbabwe, pp. 239–58.
65
Kanduza, Political Economy of Underdevelopment, pp. 84–5.
policies affecting the agricultural trade expanded during this period to

include not only tariffs and subsidies, but also licensing, land division,
quarantines, prohibitions on production, compulsory production, and
statutory marketing boards.66 Hopkins describes marketing boards as ‘just
one feature of a search for security’ after the Depression.67 They were in-
tended, administrators claimed, to provide a minimum price to produc-
ers, using the profits made from good years (when the export price was
higher than the fixed price set by the Board) to subsidize them during bad
ones. From their establishment in the 1930s, state-controlled marketing
schemes were consolidated and expanded during World War Two, when
the need to ensure continuous supplies of strategic goods prompted mas-
sive state intervention in export markets.68
Colonial marketing boards are the subject of an extensive secondary
literature, largely owing to their importance in agricultural development
in the colonies after World War Two.69 The range of different industries
discussed in this literature is suggestive of a widespread turn towards state
controlled marketing following the Great Depression. This includes maize
and cattle (in the Rhodesias and Kenya), sisal (Kenya and Tanganyika),
and cocoa (Gold Coast and Nigeria), to name a few.
A common feature of most research on marketing boards is an emphasis
on the relative influence of different interest groups in the structure and
aims of state intervention in different colonies. In all cases, as Westcott ob-
serves, ‘political influence was an important weapon in the struggle against
economic adversity’.70 Rodney presents what can perhaps be characterized
as an extreme version of the general view of marketing boards. ‘In practice,
the Boards paid peasants a low fixed rate during many years when world
prices were rising. None of the benefits went to Africans, but rather to the
British government itself and to the private companies, which were used as
intermediaries in the buying and selling of the produce.’71
66
67
68
Westcott, ‘East African Sisal Industry’, p. 445.
69
Some notable examples include: Alence, ‘Origins of the Ghana Cocoa Marketing
Board’; Hazlewood, ‘Trade Balances and Statutory Marketing’; Helleiner, ‘Fiscal Role of
Marketing Boards’; Meredith, ‘State Controlled Marketing’; Meredith, ‘Reform of Cocoa
Marketing’; Mosley, Settler Economies, pp. 43–70; Van Zwanenberg and King, Economic
History of Kenya and Uganda, pp. 216–24; and Westcott, ‘East African Sisal Industry’.
Hopkins claims that the concentration on marketing boards in discussions of government
interventions in overseas trade ‘has led to the neglect of issues which are relevant not only
to an appreciation of the historical context in which the Boards were conceived and estab-
lished, but also to an understanding of changes in the role of government in the economy
during this period’. Hopkins, Economic History of West Africa, p. 264.
70
Westcott, ‘East African Sisal Industry’, p. 446.
71
Rodney, How Europe Underdeveloped Africa, pp. 168–9.
In reality, the relationships between different groups of producers and

colonial governments were more complex. Controlled marketing was
generally (though not always) supported by producers of the commodity
to be protected, but opposed by consumers who would have to pay higher
prices.72 This included influential organizations like mines and planta-
tions, which in some cases were more valuable to the economy of the
colony than the producers being protected. Meanwhile colonial adminis-
trations faced a familiar choice between protecting producers and protect-
ing their budgets. The structure of produce marketing boards in different
industries and colonies represented the resulting compromise between
these opposing interests, and differences in who benefited from state-
controlled marketing reflected the balance of power in individual territor-
ies. Interest groups with easier access to the local colonial administration,
the Colonial Office in London, or both, could often shape marketing ar-
rangements to favour their own interests.
In Kenya, the establishment of maize control in 1942 came consider-
ably later than in Southern Rhodesia (1931) or Northern Rhodesia
(1935), a fact Mosley attributes to the political power of consumer inter-
ests.73 Coffee was a much more important export commodity than maize,
and some objected to potentially jeopardizing the more profitable coffee
industry in order to support the maize industry. A letter from the Colo-
nial Office in 1936 raised just such objections to proposals for a manda-
tory minimum price for maize. ‘The disappearance of the maize industry
as an exporting industry, though it would cause acute embarrassment to
individuals, would not greatly affect the trade position of Kenya as a
whole, but if the coffee industry was made an uneconomic one by an in-
crease in its costs of production, it is almost impossible to foresee what the
consequences would be.’74
In Southern Rhodesia, Rhodesia Railways and the Chamber of Mines
raised similar objections to those of the Kenya Coffee Board. Mosley cites
one rancher who voiced the opinion of many in suggesting that it would
be better to support African producers, whose production costs were
lower, rather than European producers.75 This was also the conclusion
of some colonial administrators in Kenya, who began to promote Afri-
can maize production as a more stable alternative for exports on the
grounds that their lower costs of production would allow them to cope
72
African producers in colonies where marketing boards were likely to be controlled by
competing settler farms were one exception. See Mosley, Settler Economies, p. 44.
73
Ibid., pp. 45–6. For the establishment of maize control in Northern Rhodesia, see
Vickery, ‘Saving Settlers’.
74
Letter from J. H. Thomas, 4 January 1936, in KNA AD/2/1.
75
better with falling export prices.76 The establishment of state-controlled

marketing schemes despite such objections is testimony to the political
clout of settler farmers in both Kenya and the Rhodesias during this
period.
In West Africa, rescuing European settlers from bankruptcy was not an
issue. However, there were a variety of interests that stood to lose or gain
through changes in the system for marketing cocoa. Studies of West Afri-
can marketing boards have shown that large British firms exercised con-
siderable influence in shaping state-controlled marketing arrangements
for cocoa and palm products, the region’s two main exports.77 In the case
of cocoa, for example, several proposals for controlled marketing were
made and then rejected by the colonial administration of the Gold Coast
during the 1930s. However, the cocoa hold-up of 1937 and the persist-
ence of depressed prices eventually made it reconsider its position, and
from 1939 the purchase of the cocoa crop was taken over by a series of
government agencies.78
Colonial administrations also served to benefit from controlled mar-
keting. Like tariffs, marketing boards could be used to raise revenue as
well as stabilize prices. If official prices were set too low, marketing boards
stood to gain substantial profit from selling the produce they had pur-
chased. This was particularly true if export prices were rising. These funds
were supposed to be used for price stabilization during periods of low
prices, but were frequently redirected to fund state development meas-
ures.79 Administrators in both colonial and post-colonial governments
struggled to prioritize between fiscal imperatives and supporting local
producers. Helleiner argues with reference to Nigeria that between 1947
and 1954, the government withheld over 39 per cent of potential pro-
ducer income from cocoa, either through taxes or marketing board sur-
pluses. A substantial proportion of these funds was used not for price
stabilization, but to fund other government initiatives.80 Mosley notes
with reference to Kenya and Southern Rhodesia that maize control essentially
involved ‘a taxing away’ of the surplus above the export price which Africans
enjoyed due to their access to the local market. This surplus was used to sup-
port a higher price for European producers.81
76
Anderson and Throup, ‘Agrarian Economy’ and Kitching, Class and Economic Change,
pp. 59–62.
77
Meredith, ‘State Controlled Marketing’; Meredith, ‘Reform of Cocoa Marketing’.
78
79
Bates, Markets and States in Tropical Africa, pp. 12–13.
80
Helleiner, ‘Fiscal Role of Marketing Boards’, p. 585. A similar conclusion for West
Africa as a whole is reached in Hazlewood, ‘Trade Balances and Statutory Marketing’,
pp. 74–5.
81
Debates about the purposes of marketing boards and whose interests

they should serve would continue as marketing boards became important
institutions through the rest of the colonial period and beyond. In Kenya
as well as other settler colonies, the overtly discriminatory structure of
state-controlled marketing which favoured European producers above Af-
rican caused considerable controversy after World War Two.82 Further,
many of the colonial marketing boards survived intact into the post-colo-
nial era; the Northern Rhodesia Maize Control Board, for example, was
the direct ancestor of Zambia’s National Agricultural Marketing Board.83
Both Bates and Helleiner note that the use of marketing board surpluses
to the government budget continued under both the colonial and post-
independence regimes.84
The institutional changes that resulted from the economic shocks of
the inter-war period therefore had a lasting influence on colonial political
economies in Africa. Never again would colonial administrations enthu-
siastically embrace their role as suppliers of raw materials for the world’s
industrial economies, though the often conflicting agendas of colonial
policies and the limited resources available to colonial states ensured that
their economic role did not change.
COLONIAL VERSUS IMPERIAL INTERESTS:

I M P E R I A L T R A D E P O L I C Y, 1 9 1 8  3 8
This turn towards protectionism in its various forms brought the interests
of the colonies into conflict with those of the metropole. Like its colonial
dependencies, the British government was struggling to cope with the eco-
nomic turmoil. Some British politicians hoped that the Empire could help
revive the country’s struggling economy, and introduced measures to in-
crease colonial imports from Britain. These included not only preferential
tariffs, but also quotas limiting the import of Japanese goods into West
African colonies and restrictions on colonial government purchasing. In
the colonies, these measures often had the effect of increasing costs for
both individual producers and governments already pressed for cash. Co-
lonial administrations, which despite their financial autonomy could not
completely disregard London’s wishes, protested that these policies re-
quired the sacrifice of local interests in favour of metropolitan interests.
82
Ibid., pp. 51–2.
83
84
Bates, Markets and States in Tropical Africa, pp. 13–19; Helleiner, ‘Fiscal Role of Mar-
keting Boards’.
The introduction of preferential tariffs was long in the making, and

fit with a general tendency towards raising barriers to trade during and
after World War One.85 The war revealed the dependence of Britain
and the other industrial powers on overseas supplies of food and raw
materials; Offer argues that Britain’s superior access to such supplies
through its Empire, particularly the Dominions, was a decisive factor
in the war’s outcome.86 Victory gave the British government a power-
ful incentive to strengthen economic ties with its colonies, as did the
economic hardship that followed the war.87
The writing of the U.S. Tariff Commission’s 1922 report on colo-
nial tariff regimes, cited in the previous chapter, was motivated by a
fear in Washington that Europe’s imperial governments would use
trade taxes to restrict access to the produce of their colonies.88 A mem-
orandum sent by the U.S. Chamber of Commerce to the Tariff Com-
mission noted that ‘certain circumstances attending to the War have
evoked a new conception of the value of the colonies as a source of
raw materials, and have raised the question of how far are the chief
colonial powers to be allowed, if they develop their policy in this di-
rection, to monopolize the world’s supply of certain colonial
products’.89
The U.S. Tariff Commission itself had been established in 1916 in rec-
ognition of the fact that the setting of tariffs was likely to become more
complex after the end of the war. The outbreak of war had been the demise
of the international cooperation which had been the foundation of free
trade in the late nineteenth century (and which was already suffering
before the war began).90 Business communities in the US had been lobby-
ing for such an agency since 1907 in order to bring economic expertise
into what had previously been a somewhat haphazard method of designing
tariff policy. President Wilson finally succumbed to this pressure when ‘it
became clear that the economic effects of the European war would trans-
85
Cain and Hopkins, British Imperialism, p. 662. The political backlash against global-
ization actually began in the late nineteenth century in Europe, North America, and Aus-
tralia/New Zealand. This set the precedent for the decades of ‘deglobalization’ during the
inter-war period. O’Rourke and Williamson, Globalization and History, ch. 6.
86
Offer, The First World War.
87
88
Bernhardt, The Tariff Commission, p. 34.
89
U.S. Chamber of Commerce, ‘Topics Suggested for Discussion at the Paris Meeting
in May’, 1919, in NARA R.G. 81 General Correspondence of the U.S. International Trade
Commission, Box 1.
90
Irwin, ‘Multilateral and Bilateral Trading Policies’, p. 103.
form the industrial and commercial world’, increasing the need for infor-
mation to guide future policy.91
The gradual shift towards a system of imperial preference had begun
nearly two decades before the war. Its first proponents were in the Do-
minions, rather than in Britain itself. Canada adopted a preferential tariff
for Britain in 1898, shortly after the first Ottawa Conference in 1894
passed resolutions in favour of Imperial preference (with Britain and New
South Wales dissenting). The other Dominions followed shortly there-
after, including New Zealand in 1903 and South Africa in 1904.92
Britain maintained its own resistance to imperial preference until after
the war. The first tentative step came with the 1919 Finance Act, which
established preferential tariffs for commodities already subject to import
duties. Support for preference grew in the subsequent years, though in the
face of fierce debates. In 1923 the Imperial Economic Conference adopted
the following resolution: ‘This Imperial Economic Conference, holding
that, especially in present circumstances, all possible means should be
taken to develop the resources of the Empire and trade between the
Empire Countries.’93 Preference was granted on a short list of other duties
in the decade to follow.94
However, it was the 1932 Ottawa Agreements which extended prefer-
ence more broadly. They followed a slew of other legislation in 1931,
which expanded powers to impose tariffs on imports and moved Britain’s
tariff policy decisively away from the system of primarily (if not entirely)
free trade of the late nineteenth and early twentieth centuries.95 The
Ottawa agreements themselves increased the level of preference granted to
British goods by the Dominions and reduced Dominion tariff duties.96
It was known from the beginning that the application of imperial pref-
erence to the dependent empire would be limited. The aim of the Ottawa
Conference was to secure agreements on trade with the Dominions; how
these agreements would influence trade with the dependent Empire was
91
Bernhardt, The Tariff Commission, pp. 1–23. The Tariff Commission’s importance in
the post-World War One years is also emphasized in a letter from Young to Taussig, Chair-
man of the USTC, 22 May 1918, in NARA RG 81, Minutes of Commission Meetings and
Hearings, U.S. International Trade Commission, Box 1.
92
Russell, Imperial Preference, pp. 16–17.
93
Quoted in ibid., p. 22.
94
For a summary of preferences granted before 1932, see Glickman, ‘Imperial Prefer-
ence’, pp. 441–2; Russell, Imperial Preference, pp. 21–8.
95
For an overview of trade policy before World War One which puts British policies in
a global context, see Findlay and O’Rourke, Power and Plenty, pp. 395–402. Britain’s com-
mitment to free trade is questioned in Nye, War, Wine and Taxes.
96
Cabinet Conclusions on Imperial Preference and the Ottawa Conference, 27 August
1932, published in Ashton and Stockwell, Imperial Policy and Colonial Practice, pp.
27–32.
open to question. Treaty obligations and the fiscal limitations of the col-
onies themselves meant that extension of the terms of the agreement to
the colonies could only be partial. As the Cabinet Committee convened
to consider the conference noted the previous year, many colonies ‘are in
such a depressed financial condition that they cannot risk the loss of rev-
enue involved in granting increased or additional preferences beyond
those at present accorded; on the other hand they may be able to give such
preferences when trade revives’.97
Hopkins argues with reference to West Africa that imperial preference
was ‘inspired primarily by a desire to safeguard the interests of the colo-
nial powers’.98 It is difficult to know to what extent imperial preference
accomplished its goal. Trade between the colonies and the metropole was
influence by a range of factors, including relative prices, production and
demand in the colonies, trade connections, and habit. Tariffs were just
one of these factors. Clauson claimed in 1937 that imperial preference
had resulted ‘not in the creation of new channels of trade between the
United Kingdom and the Colonial Empire (although individual items
entering into that trade have of course been affected) but merely in a
slight deepening of existing channels’.99 Drummond estimates that im-
perial preference slowed the decline in Britain’s share of the Empire’s im-
ports, and resulted in an increase in British imports from the Empire.
However, the trade diversion effects were small relative to income.100
Figure 4.5 shows the proportion of imports from Britain for selected col-
onies, and supports Drummond’s conclusions.
Imperial preference has received a great deal of attention, both from
contemporaries and from historians.101 Along with the 1929 Colonial
Development Act, imperial preference is considered one of the major
shifts in British colonial policy during the inter-war period: evidence of a
weakened metropole attempting to draw strength from its colonies. How-
ever, there were other, less well-known policies intended to better inte-
97
Report by the Cabinet Committee on the proposed Imperial Economic Conference,
23 November 1931, published in Ashton and Stockwell (eds.), Imperial Policy and Colonial
Practice, pp. 17–24.
98
99
Clauson, ‘Preferential Trade Between the UK and the Colonial Empire’, April 1937,
published in Ashton and Stockwell, Imperial Policy and Colonial Practice, pp. 41–5.
100
Drummond, Imperial Economic Policy, p. 285.
101
The literature on imperial preference falls roughly into two categories: (1) earlier
histories produced in the context of ongoing political debates about imperial preference,
and (2) broader works on the economic history and policies of the Empire or its constitu-
ent territories. For the first category, see Russell, Imperial Preference. For the second, see
Cain and Hopkins, British Imperialism, chs. 20–21; Havinden and Meredith, Colonialism
and Development, pp. 187–91.
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937
Kenya N. Rhodesia
Fig. 4.5. Proportion of imports from Britain, 1925–37

Source: Board of Trade, Statistical Abstract 1924–33, 1928–37.
grate the economies of the British Empire, particularly for the benefit of
British industry.
A particularly controversial measure was the imposition of quotas for
foreign textile imports. The object of these quotas was to stop cheap
Japanese textiles being imported into the colonies, where they competed
with Lancashire textile mills. Support for this policy was mixed; in East
Africa and the Straits Settlements, colonial governors argued that the im-
positions of quotas would raise the cost of living for the poor, with poten-
tially dire political consequences.102 In the end, British textile producers
received little benefit from the quotas (as Indian textile producers proved
to be effective competition) while colonial consumers faced rising costs
and tariff revenue from textile imports in the colonies declined.103
Further, policies regulating the purchase of government stores by colo-
nial administrations were adopted and refined alongside preferential tar-
iffs. The 1923 Imperial Economic Conference adopted a resolution giving
preference to Empire products in British government contracts.104 In the
course of the 1920s it was made clear that Britain expected its colonies to
respond in kind, and regulations on colonial government purchasing were
tightened. These regulations were intended to ensure that colonies would
102
East Africa was ultimately omitted from the quotas due to the Congo Basin treaties.
For more detail, see Havinden and Meredith, Colonialism and Development, pp. 188–9.
103
Ibid., pp. 190–1.
104
Russell, Imperial Preference, p. 23.
maintain a certain level of imports from Britain, but some colonial ad-
ministrations protested that such rules increased their costs.
Colonial administrations had long been required to purchase non-
locally manufactured public sector stores through the Crown Agents, who
were also responsible for the provision of external finance and the con-
struction of railways, harbours, and other public works.105 This policy was
somewhat loosely enforced until 1928, when the Colonial Office sought
to clarify its policy regarding the purchase of government stores. A. J.
Harding, Director of Colonial Audit, noted that ‘Colonial Regulation
347 laid down for the first time in the Colonial Regulation in explicit
terms the rule that local purchases should be confined to articles pro-
duced in the Colony’. The regulations did allow colonies to purchase
stores from suppliers other than the Crown Agents if stores could be ob-
tained more cheaply, but only under specifically defined circumstances.
Outside these circumstances, purchases would have to be approved by the
Secretary of State.106 In 1937 Clauson observed that ‘so far as government
purchases and the placing of government contracts for public works are
concerned the United Kingdom possesses a practical monopoly . . . This is
of course partly due to a policy deliberately adopted to benefit United
Kingdom manufacturers, and its practical effect is considerable.’ By that
time the Crown Agents were making annual purchases from the UK of
around £4,500,000 per year, and often more.107
Clauson argued that this policy also benefited colonial governments, as
the Crown Agents could more effectively guarantee the quality of goods
purchased. Few in the colonies would have agreed. Northern Rhodesia
found this policy particularly vexatious. Landlocked, with its only trans-
port links to Southern Rhodesia and South Africa, administrators be-
lieved they could obtain stores more cheaply from within southern Africa,
and saw the tightening of regulations as intended to serve British inter-
ests. The Northern Rhodesia treasurer wrote to the Chief Secretary that
‘the principle underlying Colonial Regulation 347 appears to be that as
far as possible a colony should purchase British made goods unless such
goods are produced in the colony. In this way a market in the colonies for
British made goods is secured for British manufacturers . . . I think there is
no doubt that a waste of public money would result from an attempt to
adhere strictly’ to its provisions.108
105
Sunderland, ‘Principals and Agents’, p. 284.
106
Circular from Director of Colonial Audit, 25 March 1929, in NAZ SEC1/739.
107
Clauson, ‘Preferential Trade Relationship’, p. 44.
108
Northern Rhodesia Treasurer to Chief Secretary, 1 July 1929, in NAZ SEC1/739.
Colonial administrations were also under pressure from local merchants

to purchase supplies from them. A letter from the Ndola and District
Chamber of Commerce to the Ndola Provincial Commissioner stressed
the benefits to Northern Rhodesia’s coffers from purchasing from local
vendors, whose profits could be taxed locally. The letter complained that
There is a feeling that the Department of Stores and Transport does not
want to give Ndola business houses the chance to tender for supplies to the
government. The Department of Stores and Transport has had arrangements
in force for some considerable time whereby its requirements are obtained
through buying agencies at Bulawayo or Johannesburg, or by buying direct
from overseas. Although it can readily be understood that the department
would not wish to change a comfortably established and smoothly working
routine, it is, at the same time, felt that the hard and fast continuance of its
present arrangement is neither fair nor satisfactory.109
As the revenue situation deteriorated in the early 1930s, the administra-
tion began to look more favourably on purchasing from merchants
within the colony. The Northern Rhodesia administration eventually
placed several small orders with Ndola merchants after allowing them to
submit tenders for the supplies. The Controller of Stores and Transport
complained that the results of this experiment were ‘not very encourag-
ing’.110 The limited success of this effort indicated the extent of economic
specialization among African colonies.
This conflict of interests was not unique to Northern Rhodesia. A
letter from the Chairman of the Federation of Chambers of Commerce
of the British Empire stated that ‘for a number of years the trading com-
munities in the Colonies have evinced a strong sense of grievance in
connexion with the question of the purchase of stores by Colonial Gov-
ernments’.111 The financial self-sufficiency demanded by London, along
with steadily increasing burdens of debt servicing and pension payments
during the Great Depression meant that colonies could ill-afford to in-
crease expenditure on public sector stores, particularly when that extra
expenditure was seen to benefit British manufacturing interests distant
from the economic difficulties they faced within their own borders.
However, despite the debate and tendencies within the colonies to at-
tempt to favour local suppliers, the Crown Agents continued to supply
government stores even after independence, maintaining an economic
109
Ndola and District Chamber of Commerce to Ndola Provincial Commissioner, 28
January 1932, in NAZ SEC1/739.
110
Controller of Stores and Transport to Chief Secretary, 28 October 1932, in NAZ
SEC1/739.
111
Chairman of the Federation of Chambers of Commerce of the British Empire to
Secretary of State for the Colonies, 22 January 1932, in NAZ SEC1/739.
tie with Britain that might have disappeared without the regulation of
the Colonial Office.112
*****
Collectively, these changes represented a major blow to the system of
complementary development described by the Kenya Economic Com-
mission. This was true not only for Kenya but across Britain’s colonies in
Africa. In his history of West Africa, Hopkins contrasts ‘the favourable
terms of trade, the swelling public revenues and the optimism of the early
twentieth century’, which ‘had first made possible, and then sustained, a
policy of cooperation between colonial rulers and key interest groups
among their African subjects’, with the 1930s, when ‘the unfavourable
terms of trade, the declining revenues and the pessimism of the period
1930–1945 were reflected in the discontent expressed by African farmers,
traders and wage-earners, and led to mounting criticism of the colonial
regime’.113 Evidence of this discontent could be seen quite plainly in the
case of direct taxation, which will be explored in the next chapter.
From then on, imperial and colonial interests would struggle to find
common ground in terms of their economic policy, as local initiatives to
increase economic stability often conflicted with metropolitan priorities.
This conflict of interests has long been recognized for the Dominions;
Glickman observed in 1947 that Britain’s focus in imperial preference was
increasing the market for its exports, while the Dominions ‘were all en-
gaged in granting protection to their own manufacturing industries’.114
The same dilemma existed in the colonies, but the more limited fiscal
resources and political autonomy of the colonies often prevented them
from acting on it to the same degree.
Though not obvious at the time, this period represented the beginning of
the end for the British Empire. The most dramatic expressions of these con-
flicts were outbreaks of unrest across the British Empire, which occurred with
increasing frequency and severity as the economic crisis persisted. Growing
political opposition within the colonies shaped the fiscal responses of colonial
governments to the crises of the inter-war period. Colonial administrations
acknowledged that more active intervention would be needed in order to
maintain stability. In these efforts they were continually hampered by the
shortage of resources, which severely limited the options available to them.
The struggle to balance fiscal parsimony with political necessity was one of the
defining characteristics of colonial policy in the inter-war period.
112
For Crown Agent interactions with the former colonies after independence, see TNA
CAOG 14/16, TNA CAOG 14/54.
113
114
Glickman, ‘Imperial Preference’, p. 443.
5
Collective Action and Direct Taxation,
1918–1938
While colonial administrations struggled to shape their role in a newly in-

secure world, their fiscal position became increasingly precarious. Figure 5.1
shows the budget position of African colonies from 1924 to 1933. From the
accumulation of relatively significant surpluses in the late 1920s, African
colonies moved rapidly to large deficits in the early 1930s. Tariff revenue
was a source of particular volatility, and there was little colonial administra-
tions could do to increase it during trade depressions.1 Direct taxes proved
to be a steadier source of revenue throughout this turbulent period. The
contrast is highlighted in Figure 5.2. Hoping to make up shortfalls in cus-
toms revenue, colonial administrators turned their attention to the system
of direct taxation, adjusting rates to increase revenue collections.
Efforts to reform the direct taxes imposed on both Africans and non-Af-
ricans during this period posed questions that were no less challenging than
those generated by changes in trade policy. Who should pay and how much?
In a period when incomes were declining, the distribution of the tax burden
between different communities within each colony became the subject of
bitter disputes. Colonial administrators tried various methods to manage
this rising political tension while still keeping their books in balance.
As was the case with trade taxes and marketing boards, taxation was an
area of colonial policy where political clout was a key resource in managing
economic hardship. The relative political influence of different groups of
taxpayers was directly related to how much of the tax burden they were
forced to shoulder. In the meantime, those least able to protest faced in-
creased pressure to pay more even as their means declined. Settler communi-
ties, for example, were better able to act collectively to influence the
policy-making process and thereby avoid additional taxation. This was par-
ticularly true in Kenya, where Europeans and Asians successfully blocked
attempts in 1920 and 1931 to introduce an income tax after the severe de-
clines in customs revenue in those years.
1
Kesner, Economic Control and Colonial Development, pp. 14–15.
Collective Action and Direct Taxation 93
40%
30%
20%
10%
0%
–10%
–20%
–30%
–40%
1924 1925 1926 1927 1928 1929 1930 1931 1932 1933
Nigeria Gold Coast S. Rhodesia Nyasaland

N. Rhodesia Kenya Uganda
Fig. 5.1. Financial position of British colonies in Africa, 1924–33

Source : Calculated from Board of Trade, Statistical Abstract, 1924–33; Feinstein, Statistical Tables of
National Income, Table 61.
The influence of European settlers on colonial policy has long been a

major theme in the historiography of colonial Africa. Widely cited re-
search on colonial development outcomes has revived this interest in
recent years. Acemoglu, Johnson, and Robinson argue that better institu-
tions were established in colonies where settler communities could thrive,
which resulted in better economic performance of the North American
and Australian colonies compared to the tropical Empire.2 However, their
analysis does not take into account colonies like Kenya and the Rho-
desias, which, according to Kennedy, ‘combined the European immigrant
community that distinguished the colony of settlement and the far larger
indigenous population that distinguished the colony of exploitation’.3
Bowden, Chiripanhura, and Mosley argue that in such colonies settlers
actually had a negative impact on long-term development, as they ab-
sorbed a disproportionate share of scarce colonial resources, at the expense
2
Acemoglu et al., ‘The Colonial Origins of Comparative Development’.
3
Kennedy, Islands of White, p. 2. A similar criticism of Acemoglu et al. is made in
Bowden and Mosley, ‘Evolution of Poverty in Africa, 1920–2007’.
a. Kenya
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
192419251926192719281929193019311932193319341935193619371938
b. Northern Rhodesia
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938
Tariffs Direct Tax

Hut and Poll Tax Other
Fig. 5.2. Revenue by source in Kenya and Northern Rhodesia, 1924–38 (1913
prices)
Source : Calculated from Kenya, Blue Books, 1927–38; Kenya, Financial Reports, 1924–26; Northern
Rhodesia, Blue Books, 1925–38; Pim, Report on Northern Rhodesia. Deflated using data from Feinstein,
Statistical Tables of National Income, Table 61.
of expenditure benefiting the African majority.4 This chapter contributes

to the debate on the impact of European settlers, using a study of direct
taxation to show that the institutional impact of settler communities in
Africa depended on their political clout within individual colonies.
The inability of the colonial state to impose an equivalent tax burden
on Europeans and Asians as it did on Africans not only exacerbated the
problem of balancing the budget but also made taxation an increasingly
contentious issue in relationships between migrant communities and
4
Bowden et al., ‘Measuring and Explaining Poverty’.
Africans. The inter-war period also saw a variety of attempts to reform

African hut and poll tax. In attempting to increase collections of direct tax
from Africans, colonial administrators were confronted by the weaknesses
of the tax system they had established in the first decades of imperial rule.
The system of exemptions negotiated through local intermediaries estab-
lished before the war was entrenched and made the revision of tax rates
and the closer enforcement of tax collection exceedingly difficult.
Further, the hardships of the Depression made paying the tax more
difficult for many Africans, reviving fears of tax revolts and disturbances
among colonial administrators. In response, colonial administrations
attempted to make hut and poll taxes more progressive, setting rates ac-
cording to the approximate incomes of taxpayers, in order to increase
collections. However, having used the local negotiation of exemptions to
avoid the costly collection of information on taxpayers, they still had little
reliable information on what these incomes might be. The best that colo-
nial administrations could do was to vary tax rates by province or district,
attempting to tax apparently affluent regions more heavily. Unfortunately,
the large size of the areas they used to differentiate tax rates made this a
blunt instrument which was not particularly effective in creating a more
equitable tax burden or increasing revenue collections.
As African incomes fell alongside export prices, tax evasion became
increasingly prevalent, and district commissioners attempted to enforce
the tax more forcefully than they had before. Growing numbers of pros-
ecutions for non-payment incurred financial costs through trials and
sometimes imprisonment as well as considerable political costs among
those prosecuted. In addition, an increasing tax burden as well as harsher
punishment for non-payment again raised the spectre of tax rebellions.
The combination of these factors was a central motivation for increasing
African political agitation in both territories, which alongside protests
and riots elsewhere in the tropical empire ultimately led the imperial gov-
ernment to pursue a more progressive development strategy with a greater
emphasis on social service provision from the late 1930s.
This chapter examines events that have already been widely studied by
historians of the British Empire in Africa, including the impact of the
Great Depression on the living standards of both Africans and immigrant
communities, and the increasingly vocal attempts by both to obtain as-
sistance from the colonial administration during the downturn. In this
literature taxation is often mentioned as an important aspect of the rela-
tionship between colonial administrations and their subjects, but rarely
studied in detail. However, as this chapter shows, the relationship be-
tween taxpayers and the colonial state was central to the deteriorating
relationships between colonial administrations and those they were trying
to govern; this deterioration would ultimately lead to the Empire’s

collapse.
D I R E C T TA X E S V E R S U S T R A D E TA X E S :
R E T H I N K I N G R E V E N U E S O U RC E S
As the previous chapter discussed, the volatility of the inter-war period

made the wisdom of relying on trade taxes as a revenue source question-
able. As a result, colonial administrations turned their attention to the
other major source of revenue, namely direct taxes. Table 5.1 shows the
relative contribution of different revenue sources in Kenya and Northern
Rhodesia at the beginning of the inter-war period. Each collapse of export
prices was followed by attempts to increase revenue from direct taxes im-
posed on the African population as well as immigrant groups.
Table 5.1. Primary sources of government revenue, 1918–24

a. Kenya
Customs Hut & poll tax Other direct tax Licences & fees Other
1918 22% 32% 1% 18% 26%
1919 19% 29% 2% 17% 33%
1920 22% 37% 1% 16% 24%
1921 19% 38% 1% 18% 24%
1922 24% 31% 2% 13% 31%
1923 27% 31% 1% 10% 31%
1924 29% 27% 1% 11% 32%
Source : Calculated from East Africa Protectorate/Kenya Colony, Financial Reports 1918–34.
b. Northern Rhodesia
Customs Hut & poll tax Other direct tax Licences & fees Other
1918 23% 57% 0% 7% 13%
1919 24% 55% 0% 7% 14%
1920 26% 48% 0% 7% 19%
1921 28% 39% 7% 7% 18%
1922 24% 38% 18% 6% 14%
1923 24% 36% 17% 7% 17%
1924 23% 33% 13% 6% 25%
Source : Calculated from British South Africa Company, Directors Report and Accounts, 1918–23;
Northern Rhodesia, Blue Book, 1924.
According to Overton, in alleviating the deficit in Kenya, ‘the principal

means that the government sought was an increase in African taxation’.5
Kenya increased taxation on Africans during both World War One and
the 1920 price collapse. The rate of African hut and poll tax increased
from three rupees imposed under the Native Hut and Poll Tax Ordinance,
1910, to a maximum of five rupees under the 1915 Ordinance. The
higher maximum was applied throughout the territory by 1916, apart
from certain enumerated districts and the Maasai areas.6 Members of the
colonial administration also suggested new ways of raising revenue, many
of which were not ultimately adopted. In 1915, for example, John Ains-
worth, the Provincial Commissioner of Nyanza Province in Kenya, sug-
gested the adoption of property taxes on shops and offices, hotels, and
theatres or the use of trade licences for shops and tobacco dealers to raise
additional revenue.7
In 1920, following the collapse of the 1919 commodity price boom,
the rate of African taxation was increased again to a general rate of eight
rupees and a maximum rate of ten rupees.8 The rapid appreciation of the
rupee against sterling in 1920 made the imposition of these new rates
virtually impossible.9 After the East African shilling was finally adopted in
1921, the tax rate was set at 12 shillings across the territory by Proclama-
tions 88 of 1922 and 78 of 1924, with the exception of the Maasai, who
were liable to 20 shillings.10 Figure 5.3, which shows hut and poll tax
revenue from 1913 to 1923, shows that these rate changes were at least
somewhat successful in raising additional revenue. The increase in the
revenue collected was, however, less than the increase in the tax rates.
From 1915 to 1916, for example, when the maximum rate increased by
two thirds, the revenue collected increased by only 26 per cent. When the
maximum rate doubled in 1921, the collection in 1922 was 83 per cent
higher. The system of informal exemptions from the tax established before
World War One in order to adjust the tax rate according to the ability to
pay of poorer taxpayers (and the corruption which accompanied it)
5
Overton, Spatial Differentiation, p. 228.
6
These included Elgeyo, Kamasia, Marakwet, Suk, and Turkana.
7
Provincial Commissioner Nyanza to Chief Secretary, 26 May 1915, in KNA
AG/39/376.
8
Walsh and Montgomery, Report on Native Taxation, pp. 6–8.
9
For a detailed account of the changes to Kenya’s currency, see Maxon, ‘The Kenya
Currency Crisis’.
10
The high rate of taxation imposed on the Maasai reflected the colonial administra-
tion’s impression that the pastoral Maasai possessed considerable liquid assets (in the form
of cattle). According to Waller, the colonial administration debated many different ways of
taxing this apparent wealth, eventually settling on a higher direct tax rate. See Waller,
‘Maasai Stock Economy’.
£350,000
£300,000
£250,000
£200,000
£150,000
£100,000
£50,000
–£
1914 1915 1916 1917 1918 1919 1920 1922 1923 1924
Fig. 5.3. Hut and poll tax revenue in Kenya, 1914–24 (in 1913 £)
Source : Kenya Colony, Financial Report for 1924. Deflated using data from Feinstein, Statistical Tables
of National Accounts. Data for 1921 are for nine months of the year only owing to a change in the fiscal
year, and have been omitted here.
appears to have made rate changes less effective in increasing revenue col-
lections than they might otherwise have been.
At the same time the Kenyan administration also attempted to increase
its tax collections from the European population. The 1920 Income Tax
Ordinance mandated the collection of a progressive tax on both private
incomes and corporate profits. No tax was imposed on incomes of less
than £150; on the next £225 of income, the rate was 1 per cent, and so
on up to 25 per cent for income above £28,000 per annum.11 Until the
passage of the 1920 Ordinance, non-Africans had paid only a poll tax of
30 shillings per year.12
The Ordinance was passed by an official majority over the protests of
European unofficial members of the Legislative Council. Those who ob-
jected to the income tax argued that it would impose a disproportionate
tax burden on European and Asian taxpayers, dissuade investors from
bringing capital into the country, and moreover that the colonial admin-
istration was not legally entitled to impose such a tax without direct au-
thorization from Parliament.13 In response to the passage of the Ordinance,
a group called European Taxpayers’ Protection League (organized by lead-
ing members of the Nairobi Municipal Council) was established in
11
The Income Tax Ordinance 1920.
12
13
For more details on the commercial arguments against income tax, see Association of
East African Chambers of Commerce to Colonial Secretary, 21 November 1921, in KNA
AG/39/32; For arguments that the tax was illegal, see ‘Income Tax: Full Text of Important
Judgment—Powers of the Legislative Council, Limitations of the Crown’s Powers’, East
African Standard, 30 January 1922, which provides the judgment in Commissioner of
Income Tax v. Gurandittamal Kanayalal.
Nairobi in 1921. It advocated ‘concerted action’ by all Europeans to refuse

to fill in tax returns or pay the tax owed.14
As a result of these efforts the first collection of the income tax was a
failure by most accounts. A considerable number of taxpayers refused to
pay, and the revenue collected in 1921 fell far short of the estimate.15 Ac-
cording to the Bowring Committee, which opposed the imposition of the
income tax, only £58,000 out of an estimated £328,413 was forthcoming
when collections began in 1921.16 The tax was abandoned the following
year, when the colonial administration attempted to compensate for the
lost revenue by imposing new tariffs on luxury goods.17 A land tax, or a
percentage tax on the unimproved value of the land, was proposed along-
side the income tax and also abandoned.18 Other proposed taxes included
an export tax on cotton and a tax on domestic servants.19 All of these were
opposed by the settler community.20 The abandonment of the income tax
meant that throughout the 1920s Europeans and Asians continue to pay
only a poll tax of 30s, with the sole addition of a special levy of 30s from
Europeans and 20s from Asians introduced in 1927 to cover the costs of
European and Asian education.21 Sir Alan Pim believed evasion of the
non-native poll and education taxes was rampant. He noted in his 1936
report on Kenya that in Nairobi in 1935, £1,825 of £8,347 claimed in
Nairobi for non-native poll tax, education tax, and hospital fees had to be
forgone due to non-service of summons, £1,170 was waived through ex-
emptions, £892 was collected, and £4,460 was still outstanding.22
Like Kenya, Northern Rhodesia also turned to taxing non-Africans to
help resolve its budget deficit, imposing an income tax under Proclama-
tion No. 4 of 1921.23 The first collection realized £17,463 or 7 per cent of
total revenue.24 By 1936 it contributed 26 per cent.25 Income tax revenue
increased rapidly as the expansion of the copper industry brought in new
14
15
Bennett, ‘Settlers and Politics in Kenya’, p. 297.
16
Kenya Colony, Economic and Financial Committee: First Interim Report. Lord Moyne
gives slightly more optimistic figures in his 1932 report, which gives the final collection as
£95,073. The difference may reflect arrears collected after the publication of the Bowring
Committee’s interim report. See Lord Moyne, Report on Kenya, p. 59.
17
See Pim, Report on Kenya, p. 29.
18
Kenya Colony, Financial Report for 1920–21, p. 6.
19
‘Kenya Expenditure—A Cotton Export Tax’, The Times, 13 October 1923, p. 11.
20
Dilley, British Policy in Kenya Colony, p. 37.
21
22
23
Northern Rhodesia, Annual Report for the Year Ended 31st March 1921, p. 13.
24
British South Africa Company, Directors’ Report for the Year Ending 31st March,
1918.
25
£140,000
£120,000
£100,000
£80,000
£60,000
£40,000
£20,000
£0
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
Fig. 5.4. Northern Rhodesia income tax revenue, 1921–36 (1913 prices)
Source: Calculated from Northern Rhodesia, Blue Books; Northern Rhodesia, Financial Reports; Fein-
stein, Statistical Tables of National Income, Table 61.
European taxpayers and, most importantly, mining companies who paid

income tax on their local profits.26 Pim observed that in 1938 receipts
from the mining companies amounted to 78 per cent of total income tax
revenue.27 As Figure 5.4 shows, by the end of the 1920s the income tax
had become an integral part of Northern Rhodesia’s balance sheet. Rev-
enue declined during the Great Depression, but by the middle of the
1930s income tax was second only to tariffs as the largest single contribu-
tor to colonial revenue in Northern Rhodesia. By 1936 income tax reve-
nue was more than double the revenue from African poll tax.
Though called by the same name, the structure of Northern Rhodesia’s
income tax differed from the income tax abandoned in Kenya at the same
time. The initial rebate offered was substantially higher: £500 (or £1,000
for married men) instead of £150 in Kenya.28 This was a tax aimed at
commercial enterprises, rather than individuals. Much of the initial rev-
enue generated by the tax came from the railways and trading interests.
26
The construction and operation of the mines stimulated considerable European im-
migration. See Baldwin, Economic Development and Export Growth, p. 19.
27
28
Proceedings of a General Public Meeting to Discuss the Income Tax Ordinance, 20
September 1926, in TNA CO 795/12/5.
Once the mining companies began to earn a profit during the 1933/34
financial year, they became the primary payers of income tax.29
The taxation of mining companies was a politically charged issue in
Northern Rhodesia from the 1930s onwards, owing both to the settle-
ment reached with the British South Africa Company and to double tax-
ation relief. These two factors limited the amount of revenue the colony
could collect from mining companies, and became a matter of consider-
able controversy as demand for government revenue increased during the
1930s and 1940s.
When the BSA Company ceded its administrative responsibilities for
the colony to the British government in 1924, it retained rights to the
territory’s minerals.30 These rights allowed the BSA Company to charge
royalties of 2 per cent of the value of the copper produced from Northern
Rhodesian mines when the cash price of copper was less than £55 per
long ton on the London market, rising on a graduated scale when the
price was above that level. For income tax purposes, royalties were included
in the cost of production, and were payable on all copper produced rather
than just on profits.31
In addition, neither of the two major copper companies operating in
Northern Rhodesia had their headquarters in the colony. As their profits
were subject to income tax in both Northern Rhodesia and the United
Kingdom, they were eligible for relief from double taxation under Brit-
ish tax law. Under this legislation, Northern Rhodesia received tax at
half the United Kingdom rate, so long as that rate was higher than that
of Northern Rhodesia. The same legislation applied to the railway and
the BSA Company.32 Roberts describes the combination of double tax
relief and royalties as a ‘drain on the mineral wealth’ of Northern
Rhodesia.33
The initial passage of the income tax in Northern Rhodesia in contrast
to Kenya is due largely to this difference in structure. There were a limited
number of individual settlers liable to pay the tax with its high abatement,
and the companies it targeted were eligible for double taxation relief and
had little incentive to object. This was not true when the scope of the tax
was extended in 1926. The 1926 amendment reduced the minimum
income needed to be liable to the tax, which would thereby affect a larger
number of taxpayers. Northern Rhodesia’s settlers raised many of the
same objections to the amended income tax ordinance that Kenya’s settlers
29
30
31
Pim and Milligan, Report on Northern Rhodesia, pp. 135–6.
32
Ibid., p. 124.
33
Roberts, History of Zambia, pp. 192–3.
had used to oppose the 1921 income tax. They argued that the income tax
represented too severe a drain on the incomes of British settlers who, as a
member of the Broken Hill Political Association put it, ‘are striving to set
the affairs of this outpost of Empire on the high plane traditional to all
dependencies of the British Crown’.34 Settlers argued that the imposition
of income tax would dissuade new settlers from coming to Northern
Rhodesia and hinder the colony’s economic development, observing with
enthusiasm that the Kenya income tax ordinance had been abandoned
when ‘met with resolute and united opposition of the elected members of
the Kenyan Legislative Council’.
Like the settlers in Kenya, they argued that additional taxation should
not be imposed without corresponding concessions of political authority
to unofficial members of the Legislative Council. Opening the Broken Hill
meeting, one Northern Rhodesian settler was met with applause when he
said ‘I have heard it argued that we have no right to expect the British
taxpayer to carry a portion of our burden. To this I must emphatically reply
that the burden is not entirely ours until we take over the government of
the territory, until settlers have the majority in the Council.’35 However,
they were unable to force the colonial administration to abandon the tax
as the Kenyan settlers had done.
Collective action and colonial taxation

Why Kenya’s settlers should be more successful in shaping colonial policy
to their own ends is at first glance difficult to understand. Both the
Advisory Council in Northern Rhodesia and the Legislative Council in
Kenya retained official majorities until after World War Two. In neither
case could settlers elected to the colony’s legislative body out-vote mem-
bers of the colonial administration, and yet settlers in Kenya appear to
have exercised much greater political influence throughout the inter-war
years. This is largely because the structure and origins of Kenya’s settler
community were far more conducive to political organization than was
the case in Northern Rhodesia.
The BSA Company had never viewed the introduction of European
settlers as central to the economic development of the territory, as the
34
This statement was made in 1926, when proposed amendments to existing income
tax legislation revived the controversy surrounding the tax. W. N. Watson, Secretary of the
Broken Hill Political Association, to the Secretary of State for the Colonies, 25 September
1926, in TNA CO 795/12/5.
35
Opening speech by G. G. Norris, ‘Report of the proceedings of a general public meet-
ing held at Broken Hill in Northern Rhodesia to discuss the Northern Rhodesia Income
Tax Ordinance’, 20 September 1926, in TNA CO 795/12/5.
early governors of Kenya (notably Sir Charles Eliot) had done.36 The im-
perial government was also sceptical of any attempt to encourage settle-
ment by Europeans, believing that settlers would find it difficult to earn a
living and would look to the company for relief. This rather ambivalent
policy meant the first settlers were, as Gann puts it, ‘mostly adventurous
amateurs’ including former BSA Company employees, as well as poor
migrants from Southern Rhodesia and South Africa, where the combina-
tion of mining and aggressive settlement policies had increased land
values.37 Political organization within this comparatively smaller and
poorer group emerged slowly, and its development was interrupted by the
outbreak of World War One.38 Settlers were concentrated along the rail-
way and near the three principal towns (Livingstone, Lusaka, and Broken
Hill), which should have allowed them to communicate relatively easily.39
However, they often lacked leadership: the powerful among Northern
Rhodesia landowners, including the Duke of Westminster, Lord Winter-
ton, and Lord Wolverton, were not resident in the territory. As Gann
notes ‘there was no one amongst them comparable to Lord Delamere in
Kenya, who came out to the new country in person, engaged in a good
deal of agricultural development work, and invested comparatively large
sums in the process’.40
A very different settler community emerged in Kenya. Early settlement
schemes had emphasized that new settlers needed to bring significant
capital with them in order to establish profitable agricultural enterprises
on undeveloped land, and Kenya largely attracted British settlers of
middle- and upper-class backgrounds.41 Kennedy writes that ‘a popular
adage in British Africa held that Kenya was the officers’ mess and Rho-
desia the sergeants’ mess among white settler colonies’.42 Political organi-
zation began just a few years after the colonial administration began to
encourage settlement, and soon exercised considerable influence over
policy in the territory. By 1903 settlers had formed the Planters’ and
Farmers’ Association, which was renamed the Colonists’ Association in
1904. Though the initial purpose of the association concerned agricul-
tural exports, Bennett observes that ‘it was not long before it was voicing
36
Eliot, East Africa Protectorate, pp. 188–9. For more detail on the perceived role of
settlers in the economic development of East Africa, see Wrigley, ‘Patterns of Economic
Life’, pp. 211–21.
37
38
For more detail, see ibid., pp. 154–9.
39
Baldwin, Economic Development and Export Growth, p. 17.
40
Gann, Birth of a Plural Society, p. 140.
41
Kennedy, Islands of White, p. 6.
42
Ibid., p. 92. ‘Rhodesia’ here refers to Southern Rhodesia; Northern Rhodesia’s settlers
were considerably less well off.
political demands’ and raising ‘the usual cry of “no taxation without rep-
resentation” ’ in pressing for the establishment of a Legislative Council.43
Though the Association soon split into a number of smaller local groups,
these were reunited in 1911 in the formidable Convention of Associa-
tions. According to Bennett, the Convention served as a ‘second chamber’
to the Legislative Council, which had first met in 1907.44
The encouragement of settlement by Europeans with relatively large
outside incomes increased in the soldier settlement scheme pursued after
World War One, which Kennedy describes as probably ‘the single most
significant event in the shaping of the white settler community’.45 The
scheme required that potential settlers possess £1,000 (and later £5,000)
in savings and an annual income of £200, requirements which ‘effectively
excluded the common run of immigrant’.46
In his foundational work on the problems of collective action, Mancur
Olson argues that particularly in smaller groups, ‘if there is some quantity
of a collective good that can be obtained at a cost sufficiently low in rela-
tion to its benefit that some one person in the relevant group would gain
from providing that good all by himself ’, then the collective good is likely
to be provided.47 Among Kenya’s settlers there were a comparatively large
number, including Delamere, who had a significant financial interest in
avoiding any tax based on income. It was these settlers who led the anti-
income tax campaign in 1921. In this case, avoiding additional taxation
can be considered a collective good for the European (as well as Asian)
communities, even if bad for the colony as a whole.48 Bates has argued
that European settlers in Kenya also acted collectively to influence other
areas of colonial policy, particularly land, labour, transport, and agricul-
tural marketing.49
It is likely that had the income tax succeeded in Kenya it would have gener-
ated more revenue from individual taxpayers than the income tax in North-
ern Rhodesia since the population liable to tax was both larger and probably
wealthier. The 1931 census in Kenya concluded that in March of that year the
European population was 16,812 while the Asian population was 57,135.50
43
Bennett, ‘Political Organization in Kenya’, p. 113.
44
Ibid., p. 114.
45
Kennedy, Islands of White, p. 53.
46
Ibid, p. 57.
47
Olson, Logic of Collective Action, p. 23.
48
Olson observes that ‘there is no necessity that a public good to one group in a society
is necessarily in the interest of the society as a whole. Just as a tariff could be a public good
to the industry that sought it, so the removal of the tariff could be a public good to those
who consumed the industry’s product.’ Ibid., p. 15, n. 22.
49
Bates, Political Economy of Rural Africa, pp. 61–91.
50
Kucynzki, Demographic Survey, Vol. 2, p. 148. Population figures from before 1945
should be treated as estimates only.
Northern Rhodesia reported a European population of 13,305 in 1931 and

an Asian population of 176. A large proportion of the Europeans reported in
Northern Rhodesia in 1931 were recent arrivals who had come into the coun-
try to work on the rapidly expanding copper mines. Just three years earlier, in
1928, the European population had been 7,536 and by 1932 it had fallen
again to 10,553.51
In neither colony did tax reform efforts succeed in resolving the fiscal
crises, even with the contribution made by the income tax and Northern
Rhodesia. In Kenya, not only did the income tax fail, but the existing
flaws in the system of collection and enforcement of African taxation
methods meant that increasing the rate of hut and poll tax did little to
increase revenue collections. The limited success of these policies was also
due to the fact that the push for reform was relatively short-lived. The
economic recovery of the late 1920s in both colonies diverted the atten-
tion of both administrations away from tax reform and towards the ex-
pansion of infrastructure and encouraging economic development.
Customs revenue increased dramatically and both colonies made exten-
sive expenditure commitments, taking on new debt to fund public works
projects and expanding the administrative establishment. During this
brief period of abundant customs revenue, revision of direct tax was a low
priority. This would change dramatically during the Great Depression of
the 1930s.
Who should pay? Dividing the tax burden, 1929–37

Precisely who should sacrifice in order to compensate for the decline in
customs tariff revenue during the Depression was a potentially explosive
political issue through the 1930s. Some, particularly European settlers,
believed that the expenditure commitments made by colonial adminis-
trations during the late 1920s were excessive and that it was the admin-
istrations themselves which should balance the budget by reducing their
expenditure, particularly the salaries of European staff. Settlers blamed
the inability of the colonial administration to balance its budget on the
administration itself, particularly its size and expense.52 Lord Francis
51
Ibid., p. 416. Comparatively few members of the European population of Northern
Rhodesia retired in the territory. Deane, Colonial Social Accounting, p. 20.
52
This criticism of the colonial administration was somewhat ironic given that much of
the increase in administrative expenditure had often been at the request of the settlers
themselves. For example, in 1918 a member of the Northern Rhodesia Advisory Council
moved that where possible, the 88 African clerks employed by the colonial administration
should be superseded by (more expensive) returning European soldiers. Northern Rho-
desia, Proceedings of the Advisory Council, 28 September to 3 October 1918, p. 13.
Scott said at a 1933 meeting of the unofficial representatives of Tangan-

yika, Kenya, and Uganda that the reason for the meeting was, as the
Times put it,
the grave dissatisfaction felt with East African governments’ handling of the
financial situation during recent years. No attack was intended on the civil
service but it was essential to reduce the cost of administration to the cap-
acity to pay. Increased taxation at this stage would only retard development.
The income tax report proposal was shortsighted and showed how com-
pletely out of touch with East African affairs were the rulers in England.53
Many in this group also felt that Africans were taxed below their capacity
to pay and that they should contribute additional revenue.54 European
communities often argued that they should be taxed as little as possible
because, as Pim put it with regard to Kenya, ‘they believe that the agricul-
tural progress of the colony is mainly due to their efforts and that they are
entitled to all the assistance that can be given them, either to secure the
welfare of the industries in which they are interested, or to secure the
amenities for themselves and their families to which they have become
accustomed’.55 On the other side, colonial administrators, Africans, and
influential external observers believed that European and Asian commu-
nities had been taxed too lightly thus far and should pay a larger share of
what was needed to maintain financial self-sufficiency.
This was a particularly contentious issue in Kenya. After the aban-
donment of the income tax in Kenya in 1922, Kenya’s non-African
population shouldered a very low proportion of the tax burden through-
out the inter-war period. Lord Moyne’s report noted in 1932 that the
non-African population in Kenya was not only taxed lightly compared
to the African community, but also compared to most other countries,
where taxpayers had been forced to add to already heavy tax burdens
during the Depression. In Kenya, however, ‘the resource of direct tax-
ation in some degree proportionate to the means of the taxpayer is
therefore at present practically untapped, and the budgetary balance
could be restored by a relatively low tax on incomes’.56 In response to
Lord Moyne’s observations as well as its continuing financial difficulties,
Kenya once again attempted to introduce an income tax in 1932. Euro-
pean and Asian communities raised the same objections to the proposed
1932 taxes as they had in 1921. A petition printed in the East African
53
‘East African Settlers’ Conference—Complaints against Colonial Office’, The Times,
27 September 1932.
54
55
56
Lord Moyne, Report on Certain Questions in Kenya, p. 59.
Standard in March 1933 (to be sent to the Secretary of State) proclaimed

that ‘the Secretary of State will find himself faced by a protest as solid as
any that has ever been made by a young country compelled on too many
occasions in its brief history to take its grievance to the feet of final author-
ity’. The petition repeated the argument made in 1921, that an income tax
was inappropriate for a country like Kenya and would hinder its economic
progress. It added, and this was perhaps the central reason for objections
to the income tax, that farmers were heavily in debt due to the depression
in the market value of farming and plantation interest, and the imposition
of an income tax ‘would compel creditors to call in amounts owing’.57
Under pressure from the settler community, the income tax was once again
abandoned by the colonial administration in 1933, which elected instead
to try alternative forms of taxation to make up the revenue shortfall. A
dispatch from Secretary of State Cunliffe-Lister to Governor Byrne of
Kenya argued that the non-African communities of Kenya needed to con-
tribute additional revenue if Kenya’s financial position was to be improved,
but that ‘where the choice lies between alternative means of taxing particu-
lar sections of the community that method is to be preferred which is the
more acceptable to those upon whom the tax is to be levied’.58 One of the
alternative measures taken was a levy on official salaries, which caused the
increased contribution shown in Figure 5.5.
On its third attempt in 1937, the colonial administration of Kenya was
finally able to impose an income tax. Many of the same objections and
protests were raised as before, including a high-profile court case against
Josselyn Victor Hay, the Earl of Erroll, who refused to pay his income tax
on the grounds that the Legislative Council had no legal right to impose
it.59 Following previous cases making the same argument, the Supreme
Court of Kenya ruled against Lord Erroll and forced him to pay the
income tax he owed (which the Kenyan administration ultimately seized
from his military pay).60 Despite Lord Erroll’s high-profile protest, how-
ever, an income tax was successfully imposed, but only with significant
concessions. Racial divisions in the contributions to direct tax revenue
remained evident.
57
‘Income Tax Petition’, East African Standard, 8 March 1933.
58
Dispatch from Sir Philip Cunliffe-Lister, Secretary of State for the Colonies, to Gov-
ernor Joseph Byrne of Kenya, 7 June 1933. Printed in full in The Times, 15 June 1933, p.
13.
59
The arguments made in this case were essentially the same as those in Commissioner of
Income Tax v. Gurandittamal Kanayalal in 1922, cited above. Lord Erroll is best known
today for being the victim in a notorious unsolved murder case in 1938. His life and death
are vividly portrayed in several popular histories of Kenya’s ‘Happy Valley’. The best known
is Fox, White Mischief, which was made into a film in 1987.
60
For more detail on the case, see correspondence in KNA AG/39/335.
80%
70%
60%
50%
40%
30%
20%
10%
0%
1929 1930 1931 1932 1933 1934 1935 1936 1937
Kenya N. Rhodesia
Fig. 5.5. Percentage of direct tax revenue paid by non-Africans, 1929–37

Source: Calculated from Plewman et al., Report of the Taxation Enquiry Committee, Appendix B; North-
ern Rhodesia, Financial Reports (1929–37).
The racial divisions of the tax system also complicated already con-
tentious issues of entitlement to services according to tax contributions.
Administrators regularly found themselves attempting to define whether
particular minority populations should be classed as ‘native’ or ‘non-
native’ for the purposes of taxation. The Isaq Somali community, for
example, objected to its classification in the 1936 Non-Native Poll Tax
as ‘other Non-Native’ as opposed to ‘Asian’, and demanded to pay the
higher Asian tax rate.61 The Isaq Somalis had long attempted to escape
classification as ‘natives’ for purposes of labour and judicial legislation.
They had officially been declared non-natives in 1919, but were still
treated as natives under some colonial legislation such as the Native
Authority Ordinance and the Registration of Domestic Servants Or-
dinance. Up to 1936, the Isaq Somalis had paid the same tax rate as
Asians, which, ‘to them, was a significant vindication of their claims to
equality of status’.62
61
Moyne, Report on Certain Questions in Kenya, p. 30. For a detailed account of this
case, see Turton, ‘Isaq Somali Diaspora and Poll-Tax Agitation’.
62
Turton, ‘Isaq Somali Diaspora and Poll-Tax Agitation’, pp. 327–8.
Other communities made similar claims. In May 1927 the Kenyan

Treasurer wrote to the Attorney General asking whether Abyssinians were
‘eligible’ to pay non-native tax, noting that ‘the Abyssinians in North
Kavirondo District have expressed willingness to pay non-native poll tax
but state that it is not the custom of Abyssinians to pay Native Hut and
Poll Tax’.63 This letter followed a similar enquiry earlier that same year
from the Italian consul.64 Debate about this question was to embroil the
central administration for the next two months. The Colonial Secretary,
the Chief Native Commissioner, and the Senior Crown Counsel all con-
cluded that while they considered Abyssinians to be natives, those who
wanted to voluntarily pay non-native poll tax instead of native hut and
poll tax could do so.65 The Crown Counsel argued that acceptance of a
voluntary payment of non-native poll tax ‘will not be a recognition of a
right on the part of an Abyssinian to be treated as a non-native for the
purposes of the Native Registration Ordinance, Native Arms Ordinance,
etc. Probably this will be the next claim to be made.’66
These debates sound trivial on the surface and involved relatively small
numbers, but they provide an analogue for Kenya’s politics at the time, in
which entitlements to resources and rights were based on racial classifica-
tions which were often inadequate to describe a territory which was rap-
idly changing in terms of its population and economic structure. With its
limited resources, the colonial administration was alarmed by any pros-
pect of expanding services and political rights to additional communities.
It also feared the prospect that such campaigns would encourage national-
ist movements among the African majority.
For most of the population, however, there was no ambiguity about
their place within the tax system. Throughout the years of the Great
Depression, the taxation of Africans relative to that of other groups
became increasingly controversial. Former colonial officials were among
those criticizing the reliance of colonial administrations on taxes paid by
Africans. William McGregor Ross wrote in 1927 that ‘the White Man’s
Burden is to-day being borne manfully—but by black men’.67 Groups of
Africans also emerged to challenge the status quo, cutting their political
teeth in the fight over the allocation of resources between different
communities.
63
Kenya Treasurer to Attorney General, 9 May 1927, in KNA AG/39/170.
64
Royal Italian Consul to Colonial Secretary, 27 April 1927, in KNA AG/39/170.
65
Acting Colonial Secretary to Attorney General, 19 May 1927; Chief Native Commis-
sioner to Colonial Secretary and Attorney General, 13 June 1927; Senior Crown Counsel
to Colonial Secretary, 21 June 1927, in KNA AG/39/170.
66
Senior Crown Counsel to Colonial Secretary, 25 June 1927, in KNA AG/39/170.
67
African taxation in the 1930s

Differences in the extent to which colonies were able to tax the non-Afri-
can population (including both settlers and international corporations)
resulted in considerable differences in each colony’s dependence on the
direct taxation of Africans. Those who could collect a larger share of rev-
enue from other sources spent less time refining the rates and collection
of hut and poll taxes in order to raise additional revenue. In Southern
Rhodesia, for example, the rate of the poll tax initially imposed in 1904
(£1 per year with an additional 10s for each wife after the first) remained
unaltered by the time Lord Hailey’s revised African Survey was published
in 1957.68 In real terms, therefore, the rate of the poll tax had decreased
steadily through the inter-war period. Southern Rhodesia was able to
avoid increasing African direct taxation largely because it was able to raise
the bulk of its revenue from other sources, principally the income tax on
individuals and corporations levied from 1918, even during downturns
when tariff revenue was declining.69 Similarly, Northern Rhodesia was less
dependent on revenue from this source than Kenya because it was able to
impose a heavier tax burden on the non-African community, particularly
mining companies, from the beginning of the inter-war period. However,
in most of Africa, African taxation was increased during the early 1920s
in order to pay for the development projects undertaken during that
decade.70
The low levels of taxation imposed on non-African communities in
Kenya throughout the inter-war period meant that it was particularly
dependent on hut and poll taxes in its attempts to maintain a balanced
budget. With rising customs tariffs during the late 1920s its importance
had been steadily declining. This trend was briefly reversed after 1929;
hut and poll tax represented 16 per cent of the total revenue in 1929, but
this had increased to 18 per cent the following year.71 The comparatively
heavy tax burden placed on Africans in Kenya was acknowledged within
the Colonial Office, where in 1937 an official observed that ‘if Kenya’s
system were introduced into West Africa it “would provoke an insurrec-
tion as surely as night follows day”’.72 Figure 5.6 compares hut and poll
tax as a percentage of total locally collected revenue in Kenya with
68
Lord Hailey, African Survey, p. 656. It should, however, be noted that, as Van Onselen
observes, the £1 per annum tax rate was one of the highest in the region. See Van Onselen,
Chibaro, p. 95.
69
70
71
Calculated from Kenya Colony, Blue Books, 1929–30.
72
Minute by J.F., 11 April 1937, in TNA CO 533/482/38173, cited in Van Zwanen-
berg, Colonial Capitalism, p. 102.
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
1929 1930 1931 1932 1933 1934 1935 1936 1937
Kenya N. Rhodesia
Fig. 5.6. Hut and poll tax revenue as a percentage of total, 1925–37
Source : See Figure 5.5.
revenue for Northern Rhodesia before and after the onset of the
Depression.
As in previous crises, colonial administrations attempted to reform Af-
rican taxation after the economic downturns of the late 1920s and early
1930s. In this case, however, the goal of reforms was not solely to increase
revenue. It was also to minimize hardship for African taxpayers worst af-
fected by the Depression. Though some members of the settler commu-
nity felt that the taxation of Africans should be increased to help alleviate
the deficit, colonial administrators were aware that the economic crisis
had made it increasingly difficult for some Africans to pay the tax due. As
Pim observed in Kenya in 1936:
So long as wages remained at such a level that the hut and poll tax could be
raised by a month’s work outside the Reserve, or by the sale of a head of large
or small stock, the collection of the tax presented no special difficulties.
When, however, wages fell to Sh.8 a month or less, the price of stock was
halved (if indeed it could be sold at all) and the proceeds from any agricul-
tural produce were similarly reduced, the situation was changed. It was ag-
gravated by a succession of years of drought, total or partial, and psychological
difficulties were added by the growth of new wants among the younger
members of the more advanced tribes.73
73
As the tax burden on Africans increased either through declining incomes

or increasing tax rates, so did the level of non-payment, either due to eva-
sion or difficulty raising sufficient funds.74 Though the accumulation of
direct tax arrears had occurred in previous economic downturns, the level
of non-payment during this crisis was significant enough for administra-
tors to worry that ‘there are undoubtedly areas in which arrears are accu-
mulating to a degree which is in danger of affecting the traditional native
attitude towards tax obligations to the Government’.75
Further, the need for revenue meant that just as the tax became more
difficult to pay, district officers were required to enforce the collection of
tax more closely.76 But the bureaucratic limitations of the existing tax col-
lection system made this a difficult and uncertain task. Tax collection
procedures in the 1930s had changed little from their initiation in the
period before World War One.77 Although they had recognized the prob-
lems in the tax collection system they had established, colonial adminis-
trators still relied on it in order to adjust tax collection to the ability to
pay. A 1934 committee in Northern Rhodesia recommended against a
general reduction in the rate of African poll tax on the grounds that ‘native
employment and the economic situation generally may continue to im-
prove and the Committee considers that the exercise of reasonable leni-
ency by District Officers in pressing for arrears of tax and the provision by
Government of opportunities to discharge the liability [i.e. through
labour on public works] should suffice to mitigate hardship for the time
being’.78 In Kenya, Pim also observed that district officers had been given
wider powers of exemption during the Depression, resulting in ‘remark-
able differences in the percentage of exemptions in different districts’. For
Central Kavirondo, for example, the Provincial Commissioner estimated
that out of every 100 taxes (hut or poll), 65 were paid, 23 were exempted,
and of the remaining 12 there was no record of payment. In North Kavi-
rondo, 21,100 exemptions were granted in 1934, while 57,750 paid the
tax.79
There were ample opportunities for taxpayers to evade the tax. Accord-
ing to Van Zwanenberg, methods of evasion included borrowing tax re-
ceipts from other taxpayers, leaving the place of employment just before
the collector arrived so that the taxpayer would be difficult to trace,
74
Tignor, Colonial Transformation, p. 191.
75
Northern Rhodesia, Report of the Taxation Committee, p. 14.
76
Van Zwanenberg, Colonial Capitalism, p. 83.
77
Ibid., p. 82. For more detail on tax collection procedures before World War One, see
Chapter 3.
78
79
moving across territorial borders, and bribing tax counters to have their
names omitted from the count, to name just a few.80 In addition, simple
error could also lead to inaccuracies in tax rolls and hut counts. These
inaccuracies hindered both attempts to better enforce tax payment as well
as, later in the decade, attempts to make the tax more equitable.
Within the very limited administrative capacity of the colonial govern-
ment, closer enforcement of tax payment took two forms: the collection
of some form of in-kind payment, most commonly labour, in lieu of cash,
and criminal prosecution. The former was controversial within the col-
onies themselves and particularly in Britain, where it looked very much
like forced labour. The latter increased dramatically during this period,
though it was viewed as counterproductive since it both failed to generate
the lost revenue and also incurred the additional costs of imprisonment
and criminal prosecution. However, with tax labour becoming less toler-
ated by the Colonial Office in London, it was increasingly used to enforce
payment of the tax. Figures 5.7 and 5.8 show the increase in prosecutions
for non-payment of tax, both in aggregate and as a percentage of total
criminal prosecutions during the early 1930s. This level of prosecution
for non-payment of tax is relatively high when compared with other Afri-
can colonies. In 1933, the number of people prosecuted for tax offences
in Kenya (11,837) is approached only by that of Nigeria (10,692), the
population of which was more than six times larger.81 Northern Rhodesia,
with 7,686 prosecutions for tax offences in that same year, was lower than
Kenya or Nigeria, but still much higher than Uganda (4,036) or Tangan-
yika (6,251) which had substantially larger populations.82
Criminal prosecutions for non-payment of tax had political costs which
worried colonial administrators. The earlier concerns about the potential
for tax revolts which had helped shape the system of tax collection in the
colonies had not disappeared in the intervening years, and colonial offi-
cials feared that an increasing tax burden along with harsher punishment
for repayment would lead to rebellions which would require costly mili-
tary and police action to stop. The potential for such a rebellion was con-
firmed by events in other colonies, such as the riots in Nigeria in December
1929, which a Special Commission appointed in February 1930 deemed
to be the result of increased taxation.83
80
81
In 1931, Nigeria’s population was estimated to be 19,833,462, while Kenya’s was
3,040,850. Board of Trade, Statistical Abstract 1928–37.
82
Nigeria, Blue Book 1935; Uganda, Blue Book 1935; Tanganyika, Blue Book 1935.
83
‘The Nigerian Riots—Report of the Special Commission’, The Times, 25 August
1930, p. 9.
14000 30%
12000 25%
10000
20%
8000
15%
6000
10%
4000
2000 5%
0 0%
1931 1932 1933 1934 1935 1936 1937 1938
Convictions for hut and poll tax offences

Percentage of total convictions
Fig. 5.7. Kenya hut and poll tax convictions

Source: Kenya Colony, Blue Books, 1931–38.
9000 60%
8000
50%
7000
6000 40%
5000
30%
4000
3000 20%
2000
10%
1000
0 0%
1929 1930 1931 1932 1933 1934 1935 1936 1937 1938
Native tax offences

Percentage of total convictions
Fig. 5.8. Northern Rhodesia poll tax convictions

Source: Northern Rhodesia, Blue Books, 1929–38.
As a result, colonies attempted to reform African taxation during the

early 1930s, using similar strategies to formalize a more equitable tax
burden across different segments of the population within the limitations
of the existing tax system. The most important of these was an attempt to
tailor tax rates more precisely to the incomes of taxpayers. The Colonial
Office had recognized the need for such a step several years earlier. The
memorandum published by Lord Passfield during his tenure as Secretary

of State for the Colonies had argued that direct taxation ‘ought to be as-
sessed in proportion to the ability to pay of each family household’ and
that the ‘levy of direct taxation on the native should be definitely limited
by his capacity to pay such imposts without hardship’.84 Within the col-
onies, administrators were aware that a flat rate tax imposed very different
burdens on taxpayers of different incomes. This had become increasingly
true as the production of cash crops and wage labour had expanded, cre-
ating increasing economic inequality between regions with unequal access
to local markets and railways.
However, these attempts were hindered by the limited information
colonial administrations had on the incomes of those they were trying
to tax. This lack of information had been central to the initial adoption
of a flat rate tax, and had changed little since the first decade of colo-
nial rule. When Sir Alan Pim visited Northern Rhodesia in the 1930s,
one of his complaints about its financial system was the lack of effective
record-keeping and documentation in the collection of African tax. He
observed that ‘tax registers are checked by administrative officers on
tour, but shortage of staff and other causes have led to insufficient tour-
ing and mobility of labour greatly impairs the accuracy of the registers.
There can be little doubt that defaulters’ lists contain large numbers of
names and persons who have either died or permanently left the
district.’85
Perhaps the most compelling evidence of this, however, is the difficulty
with which colonial administrations gathered information for the Pim
Commission report. In Kenya, for example, the central administration
wrote to each Provincial Commissioner in the territory at Pim’s request
asking for each district to provide the numbers of taxpayers who paid and
were exempted from hut and poll tax in 1934, the total receipts for each
tax in that year, the number of people normally absent from the district,
and the proportion of the population regularly employed outside the dis-
trict.86 The responses to this request illustrate that the central administra-
tion’s lack of information was due in many cases not to the fact that such
information did not exist but to the fact that district administrations
lacked the manpower to compile it. The District Commissioner of North
Kavirondo replied to the Provincial Commissioner’s request by stating
that ‘it is possible to arrive at most of the figures asked but is it realized
that it will mean four separate counts through every single sheet of our
84
Lord Passfield, Memorandum on Native Policy, p. 13.
85
86
R. Platt for Colonial Secretary to Provincial Commissioners, 1 November 1935, in
KNA PC/NZA/2/1/88.
Registers and the recall of Hut Counters now in the field to do so?’87 The
District Commissioner of South Kavirondo concurred, arguing that he
would have to withdraw all twenty-eight hut counters to compile the in-
formation.88 In response to such complaints the Provincial Commissioner
ordered that the information requested should be supplied as far as pos-
sible without recalling hut counters. If data on the entire district was un-
obtainable, an average sample of one location should be given.89 The
Kericho District Commissioner stipulated that the proportions of hut to
poll tax he submitted were estimates only.90 Furthermore, despite Pim’s
complaints, this situation does not appear to have improved later in the
colonial period. Proposals in Northern Rhodesia to update Pim’s analysis
a decade later were abandoned in part due to lack of resources and staff
available to compile the necessary information.91
Unable to collect information on individual taxpayers and their in-
comes, colonies resorted to the regional differentiation of tax rates on the
assumption that Africans living in areas close to the railways or opportu-
nities for wage labour could afford to pay a higher rate than those living
in more remote regions. In 1935, Kenya imposed lower rates of tax for
twenty different areas, varying from 10s in seven areas (including the
Masai areas), 9s in two areas, 8s in seven areas, and 6s in three areas, to as
low as 3s in Turkana (see Map 5.1). Pim believed that these changes
should have been made earlier but acknowledged that ‘the general finan-
cial position of the colony makes reduction in taxation very difficult’.92
In Northern Rhodesia, as in Kenya, few changes were made to the tax
system during the years of economic downturn.93 Collections were re-
duced and, as shown in Figure 5.8, prosecutions for non-payment in-
creased considerably from 1931, when the closing of several of the newly
constructed copper mines led to a massive increase in unemployment.
When the mines reopened in 1933, however, the recovery of employment
opportunities resulted in only a marginal increase in collections, with the
revenue in 1934 only increased by £4,000 from 1933, despite an expansion
87
DC North Kavirondo to PC Nyanza, 9 November 1935, in KNA PC/NZA/2/1/88.
88
DC South Kavirondo to PC Nyanza, 21 November 1935, in KNA PC/
NZA/2/1/88.
89
PC Nyanza to District Commissioners of Kavirondo Districts, 10 December 1935,
in KNA PC/NZA/2/1/88.
90
DC Kericho to PC Nyanza, 15 November 1935, in KNA PC/NZA/2/1/88.
91
See correspondence in NAZ SEC1/758 and MF1/3/62.
92
93
The rate of tax for Mwinilunga district decreased from 12s 6d to 7s 6d, and the rate
for Sereneje district reduced from 12s 6d to 10s, the rate applicable to the Northern Prov-
ince to which this district had recently been transferred. Pim and Milligan, Report on
Northern Rhodesia, p. 113.
Northern Frontier Province

Turkana
West Suk
Elgeyo
Samburu
Trans-Nzoia
North Uasin Baringo
Kavirondo Gishu
Laikipia North
North
Nandi Meru
Nyeri
Nyeri
Kisumu
Central Kavirondo Nakura
Kericha S. Nyeri
S. Nyeri
South Embu
Kavirondo ForeHall
Fore Hall
Kiambu
Thika
Nairobi
Masai Tana
Machakos Kjhu River
Lamu
Kilifi
Teita
Mombasa
Digo
3s 9s 12s
8s 10s 13s
Railway
Map 5.1. Rates of tax by district in Kenya, 1935

Source: Created using Map Info, Kenya Colony, Blue Book (1935).
of production by the mines, which increased their numbers of African

employees from 7,190 in 1933 to 13,808 in 1934.94 At the end of 1933,
the governor appointed a committee to enquire into the issue of taxation.
The Taxation Committee was charged with investigating ‘the effect of
existing taxation measures on various sections of the community’. Its
terms of reference stipulated that its proposals were not to involve any
sacrifice in public revenue.95 With regard to African taxation, the Com-
mittee found that in Northern Rhodesia, as elsewhere, ‘flat rates result in
taxation which is readily paid by some but may be a hardship to others’.
In particular, taxpayers in districts far from any market or opportunity for
employment found the existing rates ‘onerous’.96
In response to the Committee’s report, a series of important changes
were made to African taxation in Northern Rhodesia in 1935. The gen-
eral rate of tax was reduced to 7s 6d (from 12s 6d), while a graduated scale
of higher rates was imposed in centres of employment and areas where a
market existed for African produce. All districts away from the railway set
at 7s 6d except Fort Jameson, which was initially set at 10s (but later
lowered to 7s 6d). The rate was 10s in districts along the railway belt, 12s
6d in Livingstone, Broken Hill, and Ndola districts, and 15s in the mining
areas of Luanshya, Nkana, and Mufulira. Map 5.2 shows the distribution
of tax rates in the colony. From 1935 collection was based on residence
(defined as one month’s continuous stay) rather than domicile.97
The intent of these changes was to ease the burden imposed on poorer
taxpayers by collecting tax from them at a rate more in line with their
ability to pay. Some administrators also hoped that a more equitable tax
burden would reduce evasion and increase the revenue collected from the
tax in the long run. The Northern Rhodesia Taxation Committee, for
example, hoped that the reforms it suggested would allow the colony to
collect increased revenue from taxpayers who might be in lucrative em-
ployment away from their home districts and yet continue to pay tax at
the lower rate appropriate to the home district.98 In addition, colonial
administrations also hoped ‘that the general reduction in the rate of tax
would lead to an increase in the number of persons who would pay’.99
Like previous rate changes, however, the reforms of the 1930s had only
limited effects on overall tax collection. The increase in revenue from hut
and poll taxes after 1935 was only very slight, as shown in Figure 5.2. In
94
Berger, Labour, Race and Colonial Rule, appendix D.
95
96
97
98
99
Chengi
Abercorn
Mporokoso
Isoka
Kawambwa
Kasama
Luwingo
Fort Chinsali
Rosebery
Mwinilunga
Mpika
Lundazi
Solwezi Nkana Mufulira
Luanshya
Ndola Serenje
Balovale Fort
Kasempa
Mkushi Jameson
Broken Petauke
Kalabo Mongu Hill
Mumbwa
Lealui Mankoya
Feira
Lusaka
Namwala
Senanga
Mazabuka
Sesheke
Kalomo
Livingstone
7s 6d 10s 12s 6d 15s
Railways
Map 5.2. Poll tax rates in Northern Rhodesia by district, 1935

Source: Created using Map Info, Pim, Report on Northern Rhodesia, p. 114.
addition, it is difficult to know to what extent this slight increase in rev-

enue was due to economic recovery, more people paying the adjusted
rates, or an increasing population of taxpayers. On a larger time-scale,
Van Zwananberg notes that ‘the fact that the total value of African direct
taxation did not increase over these twenty years [1919–39] would indi-
cate considerable tax avoidance, especially as population was rising’.100
Differentiating the tax rate by region, while going some way towards
adjusting the tax rates to differences in income, did not take into account
inequalities within the districts themselves, which in some cases could be
100
substantial. Pim noted in Northern Rhodesia that ‘the new system cannot
be said to have established any close relation between the rate of tax and
the means to pay’. Rather, it had ‘given rise to certain inequalities such as
are inherent in any system of graded taxation when the units are as large
as the administrative districts of Northern Rhodesia or as varied as the
population of the big industrial centres’. On the Copperbelt, for example,
mine employees with an average wage of 25s per month should have been
able to easily afford a poll tax of 15s per annum. However, the mining
areas also contained people who were employed elsewhere or unemployed
who could not afford the 15s tax.101 For Kenya, Van Zwanenberg observes
that by the 1930s there had already developed considerable differences in
wealth within districts.102 Furthermore, other practices continued in
Kenya, such as the taxation of women and young men, which increased
the total tax burden on the African community, and were particularly
controversial.103
Taxation and African dissent, 1929–38

With their minimal impact on the tax burden of many Africans, these
reforms were insufficient to allow Kenya and Northern Rhodesia to escape
from the rising tide of African dissent during the 1930s, which was driven
in part by increases in the tax burden for some during a period of eco-
nomic hardship. For the first decades of colonial rule, African taxation
had been met with resistance not generally through collective protest, like
the income tax on Europeans and Asians, but more often by evasion at an
individual level. In this period, however, groups of Africans actively op-
posing the allocation of resources within the colonial state began to
emerge.
Opposition to taxation had been to some extent part of protests against
colonial administration in Africa from the beginning of imperial rule. As
Rotberg notes, ‘prophets capitalized upon the general unpopularity of
taxation and, in a few isolated but portentous instances, tribesmen actu-
ally offered physical opposition to tax gatherers’.104 In Kenya and North-
ern Rhodesia, some form of organized opposition to the rate and collection
of hut and poll taxes had occurred following changes to the tax rates
throughout the inter-war period. The proliferation of voluntary associa-
tions in colonies across Africa was also an attempt by Africans to have
more influence over the allocation of resources in the colonies. Educated
101
102
103
Ibid., p. 88.
104
Rotberg, The Rise of Nationalism, p. 73.
Africans, according to Rotberg, ‘imitated the settler example by forming

associations through which their pleas for reform, and for consideration,
could best be expressed’.105
In Kenya, both the differential rates of taxation between African and
immigrant communities as well as the abuse of certain collection practices
also led to disquiet among taxpayers and some who campaigned on their
behalf. The seizure of property from those who did not pay the tax was
one example. Distress of property in cases of default had been permitted
under the 1910 amendment of the 1903 Ordinance and from then on
cattle were regularly seized in payment of the tax. Van Zwanenberg notes
that ‘both the selling of stock and seizing it in lieu of payment were open
to very considerable abuse, including extortion and blackmail’. Archdea-
con Owen (of the Church Missionary Society and founder of the Kavi-
rondo Taxpayers’ Welfare Association) complained frequently of cases of
stock seized and sold before a distress warrant had been issued. These
claims were difficult to verify.106 Hut burning was another punishment for
failure to pay tax which aroused considerable anger both within Kenya
and in the metropolitan capitol. This method was abandoned in 1934
due to a political backlash in Britain.107
In the context of the economic deprivation of the Depression, these
practices led to a range of protests by Africans. The widespread agitation
led by Harry Thuku and his Young Kikuyu Association in 1921–22, for
example, was in part motivated by the increases in the tax rate the previ-
ous year.108 The aptly named Kavirondo Taxpayers’ Welfare Association,
which was initially founded to diffuse African protest but continued to be
a thorn in the government’s side for the remainder of the inter-war period,
kept taxation on its agenda along with other issues.109
Northern Rhodesia also saw the emergence of welfare associations. The
first of these was the Mwenzo Welfare Association, founded in 1923 by
Donald Siwale, David Kaunda (father of Kenneth Kaunda, later President
of independent Zambia), and Hezekiya Kawosa. By 1924, the Association
was protesting against the ‘heavy tax burden that the government had
forced rural Africans to bear’.110 However, the organization was short-lived
and achieved little. It was succeeded in 1930 by the Livingstone Native
105
Ibid., p. 115.
106
Van Zwanenberg, Colonial Capitalism, pp. 92–5.
107
Ibid., p. 97.
108
109
For more detail on the history of voluntary associations in Kenya, see Bennett, ‘De-
velopment of Political Organization’, pp. 118–30. For details on the Kavirondo Taxpayers’
Welfare Association, see J. Lonsdale, ‘Political Associations in Western Kenya’, in Rotberg
and Mazrui (eds.), Protest and Power, pp. 589–638.
110
Rotberg, Rise of Nationalism, p. 124.
Welfare Association, which inspired the formation of similar associations

at Ndola and Mazabuka, among other places. The agenda of these groups
was varied, but generally focused on the limited government services pro-
vided to Africans and their low standard of living, particularly in
towns.111
An even more significant example of collective opposition to the tax,
however, occurred on the Copperbelt in Northern Rhodesia in 1935. The
‘disturbances’, as they were called, sent waves of alarm across the Empire.112
On Wednesday, 29 May, the Provincial Commissioner of Central Prov-
ince reported to Lusaka that 1,000 Africans were attacking the compound
at Luanshya mine. Royal Air Force reinforcements had arrived from
Lusaka after African workers at Mufulira mine had gone on strike the
week before, but before they arrived in Luanshya, the Northern Rhodesia
Police fired in self-defence, killing six Africans and wounding several
others. Additional police were sent from Salisbury and Bulawayo, and
there were no further riots.113
The causes of the Copperbelt riots of 1935 were predictably complex,
and difficult to reconstruct. Morgan, for example, argues that griev-
ances over tax rates and wages did not directly cause the outbreak of vio-
lence; rather, ‘the disturbance might have arisen ultimately from the
breakdown of tribal authority among the Africans without anything to
take its place’.114 However, Morgan’s interpretation of the riots appears
to be in the minority. The disturbances occurred in the week after the
new tax rates described above were announced by the District Officer at
the Mufulira mine on 22 May. Out of the twelve causal factors listed by
the report of a commission appointed by the Secretary of State for the
Colonies to investigate the disturbances, three were related to the poll
tax, and included the increase of the tax rate in mining areas, the time
of year at which the new rates were announced (which gave insufficient
notice to taxpayers), and the manner in which the taxes were announced
in the Copperbelt. The other factors were: insufficient wages and ra-
tions; deductions from wages for equipment (boots, lamps, etc.); a large
number of unemployed in the Copperbelt; the treatment of African
workers; insufficient contact between District Officers and Africans in
mining compounds; the ‘breaking down of native custom and authority
111
For more detail, see ibid., pp. 124–34.
112
In 1936, for example, Pim cited the Northern Rhodesia riots along with the South-
ern Nigeria riots in recommending against increases in African taxation in Kenya. See Pim,
Report on Kenya, p. 40.
113
For a detailed account, see Russell, Report on Disturbances in the Copperbelt, pp. 8–11
and Rotberg, Rise of Nationalism, pp. 161–8.
114
Morgan, Official History of Colonial Development, Volume 1, p. 24.
by industrialization’; the Watch Tower Movement; and the Mbeni

Dance Society.115 Rotberg argues that ‘the strikers were, in general, dis-
satisfied . . . and the tax announcement had provided a catalyst sufficient
to occasion Northern Rhodesia’s first important industrial unrest’.116
Collective political action, whether in the form of voluntary associa-
tions or the strikes on the Copperbelt, was a relatively new development
in Kenya and Northern Rhodesia during the inter-war period. Why it
should have emerged during this period is difficult to say. One answer is
perhaps that growing inequality within African communities had made it
worthwhile to a sufficiently large number of individuals to want to reform
the tax rather than evade it, as was common practice, thus risking pros-
ecution, imprisonment, distress of property, or a range of other punish-
ments. Another possibility is that the attempts of the colonial
administration to enforce the tax more closely during the Depression
made evasion more difficult, though data on annual collections of revenue
do not suggest any significant decline in evasion. A third potential reason
for the emergence of collective action is that wage employment, the mar-
keting of cash crops, and education created interests and grievances which
cut across local communities and facilitated the coordination of a suffi-
cient number to gain some (albeit limited) influence.
*****
None of the strikes and protest movements which emerged during the
inter-war period led to any major change in colonial tax policy in Kenya or
Northern Rhodesia. However, the imperial government and colonial ad-
ministrations across the Empire perceived a potential threat in outbreaks of
unrest and the emergence of collective political action in the colonies. The
resulting anxiety led to two major changes in colonial policy: the first was
the broadening of colonial development policy to include increased govern-
ment provision of social services, rather than just infrastructure, and the
second involved the strengthening of local government organizations in
African areas, notably by the delegation of increasing financial responsibil-
ities to local authorities. These will be the subject of the next two chapters.
Changes in colonial development policy in the late 1930s represented
an attempt by both the imperial government and administrations in the
colonies themselves to alter fundamentally the principles on which the
fiscal organization of the Empire had been based up to that point. As this
chapter has shown, colonial fiscal policy through the pre-World War One
and most of the inter-war period was focused almost exclusively on the
115
Russell, Report on Disturbances in the Copperbelt, p. 4.
116
maintenance of a balanced budget through the various financial crises

which struck both colonies in the first few decades of their rule. These
crises were universally caused by economic shocks which either disrupted
the supply of imports or changed their value, causing a sudden decline in
customs tariffs. The volatility of customs revenue led to an increasing
emphasis on the need to maximize collections of direct taxation in order
to maintain a steady supply of revenue.
However, some communities were better able to avoid taxation than
others. Kenya’s settlers twice prevented the imposition of direct taxation,
largely due to the fact that they had among their number wealthy indi-
viduals for whom it was worth any effort to avoid a tax based on their
income. The relative social cohesion of Kenya’s settler community also
helped facilitate the collective protest which led the colonial government
to withdraw the income tax not just once but twice. This was perhaps a
collective win for the settler community, which continued to pay only
minimal direct tax until the late 1930s. However, it limited the amount
of revenue available to the colonial administration during a period of
severe financial crisis, requiring retrenchments of staff and reduction of
services. It also increased the relative importance of hut and poll tax rev-
enue, which could not be significantly reduced during the Depression
due to the colonial administration’s failure to raise funds from elsewhere.
Northern Rhodesia’s settlers were less able to act collectively to influ-
ence policy, and paid income tax from its first introduction in 1921. They
were in general poorer than Kenya’s settlers, and most of the income tax
was in fact paid by the mining companies which had begun large-scale
exploitation of the colony’s copper reserves in the late 1920s. However,
the precarious financial position of the colony, which relied entirely on
the price of copper to remain solvent, meant that African poll tax contin-
ued to be important. As in previous crises, the colonial administration
attempted to reform direct taxation in order to, on the one hand, distrib-
ute the tax burden more evenly and thus hopefully avoid unrest among
taxpayers and, on the other, increase revenue. Similar reforms were made
in Kenya.
In the end, the colonies achieved neither goal. In the context of the
Depression, when falling export prices led to lower wages and reduced
employment opportunities on commercial farms, the allocation of the
tax burden between indigenous and immigrant communities became a
fiercely contested issue. Van Zwanenberg argues that ‘the severity of Af-
rican taxation was a direct consequence of the financial needs of the
European infrastructure’.117 Colonial administrations therefore faced
117
increasingly organized resistance by Africans in forms they had previ-

ously only seen from minority immigrant communities. The greater
ability of Africans to act collectively, driven in part by greater inequality
within both African communities, represented the beginning of African
political activism at the national level and was seen as a potential threat
by colonial administrations.
The history of colonial taxation during this period reveals the extent
to which the Great Depression influenced not only the subjects of colo-
nial administrations, but also colonial governments themselves. The
fiscal impacts of the Great Depression made the revenue imperative even
more important in shaping the relationship of colonial administrations
to those living within their borders. Colonial officials faced increasing
demands for financial support while at the same time needing to raise
additional revenue from a population whose incomes had almost univer-
sally declined. This dilemma foreshadowed future political crises and
provided a strong signal that colonies would always struggle to pay their
own way. In this context, African and immigrant communities alike
competed with one another for greater services or lower tax, and per-
ceived inequities in the allocation of the tax burden were a major feature
in the emergence of political activism which became increasingly influ-
ential in the 1930s and 1940s.
6
The Failure of Africa’s ‘New Deal’?
My program, which I can only touch on these points, is based on

this simple moral principle—the welfare and soundness of a nation
depends first upon what the great mass of the people wish and need;
and secondly, whether or not they are getting it . . . I pledge
you—I pledge myself—to a new deal for the American people.
(Franklin D. Roosevelt, accepting the nomination for the presi-
dency of the United States, 1932)
There has . . . been projected into colonial policy some of the changed
outlook which has so strongly influenced the course of domestic politics
of recent years. It has placed a much more pronounced emphasis on the
functions of Government as an agency for the active promotion of
social welfare. The political issues which now engage the widest meas-
urer of public concern are the improvement of the standard of living,
the security of employment, or the expansion of the social services.
There is a general agreement that for these purposes the government
must exercise a degree of intervention in both the economic and social
life of the nation which would not have been accorded to it by an earlier
generation. (Lord Hailey, Native Administration and Political Develop-
ment in British Tropical Africa, p. 3)
The 1935 Copperbelt riots were among several serious outbreaks of unrest
in the colonies during the Great Depression. There were strikes and riots
in the West Indies in 1935, and then again in 1937–38, years which also
saw a cocoa hold-up in the Gold Coast by peasant farmers protesting low
prices. In 1937 there was trouble on sugar estates in Mauritius and serious
unrest in Mandatory Palestine.1 These events, while not large in scale by
international standards, were well publicized both within Britain and in-
ternationally, and seen by many as the beginning of collective resistance
to colonial rule in the tropical Empire. In its coverage of the Copperbelt
riots, the New York Times observed that ‘the natives appear to be effi-
ciently organized and it is believed that agitators connected with some
subversive movement are behind the strikers who are demanding consid-
erably increased wages because of the government’s raising of the poll tax
from ten to fifteen shillings’. The strike, it argued, was ‘not directed against
1
Constantine, British Colonial Development Policy, p. 229; Pearce, Turning Point in
Africa, pp. 17–20.
The Failure of Africa’s ‘New Deal’? 127
the company as much as against the government’.2 With regard to the

West Indies, David Morgan notes that ‘the disturbances attracted consid-
erable publicity in the popular press, like the Daily Express, and in the
weeklies, such as the New Statesman, where there was a fair amount of
lurid but critical reporting on conditions in the West Indies’.3 The emer-
gence of increasing numbers of organized welfare societies and other simi-
lar groups did nothing to ease the fears of officials that more organized
rebellions would emerge.4
Critics of imperialism argued that the strikes and protests of the
1930s were due to the hardship suffered by the indigenous population
of the tropical Empire during the Depression, as well as the limited
benefits they received from the economic recovery from 1935.5 W. M.
Macmillan, in an influential critique of colonial rule, argued that the
economic conditions of the West Indies foreshadowed the future of
Africa if there was no significant change in colonial development policy.
The precarious existence of European planters and farmers forced them
to ensure by whatever means that wages remained low, making any im-
provement in the standard of living of the majority all but impossible.
According to Macmillan, the political opposition which had led to the
1935 riots in St Kitts owed ‘its strength and persistence to an undercur-
rent of discontent among poor wage-earnings, both small-holders and
landless’.6
Increasing awareness of declining economic conditions in the col-
onies contributed to international criticism of British colonial rule.
Such criticism in turn provided justification (at least in some eyes) for
Germany’s claims for the return of its colonial territories, seized after
the end of World War One.7 Morgan observes that while ‘there was
agreement that the mandates should not be transferred to Germany,
there was deep concern lest our Colonial record was not good enough
to support the refusal’.8 Pleas from the colonies themselves also helped
convince the Colonial Office and (to a lesser extent) the Treasury that
colonial administrations needed to be more active in attempting to raise
the standard of living of the majority in the colonies, taking a wider
view of development which encompassed not only infrastructure but
2
‘Six Slain as 3,300 African Miners Riot’, New York Times, 30 May 1935, p. 2.
3
Morgan, The Official History of Colonial Development, Volume 1, p. 31.
4
For examples, see Lonsdale, ‘Political Associations in Western Kenya’; Rotberg, Rise of
Nationalism in Central Africa, ch. 5.
5
For an overview of the economic impact of the Depression in the tropical Empire, see
6
Macmillan, Warning from the West Indies, pp. 16–19; 107.
7
8
also social and economic services intended to limit the impact of eco-
nomic downturns.9
Implicit in this realization was the awareness that this would require
greatly increased investment by Britain itself, and at least the temporary
abandonment of the self-sufficiency policy. Macmillan argued that the
failure to make such an investment previously was one reason for the
economic problems faced by the colonies in the 1930s. ‘Whereas Treasury
doles have served only to keep a starved and inadequate administration
half alive, it becomes clear that intelligently liberal expenditure in earlier
days would by now have set necessary works of development in train, and
made the Territories at least more nearly self-supporting.’10 One illustra-
tion of the extent of change in colonial policy was the involvement of
Macmillan, a prominent critic of colonial rule not just in the West Indies
but throughout the tropical Empire, in shaping it as a member of the
Parliamentary Labour Advisory Committee and the Advisory Committee
on Education in the Colonies. His work also influenced Lord Hailey’s
African Survey.11
This shift in colonial development policy also reflected broader changes
in the norms of political economy. Around the world, the early 1930s
were years of dramatic change in the public’s expectations of the govern-
ment, as the New Deal and other social programmes designed to mitigate
the worst impacts of the Great Depression expanded the role of the public
sector. As this chapter will show, changing notions of the appropriate role
of the state were apparent not only in the developed world, but also in the
tropical Empire.
In practical terms, this meant that, at least in theory, colonial adminis-
trations needed to expand the scope of public expenditure beyond admin-
istration, law enforcement, and defence. These, as Lord Hailey noted in
his report on African administration, had dominated public expenditure
in Africa in the first decades of colonial rule.12 The other major feature of
early colonial public spending in Africa was infrastructure, particularly
roads and railways. Offer defines infrastructure spending as part of a cat-
egory of public spending intended to provide for future needs.13 This cat-
egory also includes social expenditure like pensions, education, medical
treatment, disability payments, and unemployment benefits. The goal of
9
10
Macmillan, Warning from the West Indies, p. 15.
11
Levin, ‘Macmillan, William Miller (1885–1974)’, Oxford Dictionary of National
Biography, online edition <http://www.oxforddnb.com/view/article/37723>, accessed 7
July 2009. Copy available from the author.
12
Lord Hailey, Native Administration, p. 3.
13
Offer, ‘Contract Ambiguity and the Welfare State’, p. 1.
the new colonial development policy which emerged in the late 1930s
was to increase expenditure on social services like these, which would
provide for the future social and economic needs of the colonies.
A tentative early step in this direction had been made with the passage
of the first Colonial Development Act in 1929, which for the first time
provided regular funds for the development of the colonies.14 This bill was
ostensibly motivated not by any intention to improve the standard of
living in the colonies themselves, but rather by the idea that development
projects in the colonies might help ease unemployment in Britain by
stimulating demand for manufactured goods (though many in Parliament
also regarded it as ‘a long overdue contribution by Britain to the eco-
nomic development of her colonial dependencies’).15 As Constantine
notes, however, ‘the Imperial government’s apparent commitment to a
sustained programme of colonial development coincided with the onset
of world economic depression’. One immediate effect of the Great De-
pression was to revive ‘anxiety about the budget’ and increase scrutiny on
any additional expenditure, including on colonial development.16 As
Governor Bourdillon of Nigeria noted in his well-known 1939 despatch
critiquing British colonial development policy, ‘a million a year spread
over fifty territories with an area of two million square miles and a popu-
lation of over 60,000,000, was totally inadequate to produce the desired
results’.17 In the end, the Colonial Development Act Committee, assigned
to consider applications, often had far less than the £1 million per year it
was initially intended to spend.18 A final criticism of the Act was that it
took, as Morgan argues, an excessively narrow view of ‘development’,
only funding piecemeal projects which involved little or no recurrent ex-
penditure, which ruled out most social services.19
To many, the disturbances of the 1930s revealed that the steps taken in
the 1929 Colonial Development Act were insufficient. Morgan observes
that ‘clearly, the Colonial problem was bigger than had been conceived in
1929, when it was thought that piecemeal help would suffice, alongside
locally balanced budgets, to produce the necessary development of re-
sources’.20 Even in the 1930s and 1940s, however, resource constraints
in London and in the colonies meant that the new vision for colonial
14
15
Wicker, ‘Colonial Development and Welfare’, pp. 174–5.
16
17
Sir B. Bourdillon to Mr MacDonald, Secretary of State, 5 April 1939, published in
Ashton and Stockwell (eds.),, Imperial Policy and Colonial Practice, Part II, p. 71.
18
Havinden and Meredith, Colonialism and Development, p. 148.
19
Morgan, Official History of Colonial Development, Volume 1, pp. 56–61.
20
Ibid., p. 29.
development which was articulated by policy-makers in the late 1930s

and finally promulgated in the Colonial Development and Welfare Acts
of 1940 and 1945 actually did little to change spending priorities in the
colonies. In London, the outbreak of World War Two and the economic
crisis which followed the war again limited the contributions Britain
could make to colonial development. In tropical colonies like Kenya and
Northern Rhodesia, the greater financial freedom provided by gains in
revenue achieved during the war was limited by the fear among Treasury
officials that a new decline in commodity prices would again put them
into deficit. They therefore remained cautious in their commitments to
new expenditure, and the budgets of the colonies did not reflect the in-
creased importance of social spending which dominated the new rhetoric
of colonial development. The difficulties faced by both London and the
colonies in their attempts to meet the new expectations placed on the
colonial state suggest that colonial rule in the form that it took was per-
haps affordable only under the Gladstonian expectations of public sector
activity which prevailed before the 1930s.
Colonial development policy is the subject of a large literature. How-
ever, its focus is largely on shifts in the Imperial government’s approach to
colonial development, rather than on the challenges of implementing
these policies on the ground. This chapter attempts to fill this gap, by
examining how resource constraints in the colonies influenced their de-
velopment policies through the 1930s and 1940s. Further, it places the
local politics of colonial development in the context of changing expecta-
tions of the state across the rest of the world. In the colonies, as in the
developed world, the turmoil of the Great Depression led growing num-
bers of people to look to the state for increased support. Though the scale
of development programmes in the colonies was much smaller than those
of the New Deal in the United States or the expansion of social services in
Britain, changing principles regarding the relationship of the state to its
constituents had important long-term impacts.
C H A N G I N G PAT T E R N S I N T H E 1 9 2 0 s
Though the budget position of most colonies had stabilized by the early
inter-war period, expenditure patterns before 1929 were similar to those
of 1901–10, aside from some increase in spending on infrastructure and
social services as revenue returns improved. Northern Rhodesia in par-
ticular saw an increase in expenditure outside administration and polic-
ing after the Colonial Office took over the governance of the colony in
1924. Tables 6.1 and 6.2 give the allocation of expenditure in the years
Table 6.1. Public expenditure in Kenya, 1925–29 (in constant 1913 prices)
Defence, policing, Infrastructure Social Total
and administration
£ % £ % £ % £
1925 649,197 50 319,722 25 161,508 12 1,300,720
1926 684,511 51 393,320 29 200,488 15 1,337,773
1927 713,151 51 392,805 28 223,080 16 1,402,741
1928 779,823 49 492,113 31 264,372 17 1,592,498
1929 984,638 50 577,909 29 297,742 15 1,962,526
1925–9 50 28 15
1901–10 54 41 4
Sources: Calculated from Kenya, Blue Books, 1925–29; Feinstein, Statistical Tables of National Income,
Table 61.
Table 6.2. Public expenditure in Northern Rhodesia, 1925–29 (in constant

1913 prices)
Defence, policing, Infrastructure Social Total
and administration
£ % £ % £ % £
1925 119,961 55 58,084 27 33,801 15 2,141,452
1926 131,173 52 77,268 31 39,022 15 2,255,507
1927 140,923 49 91,324 32 54,120 19 2,355,928
1928 144,242 49 82,876 28 59,552 20 2,641,081
1929 157,387 51 81,261 26 56,193 18 3,590,134
1925–9 51 29 18
1901–10 78 10 3
Source: Calculated from Northern Rhodesia, Blue Books, 1925–29; Feinstein, Statistical Tables of
National Income, Table 61.
immediately preceding the Depression. The average allocations for

1901–10 are included as well, for comparison.
These data still bear some resemblance to Britain, which spent over half
its budget (61 per cent) on administration and defence. However, the pro-
portion of total expenditure which Britain devoted to infrastructure was
lower than in the colonies, reflecting the preoccupation of colonial officials
in the late 1920s with the expansion of railways and other facilities.
In addition, the proportion of expenditure devoted to social spending,
which in this case includes pensions, unemployment insurance, and
health services, is lower in the colonies than in Britain. This is not surpris-
ing. Since 1880 the governments of all industrialized countries had ex-
panded the range of social spending beyond poor relief to include health
Table 6.3. Allocation of public expenditure (%)
Defence, Infrastructure Social Other
policing, and
administration
Kenya (1925–29) 50 28 15 7
N. Rhodesia (1925–29) 51 29 18 3
Great Britain (1927) 61 10 24 1
Source : As for Tables 6.1 and 6.2; Mitchell and Deane, Abstract of British Historical Statistics, p. 399.
care subsidies, pensions, unemployment compensation, and housing sub-

sidies. By 1930 the only countries whose social spending remained at or
near zero were low-income countries.21
As Table 6.3 shows, Kenya and Northern Rhodesia were not, in fact,
near zero. However, caution should be taken in interpreting these figures.
Expenditure under the social spending category is largely dominated by
expenditure to support European officials serving in the colonies. Pen-
sions for colonial officials account for a large percentage of this total in
both colonies. In 1929, for example, pensions were 25 per cent of social
spending in Northern Rhodesia, and a startling 64 per cent in Kenya.
While the data do not allow us to completely separate expenditure on
health services for officials from health services provided to the rest of the
population, it might be safe to conclude that a considerable proportion of
this expenditure was devoted to keeping the colonial administration
healthy, and had limited benefit for the rest of the population. Tables 6.1
and 6.2 should therefore be interpreted as giving a very generous account-
ing of social spending, some of which might properly be considered as
supporting the administration rather than social spending in a pure sense.
Additionally, the bulk of true social expenditure benefited the settler com-
munity rather than the African majority. Bowden and Mosley use ex-
penditure data disaggregated by district to argue that settler colonies spent
less than non-settler colonies on ‘pro-poor’ expenditure, i.e. expenditure
which benefits poor smallholders (including spending on education,
health, and agricultural services).22
Like other low-income countries, colonial administrations were there-
fore spending much less than their counterparts in the developed world
on social services for the majority of the population. This is not surprising
given their limited revenue sources and the extent of expenditure on in-
frastructure, which occupied a much larger proportion of the total budget
21
Lindert, Growing Public, pp. 171–6.
22
Bowden and Mosley, ‘Evolution of Poverty in Africa’, p. 13.
than in Britain. However, it was precisely in the area of social spending

that colonial administrations would find themselves caught short during
the Depression and its aftermath.
MEETING NEW NEEDS: PUBLIC EXPENDITURE

A N D T H E G R E AT D E P R E S S I O N
As the previous chapter demonstrates, the Depression had a severe

impact on colonial budgets. Colonial administrations found the reve-
nue available to them much diminished. Unable to take on more debt
and seeing their minuscule reserves rapidly diminish, they immediately
took steps to cut expenditure by reducing services as well as the size of
the civil establishment.23 Tables 6.4 and 6.5 compare expenditure for
1930–34 with that of the previous two periods given above. As these
data show, the administration’s share of total expenditure crept up as
other projects were cut to a bare minimum. Social spending remained
a relatively large share of expenditure, nearly eclipsing infrastructure.
This expenditure was dominated particularly by pensions (from the
retrenchment of new staff hired during the late 1920s boom period).
In the midst of this axe-wielding, both administrations also faced new
demands on the public purse.
Those suffering worst from the Depression looked to the state to relieve
them. This was true not only in the colonies, but throughout the world.
In the United States, the end of ‘welfare capitalism’ (in which businesses
provided social services to their employees in order to ensure a contented
workforce) left workers looking elsewhere for support.24 Like workers
elsewhere, they turned to the government. According to Clavin’s study of
the Depression in Europe, ‘mass unemployment had a profound effect on
society, and one result was that by 1932, most European governments as
much by default as design, had become much more involved in managing
the domestic economy’.25
The budget positions of both colonial administrations prevented them
from doing much to alleviate the impacts of the Depression for any of the
constituencies under their jurisdiction. What little aid existed was gener-
ally spent for the benefit of settler communities, which used the same
collective influence that allowed them to shift the allocation of the tax
23
Contemporaries emphasized how difficult it was to actually decrease expenditure this
way, due to pensions for retrenched staff and the political problems associated with decreas-
ing public services. See Northern Rhodesia, Report of the Finance Commission, pp. 13–14.
24
McElvaine, Great Depression, pp. 15–16.
25
Clavin, Great Depression in Europe, pp. 110–11.
134
Crisis Management in Colonial Public Finance
Defence, policing and Infrastructure Social CDW Total
administration
£ % £ % £ % £ % £
1930 1,013,467 52 559,791 29 311,607 16 9058 0 1,936,303
1931 1,023,214 55 451,692 24 311,830 17 17,844 1 1,855,793
1932 1,081,521 58 389,371 21 308,298 17 2137 0 1,850,369
1933 1,080,020 57 420,124 22 336,150 18 3466 0 1,903,867
1934 1,082,446 57 351,992 19 335,798 18 4585 0 1,887,712
1930–34 56 23 17 0
1925–9 50 28 15
1901–10 54 41 4
Source: As for Table 6.1.
Table 6.5. Public expenditure in Northern Rhodesia, 1930–34 (in constant 1913 prices)

Defence, policing, and Infrastructure Social CDW Total
administration
£ % £ % £ % £ % £
1930 178,354 45 107,934 27 66,180 17 13,017 3 396,952
1931 192,335 41 158,408 33 52,937 11 14,260 3 473,200
1932 203,036 43 108,808 23 97,618 21 7850 2 468,865
1933 208,698 45 85,201 18 114,034 24 17,297 4 468,076
1934 166,609 29 88,541 16 127,454 23 142,433 25 565,520
1930–34 41 24 19 7
1925–29 51 29 18
1901–10 78 10 3
Source: As for Table 6.2.
135
burden to change the distribution of public expenditure. As Clarence-

Smith notes, the assistance settlers received provided colonial administra-
tions with ‘a way of saving small settler entrepreneurs faced with ruin,
who often caused political trouble quite out of proportion to their num-
bers’.26 The disproportionate allocation of whatever government assist-
ance was available became an increasingly controversial issue in both
colonies, and fed the discontent already driven by declining standards of
living.
One example of this is the disproportionate allocation of unemploy-
ment relief, such as it was. In Northern Rhodesia, the closure of the mines
resulted in a sudden surge in unemployment, a problem the young colony
had not yet experienced.27 In November 1930, the newly expanding
mining industry employed 3,600 Europeans and 32,000 Africans. A 1933
government report on unemployment noted that during the boom
‘skilled, semi-skilled and un-skilled men flocked to the construction work
and readily found employment at good wages. Not a few left their normal
agricultural pursuits to take a part in the construction boom.’ By Septem-
ber 1932 employment on the mines had fallen to 1,008 Europeans and
7,088 Africans.28 Many of the European employees had been recruited
from Britain and South Africa to do low-skill jobs for high rates of pay.29
No other industry could absorb those let go by the mines, as nearly every
other industry was shrinking along with mining.30 The only potential ex-
ception was the construction of the new capital at Lusaka, for which the
extent of government funding was as yet uncertain. Those dismissed by
the mining industry were joined by those let go at the end of a large gov-
ernment building programme and by the Railway, which compounded
the scale of the problem facing the colonial government.31
The sudden retrenchment of large numbers of Europeans and Africans
presented the colonial administration with a set of challenges it had not
yet faced. The 1933 report noted that ‘at the end of the year 1931 the
increase in the number of unemployed in receipt of Government relief
26
Clarence-Smith, ‘Effects of the Great Depression on Industrialisation’, pp. 171–2.
27
The development of the mines had given work ‘to an ever increasing number of
Europeans and Africans’. See Northern Rhodesia, Report of the Finance Commission, p. 4.
28
Northern Rhodesia, Report of the Government Unemployment Committee, p. 5.
29
Prain, Fifty Years of Mining in Changing Africa, p. 55.
30
Robinson, ‘The Economic Problem’, p. 177.
31
Northern Rhodesia, Report of the Government Unemployment Committee, p. 6. The
Railway was suffering in particular from the disruption in trade with South Africa
caused by Britain’s abandonment of the gold standard in September 1931 (which was
not replicated in South Africa until December 1931). See Northern Rhodesia, Report
of the Finance Commission, p. 6 and Feinstein, Economic History of South Africa,
pp. 93–9.
began to cause alarm. Expenditure had risen from £447 in the financial
year 1927–1928 to £3,090 for the first nine months of the year 1931–
1932.’32 The assistance to which the unemployed were entitled in North-
ern Rhodesia was not generous, and consisted only of sufficient rations ‘to
keep a person in sound health if no hard work is performed’ and accom-
modation when available or, if it were not, ‘the destitute applies to a Relief
Society or fends for himself ’.33 However, the financial position of the
government remained fragile and as Cambridge economist Edward Rob-
inson observed in 1933, ‘Northern Rhodesia is less well equipped than
almost any other country to carry a load of unemployment.’34 The gov-
ernment initially responded to the potential increase in demand for relief
by offering to repatriate all destitute Europeans to their country of origin
at government expense and refusing to give rations to all who had entered
the territory after 1 January 1927.35 It also strengthened regulations on
vagrancy.
By May 1932, however, the administration relented and began to take
a softer approach, issuing rations to all genuinely unemployed Europeans
who applied for them. It also provided accommodation ‘where possible’
and free medical attention ‘where necessary’. This assistance was almost
entirely directed towards Europeans. Administrators believed that Afri-
cans could always ‘return to their villages and support themselves in that
manner of life to which they are most accustomed’. As a result, the Afri-
can population was thought to be ‘not so greatly affected by unemploy-
ment as the European’. The Committee did observe, however, that more
than 4,000 unemployed Africans had not returned to their places of origin
and remained in the Ndola district. They estimated that ‘approximately
10 per cent of these are subsisting on their savings and the remainder on
their wits or the charity of their friends and relations’. Nevertheless, in
establishing a camp for the unemployed constructed at Ndola ‘by the
European destitutes themselves’, the government supplied the material
for its construction and a small bonus on the condition that ‘50 per cent
of the artisans employed should be European’. Estimates of expenditure
on unemployment (in Table 6.6) show both that the government’s ability
to offer financial assistance to the unemployed was minimal (the portion
32
Northern Rhodesia, Report of the Government Unemployment Committee, p. 8.
33
Ibid., p 16.
34
The inability of the government to cope with large numbers of unemployed workers
was the main argument for retaining a migrant labour system on the Copperbelt. See Rob-
inson, ‘The Economic Problem’, p. 177.
35
This would have included many of those who entered the territory to work on the
mines, who made up the bulk of unemployed Europeans. See Northern Rhodesia, Report
of the Government Unemployment Committee, p. 39.
Table 6.6. Government unemployment relief, 1932 (April–September)*
European African Total
£ s d £ s d £ s d
Rations 2,902 10 11 34 14 1 2,937 5 0
Repatriations 4,489 2 9 50 13 6 4,539 16 3
School fees 2,318 0 0 0 0 0 2,318 0 0
(approximate)
Medical fees 834 7 6 0 0 0 834 7 6
(approximate)
Totals 10,544 1 2 85 7 7 10,629 8 9
*This period represents the first half of the 1932–33 fiscal year.
Source: Northern Rhodesia, Report of the Government Unemployment Committee 1932, p. 11.
granted to Europeans divided between 517 unemployed people with 613

dependants), and that Africans received little of what was offered.36 With
the limited government assistance available devoted towards the Euro-
pean unemployed, there was no relief for unemployed Africans who re-
mained on the Copperbelt during the downturn. The extent of
unemployment on the Copperbelt was cited as one of the causes of the
1935 riots, and how to deal with surplus labour in the mining areas during
slowdowns remained a major controversy in Northern Rhodesia even
after independence.37
Unemployment was also a problem in Kenya, but one lower on the
political priority list than the potential for bankrupt European farmers.38
This prospect alarmed the colonial administration for several reasons.
First of all, many people (not least the settlers themselves) believed they
were central to the economic future of the colony. To some extent this
perception was correct: in 1926 European agriculture produced 62.7 per
cent of total domestic exports.39 However, as Mosley notes, this produc-
tion was driven by a few large and more efficient producers, whose yields
were internationally competitive, while many settler farmers ran smaller,
inefficient farms where yields fell well below the competitive rate.40
The perception that European commercial farms were the engines of
development in Kenya was beginning to change during this period as
officials in Nairobi became aware of the importance and perseverance of
36
Ibid., pp. 8–12.
37
Berger, Labour, Race and Colonial Rule, p. 34.
38
For more on unemployment relief in Kenya, see TNA CO 323/910/24.
39
40
Ibid., pp. 172–8.
African export crop production.41 However, European settlers still had

influential backing in London which made it politically difficult for the
colonial administration to allow them to fail. Secondly, within the colony
they remained a vocal political minority, particularly during straitened
times. Mosley notes that pressure on the state to implement extra-market
operations was concentrated in periods when a loss was being made on
agricultural exports, i.e. when the survival of the ‘white agricultural bour-
geoisie’ was threatened.42 In terms of government expenditure, they exer-
cised this influence particularly by means of majority membership on the
Standing Finance Committee of the Legislative Council, which had con-
siderable latitude in amending the annual estimates after they had been
passed by the Council.43 This became a particular point of contention
with several of the missionaries nominated to represent African interests
in the 1930s. One, Canon H. Leakey, observed that the Committee con-
tained eleven (out of fourteen) members who were pledged to vote in the
interests of European constituencies, and only one appointed to speak on
behalf of the Africans of the colony.44
Settlers did indeed find themselves threatened during the Depression,
and wanted the colonial administration to help them stave off bankruptcy
in the short term as well as intervene in the market on their behalf. These
were large demands, and the state had little to give. As Pim observed in
his 1936 report, ‘it is no easy task to make financial provision for all these
requirements on an almost European scale’ with the resources which
could be raised through taxation in the colony. ‘The difficulties are ac-
centuated when economic distress brings demands for assistance to farm-
ers on the lines followed by countries such as the Union of South Africa
which have large resources independent of agriculture.’45
Pressured both internally and externally, the colonial administration
mobilized whatever resources it could to save the settlers from bankruptcy,
leaving little for anyone else. Kitching notes that many of the European
settler farms would have gone bankrupt ‘had not the colonial state stepped
in, first with a whole series of refunds, rebates and loan subsidies on ex-
ports, and in 1931 with the formation of the Land Bank’.46 The Land
Bank, modelled on institutions in other countries which were generally
intended to loan money to farmers for farm development, was more a
41
Anderson and Throup, ‘Africans and Agricultural Production’, pp. 329–30; Anderson
and Throup, ‘Agrarian Economy’, p. 17.
42
43
McWilliam, ‘Economic Policy and the Kenya Settlers’, pp. 174–5.
44
Bennett, ‘Imperial Paternalism’, p. 148.
45
46
Kitching, Class and Economic Change, p. 57.
method of, as Mosley notes, ‘granting farmers relief from immediate fi-

nancial distress, rather than for development’.47 The other mechanism of
granting relief to settlers was the increasing government control over the
marketing of agricultural produce, which provided a guaranteed price for
settler crops (particularly maize), insuring them against falls in the export
price.48 Overall, Van Zwanenberg argues that without this aid, which he
calculates as nearing £1,000,000, white settlement might not have
survived.49
N E W P L A N S A N D P RO M I S E S : D E V E L O P M E N T
P O L I C Y F RO M 1 9 3 5
The economic hardship suffered by Africans during the Depression, along

with the disproportionate help offered to European communities, became
a matter of political tension within both colonies, just as it had through-
out the Empire. Whatever minimal gains had been made in the provision
of social services in the late 1920s had been erased by Depression-era
budget cuts: for 1934 Sir Alan Pim estimated that expenditure in Britain
on social services was £5 15s while the highest rate in Africa in 1936–37
was 7s 4d in the Gold Coast.50 In 1930 Clarence Buxton, District Com-
missioner of Kajiado District, sent a letter to the Colonial Secretary in
Nairobi asking whether the services received by the Maasai community
were at all in proportion with the tax it paid. Buxton questioned in par-
ticular the extent to which the central administration could be considered
a service to African taxpayers.51 When the Pim Commission visited
Nyanza in 1935, the Kavirondo Taxpayers’ Welfare Association submitted
a memorandum to the Commission arguing that Africans in the district
were taxed excessively with regard to both their incomes and the propor-
tion of expenditure devoted to the provision of public services to
Africans.
We want to tell you what is hardest on us Africans. About £250,000 is col-
lected in this Province in the hut and poll tax every year. The Africans get
47
Mosley, Settler Economies, p. 179. See also Kenya Land and Agricultural Bank, Annual
Report for 1931, pp. 5–6.
48
This was largely funded by buying African produce at a price lower than the export
price. For more detail on these interventions, see Mosley, Settler Economies, ch. 2.
49
Van Zwanenberg and King, Economic History of Kenya and Uganda, p. 39. This is a
significant total when compared with total annual expenditure of just over £3,000,000 in
the years immediately following the Depression.
50
51
Clarence Buxton to Colonial Secretary, 12 September 1930, in TNA CO
533/412/1.
this money by wages [sic] earning and sale of produce. Every year this money
goes out of the Reserve in taxes and every [sic] little comes back to Africans
to be spent by Africans in the Reserves. This keeps us poor.52
In London, it was recognized that a new and more inclusive development
policy would be needed in order to address these concerns. As Morgan
puts it, ‘a narrow view of economic development was seen to be lacking
in essentials. Social considerations, under the name of “welfare” were to
be an integral part of development.’53 In a circular sent to colonial gover-
nors in anticipation of the 1940 Act, Secretary of State for the Colonies
Malcolm McDonald observed that ‘in most cases economic advance in
the Colonial Empire is dependent to a greater or less extent upon an im-
provement in conditions of life among those engaged in production and
industry, and the expansion of certain branches of the social services is an
essential preliminary to any economic development’.54 In a later study of
colonial welfare policy, Lucy Mair defined the concept to be as broad as
‘the whole field of those policies and services that would be described in
America as “nation-building”’.55
Different observers took narrower views in identifying the central prob-
lems to be rectified through colonial development policy. W. Arthur Lewis,
for example, suggested that the greatest obstacle with regard to develop-
ment in the colonies was lack of knowledge about tropical resources or
how best to exploit them. ‘Parliament has recognised this and has set aside
£1,000,000 a year especially for colonial research. The fact that this alloca-
tion has been made is not very widely known either here or in the col-
onies, but it is nevertheless the most valuable thing that has so far been
done.’ He also argued, however, that education was vital as a mechanism
for distributing new-found knowledge.56 A 1947 article in the Economist
argued that less should be spent on social services and more on economic
services so that the recurrent expenditure needed for increased services was
affordable.57 Nevertheless, even within this wide variety of opinions on the
issue of colonial development, there was an acknowledgement that the
Gladstonian approach to colonial public finance had failed.
In both London and colonial capitals, officials hoped that more gener-
ous provision for the many would stem the rising tide of anger and unrest
52
Kavirondo Taxpayers’ Welfare Association, ‘Memorandum presented to the Financial
Commissioner’, 13 November 1935, in KNA PC/NZA/2/1/88.
53
54
Circular Despatch, 30 April 1940, in NAZ SEC1/358.
55
Mair, Welfare in the British Colonies, p. 101.
56
Lewis, ‘Colonial Development in British Territories’ (unpublished manuscript, 1947),
in RHO Mss.Brit.Emp, pp. 2–3.
57
‘Development or Welfare?’, The Economist, 15 March 1947, in NAZ SEC1/358.
in the tropical Empire.58 In London, the passage of the 1940 Colonial

Development and Welfare (CDW) Act was one of the first legislative
manifestations of the new approach to colonial development. Havinden
and Meredith note that the addition of the term ‘welfare’ to what had
been the 1929 Colonial Development Act was ‘both a recognition of the
extent of poverty in the tropical colonies revealed at the end of the 1930s
and an acceptance of the large “welfare” element in expenditure’ under
the 1940 Act.59 In what appeared to be an abandonment of the self-suffi-
ciency policy followed in British colonial governance, the 1940 Act also
provided for the forgiveness of previous loans to the colonies, including
the Uganda Railways loan of £5,502,592.60 Expenditure under this legis-
lation was significantly less than originally approved, which was not sur-
prising given the urgent need for resources for the war effort. The 1945
revision of the Act increased the funding available by two thirds. Under
the 1945 Act, each colony was given an allocation of the total funding
which, supplemented by loans and local revenue, was to be spent accord-
ing to a ten-year plan drawn up by the colony and approved by the Colo-
nial Office.
The shift observed in colonial development policy paralleled a general
shift in political economic thought throughout the world from the early
1930s. The Great Depression had revealed that all classes were vulnerable
to economic crises. Programmes of government intervention in Europe
and the United States were justified not only by the realization that eco-
nomic crises could affect everyone, but also by the idea that improving
the welfare of the many would help the country as a whole. As Lindert
notes, ‘Franklin Delano Roosevelt used freedom from want and from fear
as a keynote for launching aid to the unemployed and Social Security for
the elderly and disabled.’ In Britain, the Beveridge Report of 1942 called
on similar sentiments in articulating its vision of national insurance.61
Colonial administrations were by no means immune from this general
trend. In 1937, in anticipation of the new CDW Act, Kenya Governor
Henry Brooke-Popham submitted a memorandum to the Executive
Council proposing the formulation of Kenya’s first development plan,
which both anticipated the broader ambitions of post-war development
58
Some New Deal policies had similar intentions. The economist J. K. Galbraith wrote
that Social Security ‘mitigates the two most aggressive cruelties of the industrial system—
impoverishment because of unemployment, impoverishment because of age—and thus
calms the associated anger’. See Galbraith, The World Economy since the Wars, p. 103.
59
60
‘Colonial Development and Welfare Bill: Financial and Explanatory Memorandum’,
in NAZ SEC1/358.
61
Lindert, Growing Public, p. 176.
plans and reflected contemporary discussions in the Colonial Office about

the reform of colonial development policy. He argued that a new plan for
economic development needed to address not only material development
but also the expansion of education and the spread of ‘British ideals’,
which he defined as ‘truth, justice, protection of the weak, service to
others and devotion to duty’. In addition, he argued that a successful plan
must address aggregate economic development across Kenya as a whole,
noting that ‘different races and different sections of the community may
overlap at certain points, and in some details their interests may appear to
be divergent, but speaking generally, what benefits any section of the
community in Kenya benefits the whole country and everybody in it’.62
Brooke-Popham’s proposals met with opposition from other members of
the colonial administration, most notably from the Acting Treasurer,
George Beresford-Stooke (later Governor of Sierra Leone), who argued
that the colony’s financial position was too weak for long-term develop-
ment planning. Preparation of a comprehensive development plan for
Kenya was further delayed by the outbreak of war and Brooke-Popham’s
departure in 1939, but the idea of a more comprehensive government
development policy had become firmly entrenched.
Northern Rhodesia had suffered perhaps worse from the unrest caused
by the hardships of the 1930s, with not only the Copperbelt disturb-
ances of 1935 making the news, but also a second round in 1940. The
second incident was not due to an increase in taxation like the first, but
rather occurred when an otherwise peaceful strike by African minework-
ers (immediately following a strike by European workers) turned vio-
lent.63 The strike was due in part to grievances regarding the low rates of
pay in the mines relative to the rapidly rising cost of living. While the
second disturbance was initially viewed as being purely between the
mining companies and their workers, it was difficult, as Lonsdale argues,
to disentangle the motivation of social and other concerns from ‘specific-
ally anti-colonial elements’ in a protest.64 The final report of the govern-
ment commission appointed to investigate the disturbances argued that
the government needed to make provision for educational services in the
mining areas, either through grant-aided missions, the mining compan-
ies themselves, or, if necessary, government-run schools. The government
should also construct an African cost-of-living index against which
62
For Brooke-Popham’s ideas for a development plan, see Brooke-Popham, ‘Notes on a
Policy of Constructive Development’, 30 July 1937 and revised 10 February 1938, in KNA
CS/1/8/6.
63
For an account of the event, see Northern Rhodesia, Report on Disturbances in the
Copperbelt 1940, pp. 11–25. See also Berger, Labour, Race and Colonial Rule, pp. 49–56.
64
Lonsdale, ‘Political Associations in Western Kenya’, p. 596.
African wages could be compared. It should also appoint labour officers

to each of the mines to monitor the treatment of African workers.65 In
the government’s response to the report, it agreed to contribute £6,000
towards medical services for the dependants of employees, approximately
matching the expenditure of the mines themselves. It also budgeted an
additional £14,000 on school buildings in the Copperbelt in 1941
(though the building programme was somewhat delayed due to the
war).66
With the administration’s focus squarely on the Copperbelt, which
provided the bulk of its revenue, development outside the mining areas
was relatively low on the political priority list. Newly aware of the specu-
lative nature of mining in Southern Africa (which according to Berger
had unearthed ‘a few rich prizes but also enjoyed a record of early bon-
anzas followed by quick collapse’), the government kept expenditure on
services to a minimum in order to cushion itself for another downturn.67
Prior to the 1940s, there were few mechanisms to direct development
funding to the rural areas. One of these was the Native Development
Board, established in 1938 with the primary object of allocating grants to
Native Treasuries for development schemes. This scheme remained on a
small scale: up to 1943 disbursements from the fund totalled only
£33,278.68 By the final years of the war, however, Northern Rhodesia’s
colonial administration began to make plans to dramatically expand the
services it offered in rural areas as well as the Copperbelt.
E N D S W I T H O U T M E A N S : R E S O U RC E
CONSTRAINTS AND SPENDING PRIORITIES
In both the colonies and the developed world, this new approach to pol-
itical economy was sometimes characterized by, as some observers la-
mented, more idealism than planning. Economist J. K. Galbraith, recollecting
his arrival in Washington to work for the Roosevelt administration imple-
menting New Deal policies, wrote that ‘my dominant impression was of a
wonderful excitement, a deep commitment to action and considerable
uncertainty as to what should be done’.69 Similarly, new colonial develop-
65
Northern Rhodesia, Report on Disturbances in the Copperbelt, pp. 52–3.
66
Northern Rhodesia, Statement by the Government on the Recommendations of the Cop-
perbelt Commission, p. 4.
67
Berger, Labour, Race and Colonial Rule, pp. 22–3.
68
Clay, Memorandum on Post War Development Planning, p. 15. ‘Native Treasuries’ and
their role in development will be discussed in greater detail in the next chapter.
69
Galbraith, The World Economy since the Wars, p. 92.
ment policies were said to be comprised more of rhetoric and good inten-
tions than of practical policies. As Macmillan observed rather dryly, ‘it is
the besetting national sin to take credit for the benevolence of our
intentions’.70
It was clear from the outset that administrators would face difficulties
finding sufficient funds to support the new approach to colonial develop-
ment. Lord Hailey, in an often cited speech, lamented that ‘the British
people must realise that we ought to be more liberal in our attitude to the
need for financing colonial development. I do not question that we are
serious in speaking, as we so often speak, of our spirit of trusteeship. But
I sometimes wish that we could place our hands on our hearts a little less,
and set them to explore our pockets a little more.’71 The lack of capital
was, in the opinion of W. Arthur Lewis, a central cause of colonial pov-
erty. In 1947 he wrote that the deficiency of capital ‘applies in every
sphere. Public works and utilities, roads, railways, power houses, telecom-
munications, waterworks, irrigation canals, hospitals, school buildings—
all these are gravely deficient.’ Lewis predicted that it was mainly these
needs that would be provided for by CDW Act funds, but that the amount
voted would be just ‘a drop in the bucket’ compared with the needs of the
whole Empire.72
Resource constraints meant that colonial development schemes often
fell short of Colonial Office ambitions. In the case of the 1940 Act, this
was largely due to the fact that it was passed during war-time. Officials
therefore knew in advance that grants and loans from Britain would be
limited. In September 1939 the Colonial Office received a memorandum
from Sir Alan Barlow, Third Secretary at the Treasury, declaring a halt on
all new schemes under the Colonial Development fund unless their exe-
cution ‘would directly assist the conduct of war’.73 Secretary of State Mc-
Donald, concerned to maintain a reputation for ‘enlightened colonial
administration’, urged colonies to make all possible economies while dis-
turbing existing social services and development activities as little as pos-
sible.74 He also encouraged the imposition or increase of income tax in
the colonies, since British assistance would be minimal.75 War-time con-
straints were undoubtedly the reason that McDonald, after encouraging
colonies to expand their social services in the circular cited above, also
70
Macmillan, Warning from the West Indies, p. 20.
71
Lord Hailey, address to the Royal Institute of International Affairs, 8 December 1938,
cited in Morgan, Official History of Colonial Development, Volume 1, p. 28.
72
Lewis, ‘Colonial Development in British Territories’, p. 3.
73
74
Quoting telegram from S of S, 15 September 1939, in ibid., p. 72.
75
Ibid., p. 72.
cautioned in the next sentence that ‘the first emphasis should be placed
on the improvement of the economic position of each Dependency, in
the hope that it may be able to an increasing extent to provide out of its
own resources the social and other services which its people should
enjoy’.76
Even the 1945 allocations, though relatively generous given Britain’s
dire economic position after the end of the war, were less than the amount
to which the Colonial Office had aspired.77 Colonies were optimistic that
they could supplement their CDW allocations with reserves of public
revenue accumulated during the war years and through future borrowing.
The British government remained cautious, warning colonies not to go
too far in expanding social services which would commit colonial admin-
istrations to increased recurrent expenditure they might not be able to
afford in the future.78 The Colonial Office’s criticism of some develop-
ment plans reflected a tension in development planning between respond-
ing to local demands for social services and funding schemes likely to
increase government revenue in the near term.
This tension was also visible in local development planning efforts. A
renewed effort to devise a development plan for Kenya began in 1944,
when the Kenya Secretariat issued a circular to government departments
and provincial administrations on the preparation of development plans.79
This was the beginning of an increasingly ambitious series of development
plans produced during the post-war period. As in other colonies, the
expansion of the states’ role in economic management during the war,
along with increasing revenue, had given colonial administrators a new-
found confidence in their ability to centrally engineer economic change.80
McWilliam notes that ‘if Kenya was not quite a social laboratory in the
eyes of its administrators, it was a country where technically ideal solu-
tions were devised and tried out on a wide range of problems’.81 The
Circular emphasized that the approach to economic development ‘must
be twofold’, including both ‘well-planned development of the natural re-
sources of the native areas and balanced development of social services in
those areas’. Striking the ‘correct ratio of directly productive projects to
76
McDonald, Circular of 30 April 1940, in NAZ SEC1/358.
77
One of the goals of the CDW Act was for the development of the Empire to help solve
Britain’s own economic problems. Havinden and Meredith, Colonialism and Development,
pp. 218–27.
78
Ibid., pp. 252–3.
79
‘Preparation of Development Plans’, Secretariat Circular no. 44, 29 April 1944 in
KNA AD/9/2.
80
For examples, see Anderson and Throup, ‘Africans and Agricultural Production’,
pp. 335–6.
81
McWilliam, ‘The Managed Economy’, p. 252.
those which yield a long term or indirect effect’ was the ‘most difficult’
part of the process.82
As will be shown below, the relative emphasis given to social services
and more immediately remunerative schemes in subsequent develop-
ment plans largely reflected concerns about the government’s access to
funds, and support for increasing social services expenditure varied. Sir
Wilfrid Woods, a former financial secretary of Ceylon and member of
several commissions of inquiry into colonial public finance in Malaya,
Hong Kong, and Newfoundland, noted in his 1946 fiscal survey of
East Africa that the anxieties of European settlers regarding the poten-
tial for rapidly increasing public expenditure were not entirely un-
founded given the new policies adopted by the Colonial Office and
attempts by East African governments to resolve economic problems
relatively quickly.83 Woods saw education as a particular source of con-
cern. While he recognized the education of African children was es-
sential to minimizing the cost of administrative, professional, technical,
and semi-technical services required by planned economic develop-
ment, he also argued that departments of education in all three East
African territories had been ‘confronted with demands for schools
which it would cost vast sums to satisfy’. None of the three territories
could afford to provide ‘anything approaching universal elementary
education . . . without drastic curtailment of what must, for the time
being, be deemed to be the prior claims of economic development’.84 A
later sessional paper described the difficulty as follows: ‘Having regard
to the fact that the level of the national product is small to begin with
and that the freedom of planning is thereby restricted, the problem is
to raise the national product to a level at which the range of possible
alternatives is wider.’85
A committee tasked with preparing development plans for the colony
(hereinafter the Development Committee) was appointed in January
1945. The Development Committee was to prepare a ten-year develop-
ment plan which took into account the departmental and provincial plans
submitted in response to Secretariat Circular 44. An interim report, issued
in April 1945, stated that the object of development planning was to ‘use
the natural resources of the country, including manpower, in a manner
calculated to increase the national income of Kenya in the shortest space
of time so as to raise, as soon as possible, the standard of living of the
82
Kenya, ‘Development Programme 1954–57’, p. 3.
83
Woods, Fiscal Survey, p. 4; for Woods’ career, see ‘Obituary: Sir Wilfrid Woods,
Colonial Fiscal Expert’, The Times, 10 January 1947.
84
Woods, Fiscal Survey, pp. 5–7.
85
Kenya Colony, ‘Development Programme 1954–57’, p. 3.
majority of the inhabitants’.86 Provincial and departmental proposals

were to be examined against this standard. According to the first full
Development Committee report, published in 1946, the proper use of
manpower implied ‘the development of adequate but not luxurious health
services and education, in particular the education of African children of
both sexes and the mass education of African adults to a stage at which
they can understand, at least in part, the problems which modern condi-
tions create’.87
The attempt of the Development Committee to find the correct ratio
of economic projects to social services resulted in the first ten-year devel-
opment plan, in which agriculture and education received the largest al-
locations of funds. Out of a total proposed expenditure of £17,608,000,
£6,721,000 (38 per cent) was devoted to agriculture and veterinary serv-
ices and £2,470,000 (14 per cent) was to be spent on education and social
welfare. Not far behind were water development (£2,278,000), commu-
nications (£2,186,000), buildings (£1,377,000), and health services
(£867,000).88 This allocation clearly reflected what members of the Com-
mittee considered shortfalls in previous allocations of government ex-
penditure. In Kenya’s 1946 budget, for example, the largest proportion of
£7,700,740 in government expenditure was spent on defence and po-
licing (£1,496,449 or 19 per cent), infrastructure (£1,339,237 or 17 per
cent), and administration (£818,436 or 11 per cent). Agricultural and
veterinary services received slightly less than 10 per cent of the total, while
education received 6 per cent.89
Later development plans increased the proportion of expenditure allo-
cated to social services, particularly education. By 1948 The Times called
the rise in social services expenditure ‘an outstanding feature’ of the
budget for the following year.90 In 1950, the Governor appointed a Stand-
ing Planning Committee (hereinafter Planning Committee) whose task
was to revise development plans in light of changing circumstances. When
the 1946 development plan was reviewed in a 1951 Planning Committee
report, agriculture and education again received the largest allocations of
funding, though education had become the top recipient. Of the
£23,148,600 in development expenditure proposed, education was to re-
ceive £4,860,900 (or 21 per cent) and agriculture and veterinary services
86
Quoted in Kenya, Report of the Development Committee, Vol. 1, p. 4.
87
Ibid., p. 10.
88
Includes allocations from local revenue, loans and the Colonial Development and
Welfare vote. Calculated from ibid., p. 127.
89
Calculated from Kenya Colony, Blue Book.
90
‘Kenya’s New Budget: Rise in Cost of Social Services’, The Times, 26 November 1948,
p. 3.
were to get £4,067,500 (or 18 per cent). These were followed closely by
buildings (£4,001,800), roads (£3,975,000), and water development
(£2,273,500).91
Changing priorities in public expenditure were accompanied by ex-
tensive reorganization of the central government. The most significant
of these to development planning was the creation of the Development
and Reconstruction Authority (DARA) in 1945. This agency was de-
signed to oversee the implementation of development schemes, with
responsibilities that included controlling the expenditure of allocated
funds, assigning priorities to the execution of particular projects, nego-
tiating contracts, organizing the purchase of stores, and hiring staff for
the projects outlined in the Development Plan. It could also propose
new projects and was required to make an annual report to the Gover-
nor on the progress of development works. In an effort to insulate the
development programme from annual fluctuations in revenue, DARA’s
budget was treated separately from that of the colonial administration
as a whole. However, the importance of local revenue to development
planning made this separation of accounts difficult, and DARA was
abolished in 1953, with financial control for development expenditure
devolving to the Treasury.92 Expenditure under DARA accounts pro-
vides the best indication of development priorities in Kenya from 1946
to 1953. Table 6.7 shows the breakdown of DARA expenditure by min-
isterial portfolios.
The allocation of the colony’s expenditure by DARA shows that projects
in areas thought to be more immediately remunerative received the bulk
of development funds in Kenya from 1946 to 1953. Projects under the
portfolio of the Minister for Agriculture, Animal Husbandry and Water
Resources received the largest share. The bulk of this expenditure was on
soil conservation, water supplies, African land development, and Euro-
pean settlement. Education was the next largest recipient, with £5,049,959
of DARA expenditure. Of this amount, £1,991,937 (the largest share)
was spent on European education, £1,587,713 on African education, and
£873,710 on Asian. Other major allocations were for public works (under
both the Works and Chief Secretary portfolios). This pattern of expendi-
ture shows that while social services may have become a more important
part of the colonial administration’s definition of development during
this period, the allocation of scarce resources tended to favour economic
services likely to result in a more immediate increase in government
revenue.
91
Kenya, Report of the Planning Committee, p. 6.
92
Kenya Colony, ‘Development Programme 1954–57’, pp. 6–13.
Table 6.7. Expenditure by the DARA, 1946–53 (current prices)*
Portfolio Total expenditure % of total
Chief Secretary £3,148,955 11.49
Legal Affairs £27,493 0.10
Finance and Development £10,187 0.04
African Affairs £108,860 0.40
Agriculture, Animal Husbandry and Water £8,336,255 30.42
Resources
Internal Security and Defence £1,155,345 4.22
Local Government, Health and Housing £2,759,474 10.07
Education, Labour and Lands £5,049,959 18.43
Forest Development, Game and Fisheries £539,393 1.97
Commerce and Industry £851,272 3.11
Works £4,570,848 16.68
Community Development £51,598 0.19
Other (Unallocated) £794,696 2.90
TOTAL £27,404,345 100
* This table provides total development expenditure from 1946 to 1953, of which the figures given
above were a part.
Source : Gardner, ‘Unstable Foundation’, p. 64. Calculated from Kenya Colony, ‘Development
Programme 1954–57’, p. 24.
The allocation of total expenditure also shows little increase in the pri-
oritization of social services. Tables 6.8 and 6.9 show that the proportion
of government expenditure on social services was lower in 1945–49 than
in 1930–34, and roughly similar to 1925–29. Up to the end of the 1940s,
therefore, financial constraints prevented Kenya’s new development policy
from translating into any dramatic change in the allocation of public ex-
penditure from the inter-war period.
Northern Rhodesia faced similar problems despite the copper boom
during and after the war.93 In 1943 the colonial administration began a
systematic effort to assess development needs across the territory. In Feb-
ruary of that year the Chief Secretary sent a memorandum to Provincial
Commissioners, who were asked to coordinate with their District Com-
missioners (in consultation with Africans, missionaries, and other unof-
ficials) in the preparation of district and provincial development plans.
93
Copper production increased sharply to meet war-time demand from 1937 to 1943.
This also led to a dramatic increase in revenue during World War Two. See Baldwin, Eco-
nomic Development and Export Growth, p. 32; Northern Rhodesia, ‘Memorandum on the
Development of Social Services for Africans’, 1945, in TNA CO 795/156/1.
administration
£ % £ % £ % £ % £
1945 1,266,845 46 801,993 29 383,861 14 48,009 2 2,727,121
1946 1,310,139 42 792,256 26 534,425 17 72,600 2 3,092,559
1947 1,361,247 46 735,743 25 371,126 13 5,290 0 2,945,047
1948 1,648,703 49 647,980 19 420,691 12 54,228 2 3,397,426
1949 1,669,004 53 558,462 18 514,623 16 8,947 0 3,141,178
Sources: Calculated from Kenya, Blue Books, 1945–47; Appropriation Accounts, 1947–49; Annual Reports, 1945–49; Feinstein, Statistical Tables of National Accounts, Table 61.
151
Table 6.9. 1940s expenditure compared with inter-war expenditure in Kenya (%)
Defence, policing, Infrastructure Social CDW Other
and administration
1945–49 47 23 15 1 15
1930–34 41 24 19 0.4 9
1925–29 50 28 15 0 7
1901–10 54 41 4 0 1
These development plans were to be examined by a technical sub-com-

mittee of the Native Development Board, consisting of the Director of
Medical Services and the heads of the African Education, Agriculture and
Forestry, and Veterinary Departments. The same sub-committee coordi-
nated with social and economic services departments of the colonial ad-
ministrations to create their own development plans. The colony’s first
ten-year development plan noted that ‘this represented the first major
effort at long-term planning’.94
Also in 1943, the Acting Governor first proposed the establishment of
Development Centres in each district. These were intended to facilitate
cooperation and coordination between the different officials and depart-
ments who would be involved in executing the development plan. In
particular, they were intended to train Africans to provide the health, edu-
cation, and agricultural services which the colonial administration hoped
to extend throughout the rural areas of the territory. The plan anticipated
that when the scheme was complete, there would be 1,600 teams of four
Africans each dispersed throughout the country. Each team would consist
of a teacher, a dispensary assistant, a sanitary assistant, and a rural assist-
ant. It was hoped that Africans returning from military service would be
the primary trainees at the development centres.95
In 1944 G. F. Clay, a Joint Development Adviser to Northern Rho-
desia and Nyasaland, arrived to investigate development proposals for
the two territories. In an expression of the new principles of develop-
ment policy advocated in London under the CDW Act of 1940, his first
report, published in 1945, argued that ‘social development and the basic
services, under modern conceptions of the responsibilities of Colonial
Powers, must be afforded to the indigenous populations of colonial pos-
sessions irrespective of the capacity of those populations to support such
94
Northern Rhodesia, Ten-Year Development Plan 1947, p. 3.
95
For more detail, see Governor to Secretary of State, 14 September 1945, in TNA CO
795/156/1.
services’.96 In particular, Clay emphasized the need to expand social serv-
ices into areas beyond the Copperbelt, which had been neglected by the
colonial administration. In health services, for example, Clay argues that
‘it is only necessary to contrast the condition of the African labour on the
Copperbelt and of the Askari on leave from the Forces, with that of the
population remaining in rural areas to realise that one of the fundamen-
tal needs is for a large increase in the health services available in rural
areas’. The development of a network of small rural dispensaries should
therefore be a top priority, ahead of the construction of large central
hospital accommodation.97
Before the colony’s first development plan could be finalized, financial
reality set in. In anticipation of financial difficulties that new develop-
ment plans might face, the report of the Joint Development Adviser
(which argued that basic services needed to be provided for all) also observed
that ‘Northern Rhodesia, by virtue of its geographical position, its relatively
small population scattered over a large area, and its comparatively poor
soil, must avoid any tendency to extravagance in planning the basic serv-
ices either in the organization or in the recurrent cost of such services.’
The administration’s aim, according to the report, ‘must be the greatest
good to the greatest number at minimum cost’.98
Similarly, the final ten-year development plan argued that the propos-
als compiled by the district and provincial commissioners ‘represented an
ideal at which to aim but that their cost was far beyond the capacity of the
Territory to meet’.99 The plans created by the departments also had to be
cut. The health department’s plan, for example, was cut from £2,817,000
over ten years to £1,598,000. These cuts were purely due to financial
constraints. The final development plan stated that ‘government accepted
the full plan prepared by [the health department] as being in no way ex-
travagant and as representing the minimum at which to aim if the health
services of the Territory are to be considered satisfactory. The reductions
in the plan have been made with regret, and solely because funds are lack-
ing to pay for it.’100
These cuts were reflected in the final allocation of expenditure in the
1947 development plan, shown in Table 6.10. While health and African
education represented the largest single items of expenditure in the pro-
posed development plan, the proportion of overall expenditure on social
services (33 per cent) was not much different from that in the recurrent
96
Clay, Memorandum, p. 6.
97
Ibid., pp. 7–8.
98
Ibid., p. 6.
99
Northern Rhodesia, Ten-Year Development Plan, p. 3.
100
Ibid., p. 9.
Table 6.10. Northern Rhodesia development plan expenditure (current prices)
Heads of expenditure Expenditure %
Health £1,598,000 12.3
African Education £1,486,000 11.4
Publications Bureau £50,000 0.4
European Education £250,000 1.9
Agriculture £776,000 6.0
Forestry £314,000 2.4
Veterinary £518,000 4.0
Game, Tsetse, Fish £500,000 3.8
African Rural Development £1,500,000 11.5
Roads, Air, Water Transport £1,150,000 8.8
Aerodromes £350,000 2.7
Posts, Telegraphs, etc. £320,000 2.5
Water Supplies £670,000 5.2
Irrigation £300,000 2.3
Agricultural Development, Marketing and £500,000 3.8
Secondary Industries
African Urban Housing £1,000,000 7.7
General Building—Public Works Dept Organization £1,300,000 10.0
Loans to Local Authorities £250,000 1.9
Unallocated balances £168,000 1.3
TOTAL £13,000,000
Source : Northern Rhodesia, Ten-Year Development Plan, p. 86.
expenditure of the early 1930s (when social services were on average 19

per cent of the total). Further, the development plan represented merely
the ambitions of the colonial administration. As in Kenya, officials were
forced to scale back their plans when the funds they had hoped would pay
for them were less than predicted. Of the £13 million the colonial admin-
istration originally intended to spend on the development programme,
£2.5 million was to come from the Colonial Development and Welfare
Fund, £5.5 million from Northern Rhodesia’s current and future reserves,
and up to £5 million from loans raised in London.101
From early in the development plan’s existence, officials were aware
that potential fluctuations in the copper price (and by consequence fluc-
tuations in the revenue) might limit the available funds.102 Furthermore,
101
Ibid., p. 6.
102
A. B. Cohen to H. F. Cartmel Robinson on Colonial Office discussions with North-
ern Rhodesia governor on Development Plan, 17 July 1946, in TNA CO 795/156/1.
just like in Kenya, the funds from London provided less of the total fund-
ing for the plan than anticipated. From 1947 through to June 1956,
Northern Rhodesia received a total of £3,086,401 in Colonial Develop-
ment and Welfare funds. While this was more than the £2.5 million origin-
ally anticipated, the increase of £586,401 was far less than the increase in
the territorial funds allocated to the plan. Instead of the £5.5 million ini-
tially intended to come from Northern Rhodesia’s own surpluses and
reserves, the colony had spent £27,201,125 by the end of the 1955–56
fiscal year.103 By 1953, the plan had been revised three times for almost
exclusively financial reasons.104 Rising costs and population growth had
increased the expenditure required to implement the plan, which resulted
in an adjustment of priorities.105 In the 1953 Development Fund esti-
mates, social services had been reduced from 33 per cent of the total to 18
per cent of the total.106 The proportion of expenditure devoted to African
education suffered a particularly large cut, dropping from just over 11 per
cent of the total in the initial plan to under 3 per cent by 1953.107 Alloca-
tions for health services fell from 12 per cent to 6 per cent.
The colony’s total expenditures also showed no increase in the propor-
tional allocation given to social services. Tables 6.11 and 6.12 show that,
as in Kenya, the percentage of total expenditure dedicated to social serv-
ices did not increase compared with the inter-war period.108 Northern
Rhodesia’s attempt to make the provision of social services to the majority
a top priority had not succeeded by 1950. Due to the limited financial
resources at their disposal, neither colonial administration was capable of
expanding to the degree that the governments of developed countries did
after World War Two.
W. Arthur Lewis considered the small scale of both political and eco-
nomic units another central problem of colonial governance. Colonial ad-
ministrations, he argued, were ‘too small and overburdened with trying to
maintain a full service at a low level of efficiency’.109 However, demand for
103
Northern Rhodesia, Financial Report for the Financial Year ended 10th June 1956, p. 2.
104
Northern Rhodesia, Revision of the Ten-Year Development Plan, p. 3. See also corres-
pondence in TNA CO 1015/1040.
105
Northern Rhodesia, Revision of the Ten-Year Development Plan, p. 9.
106
Northern Rhodesia, Approved Estimates for the Year 1953, p. 4.
107
Curiously, European education moved rapidly up the priority list, receiving nearly
10 per cent of total expenditure under the 1953 estimates, compared with less than 2 per
cent in the 1947 plan.
108
It should be noted that the social spending figures for Northern Rhodesia do not
include expenditure on CDW plans, which are accounted for separately in Northern Rho-
desia’s budgets. This expenditure was an average of 5 per cent of the total in 1945–49. As
shown above, only a relatively small proportion of this total was devoted to social
services.
109
156
Crisis Management in Colonial Public Finance
Table 6.11. Public expenditure in Northern Rhodesia (in constant 1913 prices)
administration
£ % £ % £ % £ % £
1945 340,447 38 175,507 20 187,726 21 0 0 887,428
1946 417,838 41 199,966 20 187,322 18 38,422 4 1,019,264
1947 500,404 34 424,870 29 231,978 16 79,996 5 1,479,808
1948 607,273 32 507,337 26 274,329 14 121,463 6 1,923,313
1949 629,413 26 682,021 28 347,261 14 225,391 9 2,437,378
Sources: Calculated from Northern Rhodesia, Blue Books, 1945–48; Financial Report 1949; Feinstein, Statistical Tables of National Income, Table 61.
Table 6.12. 1940s expenditure compared with inter-war expenditure in
N. Rhodesia (%)
Defence, policing, Infrastructure Social CDW Other
and administration
1945–49 34 24 17 5 18
1930–34 41 24 19 7 9
1925–29 51 29 18 0 3
1901–10 78 10 3 0 9
additional public services continued, despite the resource constraints which

prevented the goals of colonial administrations from becoming a reality.
*****
The new colonial development policy first introduced under the 1940
Colonial Development and Welfare Act was supposed to represent a kind
of ‘New Deal’ for the tropical Empire. Its emergence was driven by a
combination of factors: fear that the unrest of the 1930s in the West
Indies and Africa would escalate; a desire to pre-empt the claims of Ger-
many for the return of its colonial territories; and, finally, a global shift in
political economic thought which envisaged a larger and more interven-
tionist role for the state. The last emerged in the developed world through
the expansion of social services and other state interventions during the
Depression. Like the New Deal in the United States, the new colonial
development and welfare policies emphasized the provision of basic social
services to everyone in the dependent territories, and the development
plans composed by colonial officials aspired to a rapid expansion in edu-
cation and health services for indigenous inhabitants of the tropical ter-
ritories. This was not only true in Kenya and Northern Rhodesia, but also
in West Africa. Kay’s exhaustive study of the political economy of the
Gold Coast documents the dramatic shift from the colony’s first develop-
ment plan in the 1920s, which was almost entirely devoted to infrastruc-
ture, and the development plans of the 1950s, in which education and
other social services were prominent.110
The implementation of these plans was, however, influenced by the
limited financial resource available from both British and local sources. In
response, development plans were often amended and revised to fit the
financial reality of post-war colonial development. The revisions priori-
tized infrastructure and economic services which were more likely to lead
to a rapid increase in revenue. Social services, on the other hand, were
110
Kay and Hymer, Political Economy.
likely to increase revenue only in the long term while in the short term
they committed colonies to greater recurrent expenditure. Colonial ad-
ministrations feared that this recurrent expenditure would become unsus-
tainable, particularly if a new downturn decreased their revenue collections.
Despite the rhetoric of a New Deal for the colonies, there was little change
in the allocation of total expenditure in the colonies during the so-called
‘second colonial invasion’ of the late 1940s.
Some were better able to increase their spending on social services than
others. By the late 1930s per capita spending on social services in the
Gold Coast was 7s 4d, as compared to around 1s 9d in Nigeria and
Nyasaland. By then the Gold Coast was the wealthiest colony in Africa,
and its greater financial resources allowed it greater freedom.111 However,
its spending on social services represented a proportion of total expendi-
ture—19 per cent in 1947—similar to that of Kenya and Northern Rho-
desia. As in most colonies, infrastructure and economic services were still
the top priority.
Colonial administrations responded to these financial constraints by
delegating increasing responsibility for social services to local authorities
and their newly established treasuries. Their expansion and their impact
on colonial development will be the subject of the next chapter. As Chap-
ter 7 will show, it is likely that this delegation did lead to the expansion of
social services in at least some local areas. However, they were unable to
increase the level of expenditure very dramatically, and the general con-
clusion of critics at the end of the 1940s was that insufficient capital had
severely limited the potential of colonial development policies to effect
real change, either economic or social. As W. Arthur Lewis wrote in 1947,
‘What is the prospect of rapid colonial development? Frankly I do not
think that it is very great at present. There has been much talk and much
paper planning, but very little expenditure.’112
111
112
PA RT I I I
F RO M S E L F  S U F F I C I E N C Y
TO N AT I O N  B U I L D I N G
7
‘Cash, Competence, and Consent’:
Building Local Governments
Despite their expanding ambitions, colonial administrations were unable

to marshal sufficient resources to meet the demands of an increasingly
vocal and organized African population. The history of African unrest
and collective action in the post-war period is often co-opted into a
broader history of nationalist movements, but as Cooper points out these
demands ‘were not, at first focused on taking over the state. But they were
focused on what states actually did.’1 The object was ‘freedom from want’
rather than ‘freedom’. Unable to implement development plans on the
scale they had envisioned, colonial states began to rethink the institu-
tional structures of service provision. Meanwhile, trade disruptions and
inflation during the war limited the benefits from a growing demand for
Africa’s produce, and a wave of urban strikes and unrest across the conti-
nent tested already stretched colonial institutions.
Such challenges grew following the end of the war with the return of
Africans from military service and a growing class of educated Africans
who were, as one colonial official put it, ‘no longer content with the old
primitive and easygoing village life’.2 African nationalist movements con-
tinued to gain support, becoming better organized through the 1940s
and 1950s. Welfare associations and trade unions began to organize them-
selves for the first time into political parties. Their leaders demanded pol-
itical and constitutional reforms which would give the African majority
greater influence over legislation and the allocation of public resources.3
The emergence of more organized nationalist movements in the colonies,
along with other factors, including the increasing economic importance of
Europe relative to the Empire, gradually led the British government to
1
Cooper, Africa since 1940, p. 37.
2
Hudson, ‘Notes on African Local Government in Northern Rhodesia’, in TNA CO
1015/524.
3
For a continent-wide perspective on this transition, see Cooper, Africa since 1940, chs.
2–3; Reid, A History of Modern Africa, pp. 258–69.
162 From Self-Sufficiency to Nation-Building
reconsider its timetable for the transition to self-rule by its African colo-
nies.4 In 1947 the report of the Caine/Cohen committee argued that most
colonies would complete the transition to responsible government within a
generation.5 The transfer of power in the Asian colonies in the late 1940s
and early 1950s made the problems of colonial rule in Africa seem all the
more urgent, and the eventual transition to responsible government almost
inevitable.6
One concern was that the colonies, once independent, would not be
able to survive as independent nations. Colonial administrations had
from the beginning attempted to make their territories financially self-
sufficient. They had used a wide range of policy tools to make this goal a
reality, including the introduction of direct taxation, the prioritization of
economic services in public expenditure and the expansion of local gov-
ernment treasuries. The British government was painfully aware that de-
colonization would be the ultimate test of whether these policies had
worked. There was considerable concern that they had not, and the post-
war period saw new efforts to put the tropical Empire on a more secure
financial footing. This time, policies intended to make colonies self-suffi-
cient were also meant to pave the way for self-government.
The institutional innovations intended to achieve this goal had ex-
plicitly fiscal motivations. The reform of local governments at district
level and below was intended to bring public services closer to the tax-
payer, who might then be willing to pay more. Administrators needed
to find another way of managing demands for additional social serv-
ices. Unable to extend their own resources any further, they turned to
local authorities, which were expanded and given new powers to raise
revenue along with new responsibilities for the provision of social and
economic services within their jurisdictions. At the same time, strength-
ening regional links between colonies was an attempt to create larger,
fiscally sustainable states with more diverse economies capable of with-
standing external shocks. The current chapter will focus on the reform
of local government, while regional integration is examined in the next
chapter.
The reform of local authorities in Africa from the late 1930s has been
widely studied as an attempt by colonial governments to provide an outlet
4
For a discussion of the relative influence of nationalist pressure, international relations,
and economic issues in decolonization, see Darwin, End of the British Empire; Louis and
Robinson, ‘The United States and the Liquidation of British Empire in Tropical Africa’, pp.
47–55.
5
Ibid., pp. 42, 49.
6
Hyam, Britain’s Declining Empire, p. 104.
Building Local Governments 163
for the political activism of a growing class of educated Africans.7 This

chapter will place these events in the context of an intensifying competi-
tion between groups and regions for the allocation of development re-
sources which had become the centre of political debate from the inter-war
period onwards.8 In an effort to manage political agitation at the central
government level, local and municipal councils were granted increasing
responsibilities for the provision of public services. They were also author-
ized to raise revenue through local rates and fees, which colonial officials
believed would encounter less political resistance than additional taxation
by the central government.
Though data on local government finance are often scarce, the chapter
will also provide a preliminary assessment of the developmental effects of
delegating service responsibility to local authorities. What little is known
about local government budgets and activities during this period sug-
gests that at least some local authorities were able to significantly expand
the services provided in their areas by raising revenue through local rates
and other fees. Other authorities, located farther from labour or export
markets, could raise much less revenue and made little headway in im-
proving services. This disparity increased existing inequalities between
wealthier and poorer areas. Local authorities also spent a disproportion-
ate amount of their resources on administration, primarily the salaries of
chiefs and other public officials, sometimes leaving little to be spent on
services. In addition, increasing the responsibility and resources of local
governments led to the emergence of corruption and rent-seeking in
local government which continued to influence its success even after
independence.
E A R LY R E F O R M S O F L O C A L A N D M U N I C I PA L
G OV E R N M E N T, 1 9 2 5  3 8
The delegation of responsibility to local authorities in the inter-war period

did not represent a dramatic departure from the general pattern of colo-
nial governance in the pre-war period, in which a weak central state found
local delegates of various kinds to fill gaps left by its own administrative
7
Among others, see Atieno Odhiambo, Politics and Nationalism in East Africa, ch. 4;
Cooper, Africa since 1940, p. 49; Kitching, Class and Economic Change in Kenya, p. 188;
Lonsdale, ‘Political Associations in Western Kenya’, pp. 611–13; Lonsdale, ‘Origins of
Nationalism in East Africa’, pp. 121–2; Lucas, ‘The Dilemma of Local Government in
Africa’, pp. 193–208; Pearce, Turning Point in Africa, pp. 141–59.
8
Lonsdale, ‘Origins of Nationalism in East Africa’, p. 136.
incapacity. In the early years of colonial administration, however, local

government entities were relatively weak themselves and relied on the
central government for leadership and financial resources. Delegation was
ad hoc and relied on district officers or chiefs who were in the direct
employ of the central administration. By the inter-war period, however,
colonial administrations began to look more seriously at delegating power
outside their own hierarchies and giving local administrations more au-
tonomy in governing their jurisdictions.
This change in policy found its voice in a revival of support for indirect
rule as defined by Lord Lugard in 1922.9 Indirect rule was seen in many
quarters as the means by which traditional African political institutions
could make the transition to bureaucratic local government.10 Perham
defined indirect rule in 1935 as ‘a system by which the tutelary power
recognizes existing African societies, and assists them to adapt themselves
to the functions of local government’.11 As a Northern Rhodesian official
noted at a Rhodes-Livingstone conference on the subject, ‘we have aimed
to adapt the Old to the New and not to substitute the New for the
Old’.12
However, there were significant difficulties in applying indirect rule,
which relied on the continuity of traditional institutions in a rapidly
changing economic and political climate, in which labour migration,
mission education, and increasing inequality threatened to undermine
existing social and political structures. Lugard believed the changing cli-
mate provided an urgent need for strong local authorities which could, in
his words, ‘avert [the] social chaos’ caused by detribalization.13 Colonial
officials hoped the new native authorities might become an alternative
outlet for the political agitation of mission-educated Africans. However,
Lord Lugard’s conception of indirect rule saw little place for Western-style
education. According to Brown, ‘Lugard quotes the results of a European
style education in India as a warning against the creation of a disruptive
intelligentsia in rivalry with the accepted traditional rulers of the country.’
Lugard particularly blamed the provision of literary education for the rise
of Indian nationalism.
This, however, represented a key flaw in the idea of indirect rule paving
the way for the adaptation of African institutions to bureaucratic govern-
ment, which would require the absorption in some capacity of the educated
9
Perham, ‘Some Problems of Indirect Rule’, p. 9.
10
Apthorpe, ‘Introduction’, p. v.
11
12
Billing, ‘Northern Rhodesia’, p. 1.
13
Lugard, Dual Mandate, p. 217.
classes. One solution was to create urban areas along European lines
which would draw in educated Africans; the other was to somehow inte-
grate educated Africans into indigenous institutions.14 The second was
one goal of local government policy in colonial Africa in the inter-war
period.
The colonial administration in Kenya viewed the establishment of
Local Native Councils (hereinafter LNCs) as merely an adaptation of
indirect rule, though historians have considered it a departure from the
principle.15 In the opening address to that session of the Legislative
Council, Governor Coryndon proclaimed with regard to the 1924
Native Authority Amendment Ordinance that ‘it is a cardinal principle
of native administration that natives should be administered through
their own chiefs. Kenya is a long way behind the times in the applica-
tion of this principle’. According to Coryndon, the Bill had two pur-
poses: (1) ‘to encourage and develop a sense of responsibility and of
duty towards the state among the chiefs and elders of the tribes’, and
(2) to give educated Africans ‘a definite avenue along which to de-
velop’.16 In his own address, the Chief Native Commissioner argued
that in encouraging the development of native administration, the co-
lonial government needed ‘to adhere as closely as we can to the ideas
and methods that are known to the people. We do not want to destroy
what organization they have without putting something in its place; we
want rather to build on their ideas, developing the good points and
eliminating the bad.’ At the same time, ‘we must provide an avenue for
the expression of native opinion other than the opinions only of the
chiefs and elders’.17
According to the terms set down by the Ordinance, Local Native
Councils consisted of the District Commissioner and/or district officers,
along with such location headmen and other Africans as the governor
might appoint. The local population could nominate members for the
council, and their recommendations were sent to the governor along with
those of the District Commissioner.18 The central administration retained
significant authority over LNCs. District Officers, for example, were ex
officio presidents of LNCs and had the right to veto LNC policies.19
14
Brown, ‘Indirect Rule’, pp. 54–5.
15
See, for example, Hinden, Local Government, p. 126.
16
Governor’s Opening Address, quoted in Kenya Legislative Council, Minutes of Pro-
ceedings, 20 May 1924.
17
Kenya Legislative Council, Minutes of Proceedings, 20 May 1924.
18
Hinden, Local Government, pp. 127–8.
19
Kitching, Class and Economic Change, p. 188; Kenya Legislative Council, Minutes of
Proceedings, 20 May 1924; Pim, Report on Kenya, p. 103.
However, it did expand the powers of local administrations. LNCs were,

as Lonsdale observes, authorized to make by-laws ‘on matters of local
concern, including land-use, and to levy rates to support education and
the development of local communications, agriculture and so on’.20
Furthermore, LNCs represented an innovation in African local govern-
ment in explicitly encouraging educated Africans and other groups to
play a role in local government.21 Hicks describes LNCs as a break ‘with
the attempts to build solely on the traditional elders’ councils’. Members
were appointed ‘so as to represent as large a range of relevant interests as
possible’.22 Lord Hailey noted that in the inclusion of a wide variety of
interests, ‘Kenya anticipated the movement made in the same direction
by the British dependencies.’23 Kitching argues that LNCs ‘were seen
quite explicitly as hubs of progress in the Reserves. As the thirties wore
on, the LNCs in the most “advanced” districts were increasingly domin-
ated by educated Africans who saw their function as being to use Council
resources to the limit in order to further African progress’, through such
services as health, education, agricultural and livestock improvement, and
support for African businessmen.24
By 1945 the system outlined in the 1924 legislation was well estab-
lished, with twenty-six LNCs operating across the colony.25 Lord Hailey
noted with regard to Kenya that ‘there is no doubt as to the importance
which the Councils had . . . acquired in the life of some of the more ad-
vanced districts. The matters at issue were freely and keenly debated, and
there was a growing tendency to discuss issues from a political
standpoint.’26
Similar developments were taking place in Northern Rhodesia, though
at a slight delay. In 1929, the passage of the Native Authorities Ordinance
and the Native Courts Ordinance initiated the process of giving greater
autonomy to African institutions at the local level. The Ordinances pro-
vided for the appointment of chiefs and the establishment of Authorities
and Courts by the Governor. Chiefs were given legal status in their judi-
cial and executive capacities.27 Working under the supervision of the Pro-
vincial Administration, Native Authorities were to maintain order in their
20
Lonsdale, ‘Origins of Nationalism’, p. 128.
21
Hinden, Local Government, p. 126; Pim, Report on Kenya, p. 107.
22
23
24
25
Hinden, Local Government, p. 128.
26
27
jurisdictions, towards which goal they were permitted to issue orders for
any of the following purposes: controlling the sale of liquor and firearms;
controlling gambling; prohibiting acts likely to cause a breach of the
peace; preventing the pollution of water and controlling the cutting of
trees; preventing the spread of disease; suppression of crime; engaging
paid labour for public works; controlling the migration of Africans; regis-
tration of births and deaths; controlling the movement of livestock; sup-
pressing prostitution; making inter-village roads; assisting in tax collection;
controlling the burning of grass or bush; exterminating tsetse fly and
other pests; requiring Africans to cultivate sufficient land; and any other
purpose designated by the Governor in the Gazette.28
The structure of Native Authorities in Northern Rhodesia attempted,
at least, to follow the principles of indirect rule more closely than Kenya’s
LNCs. In establishing Native Authorities, the government emphasized
the importance of continuity with indigenous institutions. Pim reported
that ‘great stress is being laid on the principle of tribal unity and of re-
establishing the old chain of authority, wherever it existed, from the chief
through his sub-chief to village headman and elders’.29 The administra-
tion attempted as far as possible to revise the boundaries of Native
Authority jurisdictions in order to make them fit with these principles.
Where this was not possible, however, Native Authorities were created by
combining segments of different tribes.30 As in the previous period, Barot-
seland continued to differ from the rest of Northern Rhodesia in terms of
its administration, which was more elaborate than Native Authorities
elsewhere and retained greater autonomy. The 1929 Ordinances did not
apply to this area and there were no major changes in its status in that
year.31
Despite its emphasis on continuity, the colonial administration in
Northern Rhodesia hoped to incorporate more than just traditional Af-
rican authorities into local government. As in Kenya, African associa-
tions of various types had proliferated in the 1920s and 1930s, and
colonial authorities were anxious to give Africans who might join such
associations an alternative outlet with which to voice their opinions
(while slowing the growth of the associations).32 As a colonial official
noted later, ‘political associations were being formed and there was a risk
28
Marquard, ‘The Problem of Government’, pp. 252–3; Pim and Milligan, Report on
Northern Rhodesia, pp. 180–1.
29
Address by Sir Alan Pim (1938), in RHO MSS Afr.s. 1002.
30
Ibid.; see also Pim and Milligan, Report on Northern Rhodesia, p. 182 and Willis, ‘The
Administration of Bonde’, p. 53.
31
Pim and Milligan, Report on Northern Rhodesia, pp. 191–3.
32
Rotberg, Rise of Nationalism in Central Africa, pp. 130–3.
that, as had happened elsewhere, constitutional development at the

centre would outpace the building up of that solid and strong base of
local government institutions without which there could be no stability
for the mass of the people’. There needed to be an outlet for ‘all this
energy’ in local government ‘if unpleasant eruptions were to be
avoided’.33
This continued to be an aim of local government policy through the
rest of the inter-war period. Pim emphasized in his 1938 report that
the central administration should encourage the development and au-
thority of the chiefs’ councillors. Membership of the councils was de-
termined by local custom, and their role had been gradually
undermined by the tendency of some chiefs to not consult them, the
long distances councillors needed to travel to chiefs’ villages, and the
lack of provision for any stipend or salary for them.34 The resolution
of these obstacles was important, Pim argued, because ‘the strengthen-
ing of the position of councillors may provide an opportunity for the
younger and more educated men back from the mines and other
labour centres’.35 A 1939 circular endorsed a recommendation made
by the Provincial Commissioners’ conference that year that Native
Authorities should be encouraged to select representatives of ‘the more
progressive elements of their areas’ as members of their Councils.36
Putting this recommendation into practice was problematic, however,
as, according to Lord Hailey, ‘the more enterprising of the people tend
to migrate to the industrial areas’.37
Unlike the 1924 Ordinance in Kenya, however, the 1929 Native Au-
thorities Ordinance in Northern Rhodesia made no provision for raising
revenue independent of central administration grants. Pim and others
blamed this for the limited initiative of the newly created Native Author-
ities. This problem was eventually remedied by the passage of the 1936
Native Authorities Ordinance, which provided for the establishment of
treasuries.38
33
Hudson, ‘Notes’, in TNA CO 1015/524.
34
35
Pim and Milligan, Report on Northern Rhodesia, pp. 187–8. The problem of the lack
of remuneration was later partially remedied by the ‘somewhat unorthodox device’ of em-
ploying full-time departmental councillors with paid salaries for performing supervisory or
administrative functions. See Hudson, ‘Notes’, in TNA CO 1015/524; Northern Rho-
desia, Minutes of the Administrative Conference of Provincial Commissioners, pp. 13–14;
Northern Rhodesia, Report of the Financial Relationship Committee, p. 36.
36
37
38
E N D S W I T H M E A N S : E S TA B L I S H M E N T O F L O C A L
TREASURIES
Many viewed treasuries as central to the transformation of African

traditional authorities into more bureaucratic local government regimes.
Increasing the financial, along with the political, autonomy of local gov-
ernment also allowed for the better separation of services offered by the
central versus local governments. Just as the imposition of direct tax-
ation was considered the ‘real test of effective administration’ for the
central government, the establishment of local authority treasuries was
considered the biggest challenge in restructuring African local author-
ities described in the previous section.39 Sufficient financial resources
were essential if local authorities were to be made responsible for public
services of any kind.
Further, colonial officials believed the management of public funds
to be a vital part of the educational value of expanding the purview of
local government. It was anticipated that after the establishment of
treasuries, local officials would not only learn how to manage public
funds, they would also be able to consult with their constituents about
how to raise public revenue and allocate public expenditure. Their con-
stituents would see the immediate returns from the payment of taxes,
and might therefore be willing to pay more for increased services,
which would make increasing the overall tax burden less politically
contentious than if such an increase were to come from the central
administration alone. Margery Perham argued that ‘above all, the treas-
ury system has enabled the native administrations to make all kinds of
new activity their own. Council halls, schools, roads, bridges and
model farms, even where their use is not yet fully understood, are the
visible expression of their own tribal unity and of their partnership
with the Government.’40 As Kenya’s Chief Native Commissioner put it
during debates about the 1924 Ordinance, ‘it is hoped that we shall
give natives a proper sense of authority and responsibility by giving
them financial responsibility so that they may realise the actual value of
the services they are receiving, and the value of the help which they
may themselves give’.41
Lord Lugard had acknowledged the importance of financial re-
sponsibility in local administration. In The Dual Mandate he wrote
that ‘there are 50 such treasuries in the Northern provinces of Ni-
geria, and every independent chief, however small, is encouraged to
39
Mungeam, British Rule in Kenya, p. 45.
40
41
Kenya Legislative Council, Minutes of Proceedings, 20 May 1924.
have his own’. They collected revenue from market dues, slaughter-
house fees, forest licences, the fees and fines of African courts, etc.
From this revenue they paid the salaries of the Emir and his council,
native court judges, village heads, police, prison warders and other
employees, as well as for the construction and maintenance of schools,
dispensaries, roads, and other infrastructure.42
Similarly, Local Native Councils were authorized from 1924 to
raise revenue in the form of a local ‘rate’, which was collected in addi-
tion to central government taxation. In contrast to local treasuries
elsewhere in Africa, the local rate would prove to be the largest source
of revenue for Kenya’s LNCs.43 They also received some revenue from
the rent of trade plots and the fees for services in the Reserves.44 By
1926, local rates represented just over 64 per cent of the total revenue
collected by all LNCs, compared with rents and fees, which repre-
sented nearly 26 per cent.45
Some LNC treasuries managed to expand this basic set of revenue
sources into a considerable variety of sources. According to the 1949
budget of the North Nyanza LNC, revenue sources in addition to
local rates included fees for cart licences, traders’ licences, liquor li-
cences, market fees, rents for land and buildings, native tribunal fees
and fines, sale of produce and water, and forest and mineral revenues,
among other sources.46 North Nyanza had the largest budget of the
twenty-six LNCs and therefore its revenue sources can be expected to
be more diverse than those of others. However, its budget does pro-
vide a glimpse of the expansion and diversification of LNC revenue
sources in the twenty-five years following the establishment of local
treasuries.
Northern Rhodesia was slower to allow its native authorities to estab-
lish their own treasuries, despite much discussion of the idea throughout
the 1930s. A 1933 letter from the Secretary of Native Affairs noted that
‘it is generally admitted that the next step in the development of the
system of Indirect Rule must be Native Treasuries but most officers of the
Provincial Administration are inclined to think that the time has not yet
arrived when the authorities can be entrusted with the collection of
native tax and the handling of public funds’.47 He pointed out that
42
Lugard, Dual Mandate, p. 201.
43
44
45
Kenya Colony, Native Affairs Annual Reports.
46
‘North Nyanza Local Native Council Budget’.
47
Secretary of Native Affairs to Chief Secretary, 20 June 1933, in NAZ SEC1/728.
Nyasaland, with a ‘more educated and advanced’ population, had not yet
introduced them, and that the colony’s financial position could not jus-
tify the allocation of large grants to local authorities. In 1934, a confer-
ence of District Commissioners in Kafue-Batoka Province agreed ‘in
principle to the establishment of Native Treasuries wherever possible’.48
Though the conference made a number of proposals with regard to po-
tential sources of revenue and priorities of expenditure, they were not
accepted by a colonial administration which, as the Secretary of Native
Affairs noted again in 1935, believed that Native Treasuries were needed
in general, but that the Native Authorities were not yet capable of taking
on the task.49
By 1935, however, the colonial administration was considering more
seriously what Native Treasuries would look like in the future, in terms of
where they would get their revenue, estimating how much revenue each
would get under various proposed schemes, and how Native Authorities
would spend it.50 The creation of revenue sources for Native Treasuries
involved both the creation of new sources and the diversion of revenue
from the central administration. In 1936, the administration determined
that the revenue of the treasuries would be divided into two categories:
(1) revenue which Native Treasuries collect on their own behalf, e.g. court
fees or fines, and (2) those which they collect for the central administra-
tion, e.g. game licences, bicycle licences, arms licences, and dog licences.
Revenue from the latter would be paid into General Revenue but then
repaid to Native Treasuries. In addition, Native Authorities would be al-
located 10 per cent of the poll taxes paid by Africans in their areas the
previous year.51
When Native Treasuries became reality in Northern Rhodesia in 1937,
Lord Hailey described it as ‘the real test of the capacity of the Northern
Rhodesia native authorities’ because ‘it is in the conduct of the native
treasury that the native authorities find the greatest difficulties in dis-
charging the responsibilities which the present policy of native adminis-
tration assigns to them’.52 Native Authority treasuries relied on several
sources of revenue, including court fines, licence and permit fees, market
fees, and levies on property owned. But the most significant source of
48
Minutes of District Commissioners’ Conference, 22–26 October 1934, in NAZ
SEC1/728.
49
Secretary of Native Affairs to Chief Secretary, 24 January 1935, in NAZ SEC1/728.
50
See correspondence between Provincial Commissioner and Chief Secretary, in NAZ
SEC1/728.
51
Northern Rhodesia, Native Treasuries (Lusaka, 1936), p. 3.
52
Lord Hailey, Native Administration, p. 283.
Native Treasury revenue was their 10 per cent share in the poll tax.53 In
order to ensure that these monies would be used properly, the colonial
administration established an annual training course for chiefs on the
management of public funds.54
In both territories, the establishment of local authorities involved
some reorganization of the boundaries of Native Authority jurisdic-
tions. The size of the area to be governed was a matter of considerable
discussion, just as the size of the colonies themselves became an issue
in debates about federation, amalgamation, and closer union.55 In
Northern Rhodesia, the administration found that some of the original
Native Authorities as codified in 1929 ‘controlled so few people that
they were unable to support independent treasuries and could never
become effective units of local government’.56 Similarly, the 1949 Fi-
nancial Relationship Committee in Northern Rhodesia warned that
‘many of the present units are completely uneconomic’, and that the
amalgamation of some of the smaller Native Authorities should be en-
couraged where possible.57 In Kenya, too, a number of original LNCs
were amalgamated or had their boundaries changed so as to reach a
more optimal size.58 At times these adjustments involved reducing the
size of local authority areas deemed to be too large. This was because,
as Lord Hailey argued, ‘it is an essential feature of the native treasury
system that it should be sufficiently “local” to give proof to the ordin-
ary man that some of his tax-money is coming back to him in the form
of local services’.59
From the beginning this experiment in local authority finance appeared
to have been a success, at least in some areas. As Lonsdale observes, ‘Afri-
can enthusiasm [for LNCs in Kenya] can best be measured in terms of
hard cash: by 1929 the Local Native Councils of North and Central Nyanza
had each voted about £10,000 for the establishment of government schools
in their districts’, with money raised by a voluntary assessment in addition
to local rates.60 Aggregate budget data from Kenya’s LNCs from 1925 to
1938 tell a similar story, increasing rapidly from the establishment of the
53
Pim and Milligan, Report on Northern Rhodesia, p. 183. Kenya was unique in not of-
fering a rebate of hut and poll tax to local authorities. See Lord Hailey, African Survey, p.
447; Hinden, Local Government, p. 128.
54
55
See Chapter 8 for more detail.
56
57
Northern Rhodesia, Report of the Financial Relationship Committee, pp. 37–8.
58
59
Lord Hailey, Native Administration, pp. 283–4.
60
Lonsdale, ‘Political Associations’, p. 611.
Table 7.1 Local Native Council revenue, 1925–38 (1913 prices)
Year Rates Rents, fees, etc. Other Total
1925 £0.00 £1,470.26 £172.32 £1,642.58
1926 £13,141.27 £5,255.96 £2,053.74 £20,450.97
1927 £10,875.63 £7,517.01 £1,529.28 £19,921.92
1928 £22,333.71 £8,312.92 £1,315.73 £31,962.36
1929 £23,225.08 £8,134.38 £3,227.32 £34,586.79
1930 £22,561.37 £10,569.26 £4,452.14 £37,582.77
1931 £23,053.66 £8,118.87 £5,002.31 £36,174.84
1932 £18,083.04 £6,187.43 £11,198.70 £35,469.16
1933 £21,091.35 £6,677.88 £5,953.13 £33,722.36
1934 £23,734.12 £10,337.09 £4,429.08 £38,500.30
1935 £21,978.34 £12,381.15 £7,229.51 £41,588.99
1936 £28,489.94 £8,943.07 £14,902.24 £52,335.25
1937 £29,084.73 £11,710.14 £18,071.91 £58,866.78
1938 £31,283.60 £5,901.26 £24,466.81 £61,651.67
Source: Kenya Colony, Annual Report on Native Affairs; Feinstein, Statistical Tables of National Accounts,
Table 61.
LNC treasuries up to the beginning of World War Two. Table 7.1 gives
the revenue of all LNCs by source, as well as the total revenue. Figure 7.1
provides an index which compares LNC revenue to that of the central
government over the same period, showing that LNC revenue increased
much faster over the period despite the hardships faced by Africans during
the Great Depression. Early LNC expenditures also show rapid growth
during this period. They also reveal different priorities to those of the
central administration in the same period. Table 7.2 shows the allocation
of expenditure by all LNCs from 1925 to 1938. Comparing these data to
the expenditure of the central administration during the same period re-
veals that LNCs devoted a larger share of their expenditure towards the
provision of social services, particularly education.
As shown in the previous chapter, the central administration devoted 18
per cent of its total revenue to social services, including health and educa-
tion. In contrast, Kenya’s LNCs spent just under 45 per cent of their total
expenditure on the same services. The same holds true in other years.
Unfortunately, it has not been possible to obtain comparable data on
the early years of Northern Rhodesia’s Native Treasuries, owing to more
limited data collection and record-keeping by the colonial administration
during World War Two.61
61
3.5
2.5
1.5
0.5
0
1925
1926
1927
1928
1933
1934
1935
1929
1930
1931
1932
1936
1937
1938
LNC Revenue Kenya Revenue
Fig. 7.1. Index of local and central government revenue, 1925–38

Source: Gardner, ‘Decentralization and Corruption’, p. 230.
However, anecdotal evidence suggests that their revenue perhaps increased

much more gradually than those of Kenya. The relatively low salaries of
chiefs still dominated the expenditure of many Native Treasuries. The local
rates which proved so successful in Kenya were generally not levied in North-
ern Rhodesia, largely due to the fact that because of the high proportion of
migrant labour working in the migrant areas, those who could afford to pay
extra rates in addition to taxation were often outside of local authority
jurisdictions.62
Colony-wide assessments of Native Treasury revenue also mask consider-
able variation in the resources available to individual treasuries. Tables 7.3
and 7.4 give the total revenue and expenditure of each local authority for
Northern Rhodesia and Kenya respectively. Just as the central administra-
tion had been more successful in raising revenue from African direct tax in
areas closer to markets or employment opportunities, local authorities in
such areas were much better able to raise public revenue than their counter-
parts in more remote areas. Larger revenue collections allowed some local
authorities to expand the services they offered to a greater degree, and by
the post-war period the budgets of wealthier local authorities were far more
62
Address by Sir Alan Pim (1938), in RHO MSS Afr.s. 1002.
Table 7.2. Local Native Council expenditure, 1925–38 (1913 prices)
Year Education Medical Agriculture and Roads and Water supplies Famine relief Other Total
forestry bridges
1925 £279 £0 £222 £138 £318 £0 £331 £1,288
1926 £2,047 £786 £2,018 £1,060 £322 £0 £3,317 £9,550
1927 £1,885 £1,546 £2,575 £2,078 £2,661 £456 £4,872 £16,073
1928 £1,576 £3,586 £2,854 £2,457 £1,765 £1,020 £5,875 £19,134
1929 £3,855 £2,815 £4,927 £2,448 £2,579 £1,289 £5,722 £23,635
1930 £4,137 £2,740 £3,675 £6,416 £2,753 £410 £6,320 £26,452
1931 £9,810 £3,990 £4,902 £5,488 £1,667 £1,483 £8,146 £35,486
1932 £10,453 £3,170 £5,466 £4,883 £1,473 £5,658 £12,975 £44,078
1933 £6,278 £2,749 £4,880 £4,653 £796 £1,230 £11,349 £31,935
1934 £13,488 £3,880 £7,059 £5,209 £536 £3,303 £12,700 £46,176
1935 £7,398 £4,089 £9,709 £5,732 £682 £4,797 £10,509 £42,917
1936 £7,945 £5,497 £10,163 £6,076 £910 £596 £15,645 £46,834
1937 £8,918 £8,441 £11,399 £6,118 £681 £476 £18,643 £54,675
1938 £9,882 £5,176 £9,620 £7,491 £1,052 £6 £23,237 £56,464
Source: See Table 7.1.
Table 7.3. Northern Rhodesia Native Treasury revenue and expenditure, 1938
Treasury Revenue Expenditure Treasury Revenue Expenditure
Plateau Tonga £1,234 £716 Swahili £159 £73
Gwembi Tonga £285 £317 Lamba £470 £316
Ila-Kaonde £346 £265 Kaonde £365 £357
Sala £225 £160 Ndembo £118 £126
Toka £339 £248 Lunda £178 £231
Ila-Kaonde £521 £368 Lima £178 £191
Bemba £1,303 £1,160 Ngoni £494 £386
Wisa £441 £438 Chewa £777 £635
Lungu £245 £237 Kunda £166 £206
Baushi £395 £335 Senga (Petauke) £528 £347
Ngumbo £155 £154 Ambo £119 £127
Bena-Mukulu £78 £92 Senga (Lundazi) £105 £180
Baunga £91 £134 Tumbuka £100 £89
Inamwanga £95 £115 Soli £247 £171
Tabwa £125 £145 Lenje £670 £477
Bwile £61 £67 Mburuma £204 £136
Mambwe £190 £171 Lala (Serenje) £320 £250
Lunda £362 £304 Lala (Mkushi) £214 £140
Chishinga £177 £200 Swaka £245 £136
Shila £51 £65 – – –
Source: Pim, Report on Northern Rhodesia, pp. 184–5. In current prices.
complex than those of poorer councils, which remained rudimentary. Since

the jurisdictions of both LNCs and Native Authorities varied widely in size,
it is difficult to assess the real inequality of local treasury resources by look-
ing at the nominal amounts of revenue collected by each treasury.
A better measure would be the revenue collected per capita in each local
authority jurisdiction. Unfortunately, corresponding population data are not
available for each local authority. Figures 7.2 and 7.3 use provincial-level
population estimates to show differences in the per capita local treasury rev-
enue by province. Both figures show wide variation in the revenue available
to local treasuries in different provinces. In Northern Rhodesia, local treasur-
ies in Western and Northern Provinces raised double the revenue per capita
that local authorities in the other three provinces managed.
In Kenya, the Masai District appears to be an outlier in this series,
largely due to its much smaller population.63 Among the other provinces,
63
Population data in the colonies are notoriously unreliable. These figures should there-
fore be taken as estimates only.
Table 7.4. Kenya Local Native Council revenue, 1945
Province & district Revenue Expenditure Province & district Revenue Expenditure
Nyanza Province Rift Valley Province
N. Kavirondo £50,062 £37,396 Nandi £5,237 £4,275
C. Kavirondo £33,184 £26,168 Elgeyo £10,067 £6,714
S. Kavirondo £40,118 £30,316 Baringo £5,922 £3,864
Kipsigis £15,188 £7,765 Samburu £3,314 £1,782
Central Province West Suk £1,390 £1,455
Kiambu £26,929 £24,977 Coast Province
Fort Hall £21,751 £19,456 Digo £5,865 £4,901
South Nyeri £16,820 £15,354 Giriama £11,158 £8,213
Embu £19,619 £12,258 Teita £3,977 £4,733
Meru £15,723 £10,252 Tana River £867 £675
Machakos £22,606 £17,598 Freretown £33 £33
Kitui £14,630 £9,566 N. Frontier District
Masai District Isiolo £578 £295
Narok £12,269 £4,966 Garissa £199 £268
Kajiado £12,407 £3,679 Marsabit £258 £3
Source: Kenya Colony, Report on Native Affairs 1939–45. In current prices.
£0.05
£0.04
£0.04
£0.03
£0.03
£0.02
£0.02
£0.01
£0.01
£0.00
Southern Northern Western Eastern Central
Fig. 7.2. Northern Rhodesia: per capita native authority revenue by province,
1938
Source: Pim, Report on Northern Rhodesia, pp. 184–5, 364–5. In current prices.
£0.60
£0.50
£0.40
£0.30
£0.20
£0.10
£0.00
Nyanza Central Rift Valley Coast Masai N. Frontier
Fig. 7.3. Kenya: per capita Local Native Council revenue by province, 1945
Source: Kenya, Report on Native Affairs 1939–45. In current prices.
the revenue per capita collected by African District Councils (as LNCs
were known after World War Two) in Nyanza Province was nearly double
that of the Rift Valley and Coast Provinces. Though this measure no
doubt masks considerable inequality between local treasuries within the
same province, it provides a rough indication of the different financial
circumstances in which local treasuries in different areas found
themselves.
There was also wide variation in the financial competence of local
treasuries. In both territories, local treasuries were considered separate
from the general treasury of the central administration, and therefore
did not come under the supervision of the colonial auditor.64 When
auditors inspected the records of revenue collected on behalf of the
central administration (e.g. dog licences in Northern Rhodesia), they
often complained of discrepancies. In 1938 the Acting Auditor of
Northern Rhodesia complained that ‘these Native Collectors are ap-
parently quite incapable of understanding the use of duplicate and
triplicate receipt forms’, resulting in lost receipts and incorrect
records.65 He further complained that ‘the money collected for the
Native Authorities and paid into the Boma is not public revenue [be-
cause it was then repaid into Native Treasuries], but both this Depart-
ment and that of the Accountant-General spend many hours
endeavouring to unravel these accounts’. He suggested that Native
Treasuries should be made responsible for collecting their own rev-
enue, which would eliminate the rather inefficient diversion to the
central government treasury of local authority revenue, but do little to
resolve the accounting problems of local treasuries. As late as 1951 a
Northern Rhodesia administrator complained that progress in increas-
ing the administrative capacity of local governments was slow, and
that ‘almost invariably the district officers had, and still have, to frame
the estimates themselves after discussing them item by item with the
native authorities’.66
This was as much a problem for wealthier as for poorer local author-
ities. A memorandum by Kenya’s local government inspector argued that
on the basis of inspections of the Nyanza local authority budgets in 1953,
‘I have come to the conclusion that the time is long overdue for the ap-
pointment of a properly qualified financial officer to several of the larger
African District Councils.’67 The issue was particularly urgent in North
Nyanza, the largest and wealthiest of Kenya’s local authorities with rev-
enue for 1953 estimated to be £474,124. The inspector observed that ‘no
municipality in the colony has a turnover of this magnitude with the ex-
ception of Nairobi, while the aggregate turnover of all the District Coun-
cils and County Councils together is less than for this single African
District Council’. He complained that the present arrangements left
64
Northern Rhodesia, Native Treasuries, p. 4. For banking arrangements see Acting
Chief Secretary to Provincial Commissioner, Kasama, 12 June 1937, in NAZ SEC1/729.
65
Acting Auditor to Acting Chief Secretary, 16 June 1938, in NAZ SEC1/729.
66
67
Altorfer, ‘North Nyanza African District Council: Employment of Treasurer’, in
KNA AD/48/16. The author was one of two officials whom Hicks credits with the later
development of Kenyan local government policy. See Hicks, Development from Below, p.
213.
much of the administrative work to officers of the central administration,

which he argued was satisfactory in the case of councils with budgets of
£50,000 or less. The North Nyanza council had appointed a person de-
scribed as ‘Treasurer’ but ‘the work which could be performed by an un-
qualified African at this stage of development does not even approach the
duties of the post as they ought to be carried out’. As a result, he noted,
the audit reports for the North Nyanza council for the previous years re-
vealed ‘all kinds of errors, mistakes, omissions, defalcation, and similar
matters, many of which would be the subject of a serious enquiry, disal-
lowance, and possibly surcharge in any other type of local authority’.
Furthermore, local authorities often had difficulties in anticipating how
much revenue they could collect within their jurisdictions. When the ADC
of Baringo District in Kenya was granted control over the Lembus Forest, it
planned a range of development projects based on a Forest Department esti-
mate that the Forest would generate around £20,000 in revenue each year.
These included irrigation and resettlement schemes. As Anderson notes, this
estimate was made when the Forest Department was attempting to argue that
granting control over the Forest to the ADC would prove a great loss to cen-
tral government revenue. After the ADC took control over the Forest, the
revenue generated proved to be a tenth of that estimate, leaving the Baringo
ADC with no funds with which to implement the projects it had planned.68
‘ C A S H , C O M P E T E N C E , A N D C O N S E N T ’:
D E L E G AT I N G R E S P O N S I B I L I T Y, 1 9 4 5  5 3
Despite these problems, the establishment of local treasuries provided at

least some local authorities with a secure financial base during the inter-
war period. During World War Two, few changes were made to local
government policy or the financial structure of local administrations.
A general typology for local government revenue was provided in 1947 by
the Cambridge Summer School on African local government, which de-
scribed Native Treasury revenue as divided as follows:
Four types of local government revenue are distinguished: direct taxation,
whether assessed by the central government as direct tax or levied by the
local government under rating powers; revenue derived from the perform-
ance by local government bodies of services within their own areas and from
rents from their own properties; grants-in-aid paid by the central government,
68
For more detail on this case, see Anderson, Eroding the Commons, pp. 265–6.
and grants by the central government in reimbursement for services per-
formed by the local government bodies on an agency basis.69
There were a few minor changes to the sources of revenue available to Native
Treasuries in Kenya and Northern Rhodesia. In Kenya, the most significant
change was the introduction of the Agricultural Betterment Funds, which
were created by a cess on each bag of maize or other produce sold to the
Maize and Produce Control from 1942. The funds were credited to the
account of the LNC of the district in which the produce was marketed.
Predictably, the bulk of revenue from this source went to areas which mar-
keted large quantities of maize and produce through the Control. The
Nyanza LNCs, for example, had received £50,000 from the Betterment
Fund by the end of the war in 1945.70 In Northern Rhodesia, the allocation
of poll tax granted to Native Authorities was increased from 10 per cent of
the total tax collected to 1s 6d per tax and then to 2s per tax in 1941. The
central treasury made an additional grant of £25,000 in 1944 and then
again in 1945. The following year an additional grant of 1s 6d per tax re-
placed the £25,000 annual allocation.71
While as noted above there was considerable variation in the financial
position of local authorities throughout both territories, at least some
local councils had become relatively well-off in the years since the estab-
lishment of their treasuries. During the war the Local Native Councils of
Central Province in Kenya collectively had sufficient reserve funds to pur-
chase two Spitfires for the Royal Air Force, and the Nyanza Local Native
Councils contributed to the purchase of mobile surgical units and ambu-
lances. Other LNCs also made contributions to the war effort.72 Some of
the more affluent Northern Rhodesian Native Authorities also expanded
their spending. The Plateau Tonga treasury, for example, spent £1,028 in
1943 on the maintenance of wells, new school buildings, a courthouse,
roads, dams, and other projects.73
A solid financial foundation was a prerequisite for the policies which
colonial administrations adopted towards African local government
after the end of the war. Both the Colonial Office as well as officials in
the central administrations of the colonies themselves saw the African
69
‘Summary of conclusions on Local Government in Africa Summer School, 1947’, in
NAZ SEC1/670.
70
Kitching, Class and Economic Change, p. 194. For more detail on the Agricultural
Betterment Fund, see Memorandum entitled ‘African District Council and Central Gov-
ernment Finance’, in KNA AD/48/16.
71
72
Kenya, Report on Native Affairs 1939–1945, pp. 3–4.
73
Hinden, Local Government, pp. 178–9.
administrations they had established during the 1930s as central to the

more ambitious development policies they hoped to initiate in the post-war
period, and the transition of the colonies in Africa towards self-government.
In 1947, a committee appointed by Sir Arthur Creech Jones to examine
new approaches to the colonies in Africa recommended that democratiza-
tion in local administrations should be the first step in the establishment of
responsible government, a process which they envisaged would take about
a generation.74 A despatch sent by the Secretary of State to the governors of
African territories in the same year noted that in putting into action the
new ten-year development programmes, ‘it is in the townships and villages,
among the people themselves, that much of this action must take place.
There are many development schemes where success, in whole or in part,
depends on the active co-operation of the people, and that co-operation can
best be secured through the leadership of local authorities.’75
As the Colonial Office saw it, part of bringing local authorities into the
implementation of development plans was the delegation of responsibil-
ity for some public services. Though local governments already provided
some services to their constituents, as noted above, the post-war policy
envisaged a dramatic transfer of service provision from the central admin-
istration to the local. As a Cambridge Summer School convened on the
subject of the development of local government concluded,
The process of developing local responsibility in Africa is one of assigning
authority from the central government to the local government. The conclu-
sion is reached that, while this process must never result in the abandon-
ment of ultimate control by the central government, which must retain final
responsibility for the welfare of the citizen, the responsibilities of local gov-
ernment bodies must expand with their capabilities until the central govern-
ment exercises little more control than general legislative, judicial and
directive control over local government activities.76
A memorandum on the aims of local government policy in Northern
Rhodesia expressed similar goals, arguing that the aim of the policy
was to ‘devolve executive and financial responsibility as far as possible
on to local government authorities and to ensure that those authorities
are representative of and responsible to the local communities’.77 In
74
For discussion, see Louis and Robinson, ‘The United States and the Liquidation of
British Empire in Tropical Africa’, pp. 42–3.
75
Despatch from the Secretary of State for the Colonies to the Governors of the African
Territories, 25 February 1947, in NAZ SEC1/670.
76
‘Summary of conclusions on Local Government in Africa Summer School, 1947’, in
NAZ SEC1/670.
77
Kenya, a committee on the relationship between local authorities and

the central government was appointed in 1941 on the accepted prin-
ciple that ‘it is the settled policy of Government to encourage the de-
velopment of Local Native Councils on lines which will permit of their
gradually taking over the normal activities of local government
authorities’.78
The principle by which responsibilities were to be assigned to local
authorities was defined as ‘cash, competence, and consent’. This prin-
ciple was proposed initially by Bernard Bourdillon, Governor of Nigeria,
in 1939.79 It dictated that before service responsibilities could be trans-
ferred to local authorities, they should have sufficient financial resources
to shoulder the burden. They should also have the administrative and
technical capacity to provide the service in question, and be willing to
do so.80
There were other reasons for delegating service responsibilities to
local authorities besides providing local authorities with an administra-
tive and civic education. One was that local authorities might be in a
better position to raise funds to provide for these services. According to
the 1949 Financial Relationship Committee in Northern Rhodesia,
‘the Native Authorities ought to be in a better position to know the
taxable capacity of their people and the kind of tax most suitable for
them than the Government’.81 It was for this reason, the Committee
argued, that any increase in the rate of direct taxation ought to come
from local authorities rather than from the central administration. This
was a similar argument to that which had motivated the colonial ad-
ministration to allow district officers to grant exemptions from direct
taxation in the early colonial period. However, it also implied that an
increase in taxation by local authorities would be more politically ac-
ceptable to taxpayers than additional taxation imposed by the colonial
administration.82
The delegation of responsibilities for service provision also deflected
the growing demands for social services away from the central admin-
istration. As the Hudson memorandum noted, ‘because in the past
78
‘African District Council and Central Government Finance’, in KNA AD/48/16.
79
80
For an example of this issue under consideration, see Horsley, Memorandum on Af-
rican District Council, 11 March 1953, in KNA AD/48/16.
81
82
Chipungu concurs with this claim, arguing that the success of Native Authority tax
collections was due to ‘the cooperation of the majority of rural Africans’, gained when local
residents could see the link between paying taxes and receiving improved services. Chipungu,
‘Accumulation from Within’, pp. 77–80.
local services have necessarily been provided mainly by the central gov-
ernment or by voluntary agencies, such as missions, Africans desiring
increase in such services have learnt to ask the central government to
provide them without thought of how they themselves can help in their
provision’. The policy of developing local authorities was to remedy
this, replacing ‘the paternal and bureaucratic methods of providing
social services by a method in which a series of representative local self-
governing and self-perpetuating bodies may both initiate and execute
such work themselves, but in partnership with the central government’.
Putting it another way, Hudson argued that by the late 1930s Africans
believed that ‘the central government had a bottomless purse and un-
limited powers. It could, if so desired, provide all these local services
for which the villagers were beginning to feel the need . . . The people
did not understand local government or local finance and it did not
occur to them that some of their communal wants could be met by
their own efforts.’83
The delegation of authority proceeded gradually in the late 1940s and
early 1950s. In Kenya, the central administration was initially reluctant to
delegate any additional executive power over the provision of public serv-
ices to African District Councils. As noted above, the Native Authority
Ordinance had not been specific as to how local authority revenue should
be spent, stating only that their funds ‘should be expended only for such
purposes as may be prescribed by any resolutions approved by the Gover-
nor in Council’. A report issued in 1937 recommended that ‘Local Native
Councils should have no independent executive authority’ and that they
should be ‘merely instruments of the government’. Any money voted
‘should be administered by the Government departments concerned’.84
These conclusions proved controversial and ultimately led to the
appointment of the 1941 committee cited above.85 But the committee
appointed in 1941 also recommended that no additional executive
responsibility be transferred to local authorities, arguing that councils
should be able to decide on the services they wanted and could pay
for, but were not yet in a position to provide them. This included
paying for the greater part of services provided to that area by the
medical, educational, agricultural, veterinary, and public works de-
partments.86 When the committee’s recommendations were applied in
83
84
85
For more detail on the committee’s appointment and conclusions, see Hinden, Local
Government, p. 129.
86
1943, difficulties arose immediately over the payment of departmental

staff and the fact that poorer council treasuries in particular could not
afford the financial burden imposed on them. Hinden notes that be-
tween 1937 and 1945 revenue almost doubled but expenditure had
nearly trebled.87 In 1944 J. F. G. Troughton, then the colony’s treas-
urer, toured the Nyanza and Rift Valley Provinces and reported on the
problems these regions faced, arguing that the separation of financial
and executive responsibility was impracticable, but there was no in-
stant reconciliation of the two views regarding local authority respon-
sibility for service provision.88 In the meantime, the ‘practical side’ of
the work of Local Native Councils in Kenya ‘suffered from the defect
that . . . there was no clear division of functions as between them and
the Government’.89
While it debated a resolution to the problem, the central administra-
tion provided interim grants to local authorities including a refund of the
total expenditure on roads and a refund of war bonuses paid to depart-
mental employees. These grants provided only limited relief to poorer
councils which had spent little on roads and bonuses in the first place.90
In 1947 a further grant of two shillings per ratepayer was granted, and a
new division of responsibilities between central and local administrations
was decided.91 By 1948– 49, African District Councils had become solely
responsible for ‘the construction and maintenance of dispensaries, mar-
kets, and cattle dips, the upkeep of minor roads, and all primary
education’.92
Amendments to the policy after 1947 delegated additional respon-
sibilities to African District Councils (e.g. agricultural and soil con-
servation services in 1948, and direct payment for drugs issued at
local dispensaries), while removing others such as primary education,
responsibility for which was assumed by District Education Boards, to
which ADCs contributed, following the recommendations of the
Beecher report.93 Councils also began to receive reimbursements for
87
88
‘African District Council and Central Government Finance’, in KNA AD/48/16;
Kenya, Report on Native Affairs 1939–1945, p. 16.
89
90
91
‘African District Council and Central Government Finance’, in KNA
AD/48/16.
92
93
agricultural services from the central administration.94 By 1950 the

African District Councils Ordinance formally recognized councils as
ranking with Municipalities and District Councils in the European
areas.95 By the early 1950s, the responsibilities of African District
Councils were much wider than those of other local government
authorities.96
In Northern Rhodesia, the policy changes of the 1940s were primar-
ily focused on putting Native Authorities on a sounder financial foot-
ing. In 1946 the Native Authority (Amendment) Ordinance allowed
Native Authorities to levy local rates. This legislation also reorganized
Native Treasuries to eliminate those too small to be financially viable
and granted Native Authorities the power to regulate and control trade
and industry.97 Even after this innovation, however, Native Authorities
were hampered by their limited revenue. The central administration
voted additional grants to help support local treasuries, particularly
those in poorer areas.98 One of these was in 1948, when £47,000 was
approved by the central administration for disbursement to Native
Treasuries in order to increase the pay and conditions of Native Author-
ity employees.99
Detailed supervision of the Native Treasuries was passed from Dis-
trict Commissioners to the Central Native Treasury Board, a body es-
tablished to review annually the state of Native Authority finance and
advise on grants and other steps which the central administration
should take to improve that status.100 Treasuries which found them-
selves in financial difficulty could apply to the board for special assist-
ance.101 Grants approved by the Board tended to be for small amounts
of money for specific projects. In 1949, these included grants to cover
half the cost of a building programme for housing Native Authority
employees in Nsenga, the construction of an orphanage in Lunda, and
improvements to roads and other communications infrastructure. The
94
‘Extract from Record of a meeting in the Chief Native Commissioner’s Office re-
garding the Division of Services as Between the Central Government and the Local Native
Councils and the Financing of Such Services’, in KNA AD/48/16.
95
96
Minutes of first meeting of the Committee on African District Council Finance, 13
May 1953, in KNA AD/48/16.
97
98
Lord Hailey, African Survey, pp. 487–8.
99
Northern Rhodesia, Minutes of a Meeting of the Central Native Treasury Board, 21
February 1949.
100
101
Northern Rhodesia, Minutes of a Meeting of the Central Native Treasury Board, 3 April
1948.
Committee also approved a grant for the construction of a school for

employees of African local governments.102 In 1950 the Committee re-
duced the level of reserves which it had previously required Native Treas-
uries to build from the equivalent of two years’ expenditure to eighteen
months’ expenditure in order to encourage the expansion of local govern-
ment programmes.103 Policy towards Barotseland was also amended in
this period so as to give the local authority greater control over its own
funds and functions. The poll tax rebate which had always been re-
ceived by the Barotse chief was increased to 50 per cent of the tax col-
lected in 1941 and to 75 per cent in 1946. Barotse Native Authorities
were also granted powers to control and promote industry similar to
those granted to Native Authorities outside Barotseland.104
C O N S E Q U E N C E S O F D E L E G AT I O N F O R
DEVELOPMENT
The paucity of data on local treasury budgets makes it difficult to assess

the impact of more autonomous local and urban institutions on develop-
ment in the colonies.105 There seems little doubt that at least some local
authorities contributed significantly to development initiatives in their
jurisdictions through the provision of local infrastructure, economic or
social services. In his presentation to the Rhodes-Livingstone conference
on local government in 1959, Billing emphasized the achievements of
Native Authorities, arguing that
Native Authorities, whatever their shortcomings, are forging ahead in no
uncertain fashion. A Senior Chief in the Eastern Province occupies a study
on the first floor of a block of Native Authority offices; he is a member of the
African Provincial Council, the lands of his country are ridged and in some
cases have gone further into the realm of rotation of crops; he is a most ef-
ficient collector of revenue from his people and co-operates with the Game
102
February 1949.
103
December 1950. To put this in context, the central administration aspired to accumulating
a reserve of around 75 per cent of a year’s revenue. See Northern Rhodesia Treasury, Memo-
randum on Financial Policy, 10 May 1935, in NAZ RC/1250.
104
105
For details on the difficulty of quantitative analysis of local government spending, see
Department over a first-class controlled area which brings in the Chewa
Treasury a sum of £800 per annum.106
In Kenya, the economic services provided by local authorities included
construction of maize mills, small-scale dairies, drying bandas (sheds) for
hides and skins, the opening of demonstration plots and seed farms for
the improvement of agriculture, the hiring of European and African agri-
cultural and veterinary extension personnel, and the provision of loans to
prospective African businessmen.107 The North Nyanza Council alone
contributed £17,697, or nearly 30 per cent of its total expenditure, to the
District Education Board in 1947.108
An additional benefit was that local authorities could be a major
source of wage and salary employment within African areas.109 In 1947
the North Nyanza Council spent a total of £26,495 on salaries and
wages for its staff, ranging from the salaries of elders to the payment of
medical staff, drivers, artisans, and soil conservation staff, among others
of a range of skill levels. This represented 44 per cent of its total ex-
penditure.110 It is unknown how many people the Council employed, or
how competitive the rates of pay were, but the level of expenditure on
staff suggests that the Council did generate a non-trivial amount of
employment within its local area. This was no doubt less true in poorer
areas and in Northern Rhodesia, where Native Authority salaries were
notoriously low.111
Despite the positive performance of some local authorities, financial
constraints limited the overall expansion of local services. In Kenya, the
grant of two shillings per taxpayer along with reimbursement for agri-
cultural services remained the sole grant from the central administra-
tion into the late 1950s. According to Hicks, this limited financial
provision combined with the limitations in local authorities’ abilities to
raise revenue reduced the effectiveness of local authorities in develop-
ment initiatives.112 The limited jurisdictions of local authorities also
hindered their progress. Waller notes that LNCs in the Maasai areas
‘were willing to vote funds for water development and even raised pri-
vate loans, but wished also to utilise areas across the borders of the Re-
serve as draught grazing and were prepared, if necessary, to pay for this
106
Billing, ‘Northern Rhodesia’, pp. 7–8.
107
108
Calculated from ‘North Nyanza Local Native Council Budget’, pp. 311–17.
109
110
Calculated from ‘North Nyanza Local Native Council Budget’, pp. 311–17.
111
Chipungu, ‘Accumulation from Within’, p. 81.
112
facility’.113 They were denied permission to do this, however, rendering

their programme less effective.
In addition to these difficulties, inequalities in the resources available
to individual treasuries remained. This meant that both expenditure and
rates of pay for employees often differed between different areas.114
A report on African affairs during the war in Kenya noted that ‘a distress-
ing feature, accentuated during the war, is the lack of uniformity in the
rate of progress between the semi-sophisticated and the backward tribes
in the Colony. The inhabitants of Nyanza and the Kikuyu areas of Central
Province might be living in a different world and era from the Masai and
Elgeyo for example.’115
Further, it seems likely that the increased revenue and responsibilities
of local authorities created or worsened problems of corruption and rent-
seeking which also emerged in other areas of colonial governance where
authority was delegated to largely unsupervised local officials. Kitching
argues that ‘LNCs were an arena of struggle among different groups
within the African petite bourgeoisie, as well as a source of some power
and resources which they could use or attempt to use against Indians and
(occasionally) against other Africans.’ Increasing the resources available to
local councils ‘simply made them slightly larger “honey pots”’, and ‘made
their capture of even more significance for the stratum as a whole and for
competing groups within it’.116 Chipungu argues convincingly that the
surprising ability of Native Authority employees in Northern Rhodesia to
invest in local industries despite their low salaries was due at least in part
to their ability to redirect local authority resources to their own projects,
either through loans (which were rarely repaid), advances, or outright
embezzlement.117
This phenomenon also has parallels in post-war municipal govern-
ments. For municipal councils in Kenya and Northern Rhodesia (as well
as the rest of the Empire), one the most pressing issues in coping with a
rapidly expanding urban population was the ability to raise loans from
sources other than the central administration.118 After several years of
113
Waller, ‘Uneconomic Growth: The Maasai Stock Economy 1914–1929’, p. 3.
114
Northern Rhodesia, Minutes 1950; Chipungu, ‘Accumulation from Within’,
p. 81.
115
116
117
Chipungu, ‘Accumulation from Within’, pp. 81–90.
118
For debates on this issue in Kenya and Northern Rhodesia, see correspondence and
documents in NAZ SEC1/1542. For elsewhere in the Empire, see requests to raise loans by
Gibraltar (TNA CO 926/5), Singapore (TNA CO 1022/307), and Georgetown, British
Guiana (TNA CO 111/744/20).
debate, Nairobi managed to raise loans of £1,000,000 on the London

market and £1,250,000 locally in 1954–55 in order to improve local serv-
ices.119 Once the money was received, however, accusations of the misap-
propriations of funds were rife, and the process was ultimately subject to
a government commission of inquiry.120
*****
The very unequal resources accessible to different local administrations
meant that the expansion of local government in British Africa had mixed
results in terms of the improvement of living standards in local areas. Very
little work has been done on local government finance in colonial Africa,
and additional research into the activities of councils and their budgets is
required before any more definite answer can be made to this question.
Finding an answer to this question should be of particular interest to
economic historians of Africa, as efforts to reform local government insti-
tutions were not limited to the two colonies profiled in this chapter.
A growing middle class, expanding participation in the labour market, and
urbanization all presented challenges to the system of indirect rule adopted
in the early years of colonial rule. By the late 1930s the question of how to
help local authorities adapt to these new challenges was concentrating
minds in both London and colonial capitals.121 Lessons were shared be-
tween colonies and then adapted for local purposes. One example is rev-
enue collection: Hailey notes that by the late 1930s there was considerable
variety in the methods by which local authorities in African colonies raised
revenue. Local authorities in Nigeria, Tanganyika, Northern Rhodesia,
and Nyasaland relied on percentage shares of direct tax revenue which had
previously gone to the central administration. In other colonies like
Uganda, Sierra Leone, and Kenya, local authorities imposed their own
taxes. In the Gold Coast, local authorities were permitted to impose direct
taxes, but only those in the Northern Territories did so.122 Further investi-
gation of the origins and effects of these variations would yield new in-
sights into an area of colonial governance which is often ignored but played
a central role in determining the shape and pace of local economic and
political development in Africa from the inter-war period onwards.
Whatever its success as a development initiative, the institutional
consequences of fiscal decentralization in the colonial period were long-
119
For debates about the Nairobi loan, see correspondence in TNA CO 533/547/1. For
details on the loans, see Colonial Office, The Colonial Territories, 1954–55, pp. 53–4.
120
Kenya Colony, Report of the Commission of Inquiry into Alleged Corruption or other
Malpractices in Relation to the Affairs of the Nairobi City Council.
121
Hailey, Native Administration, pp. 12–13.
122
Ibid., p. 46.
lasting. The policy of encouraging local government involvement in de-

velopment spending persisted even beyond independence, finding
expression in the Harambee movement in Kenya and the idealization of
traditional African society in Zambian humanism.123 Decades after inde-
pendence, decentralization has remained central to development efforts
in many African countries.124
123
Cowen and Shenton, Doctrines of Development, pp. 311–16; Republic of Kenya,
Development Plan 1974–1978, pp. 40–1; Van der Merwe, ‘Humanism in Zambia’, p. 87.
124
Gardner, ‘Decentralization and Corruption’.
8
Fiscal Policy and Regional Integration,
1945–1963
The post-war period saw a shift in British policy in the tropical Empire,
which Louis and Robinson call the transition from ‘empire-building’ to
‘nation-building’.1 The reform of local governments was one part of this
effort. Another focused on the colonial boundaries drawn up during the
Berlin conference. Just as colonial officials had debated the optimal size of
local government jurisdictions, they also discussed the ideal size of the
colonies themselves for the purposes of self-rule. During a meeting of a
Colonial Office committee on post-war reconstruction in the colonies,
Lord Hailey argued that if colonies were to work towards self-government
they would need to federate like the Dominions had. The colonies were,
in general, ‘far too small for anyone seriously to contemplate each of them
becoming a separate self-contained and sovereign unit in the British
Commonwealth on an equal footing with the existing Dominions’.2
Regional integration was no new idea in British colonial governance.
The Dominions provided a key example of political federation and eco-
nomic success. In the dependent empire, neighbouring colonies had often
cooperated in the provision of some government services in order to take
advantage of economies of scale in the administration of public services.
In 1922, Lord Lugard recommended that such cooperation be increased.
‘There are in British tropical Africa several blocks of territory under separ-
ate administrations which are contiguous to each other, and the question
arises whether it would be more advantageous that they should be placed
under a single directing authority, with a single fiscal system, a common
railway policy, and identical laws.’ He argued that ‘amalgamation (that is,
unification) and federation are both natural processes of evolution, as we
have seen in the United States, in Canada, Australia, and South Africa,
and more recently in Nigeria’.3
1
Louis and Robinson, ‘The United States and the Liquidation of the British Empire in
Tropical Africa’, p. 50.
2
Minutes of Third Meeting, 1 May 1941, in TNA CO 967/13/41.
3
Lugard, Dual Mandate, pp. 97–8.
Fiscal Policy and Regional Integration 193
Despite this long history, federation schemes in East and Central Africa
initially faced considerable opposition in London, where they were often
seen as serving settler interests. However, as demands for greater financial
autonomy in the colonies grew more insistent, there was growing support
for the idea that some colonies would have to be amalgamated with others
in order to cope with the challenges of greater financial responsibility. The
prospect of independence provided additional incentive, and gave new
life to long-standing campaigns for closer union in Africa and the Carib-
bean.4 These new efforts to encourage regional integration resulted in the
creation of the Central African Federation (CAF—comprised of North-
ern Rhodesia, Southern Rhodesia, and Nyasaland) in 1953, and the Carib-
bean Federation in 1958. In East Africa, there was a significant increase in
regional integration through the East African High Commission.
Proponents argued that regional integration would make smaller col-
onies in particular more fiscally stable, and allow the resources of wealth-
ier colonies to support poorer ones. Nyasaland was a key example.5
However, there were also many sceptics, who claimed that federation
would at best result in minimal fiscal savings and limited economic gain.
Further, regional integration inevitably involves the sacrifice of some inter-
ests in favour of others, and the economic nationalism which had emerged
in individual colonies made cooperation between colonies difficult. Closer
union campaigns in Africa in particular were seen as serving the interests
of European settlers in Kenya and Southern Rhodesia. As a result of such
doubts, federation proved a slow and hesitant process, and the new federa-
tions of the British Empire were very soon tested by the challenges of de-
colonization. In the end, political opposition to federation doomed such
schemes before their fiscal merits could be fully assessed.
FINANCIAL POSITION, 194560
The financial resources of African colonies increased dramatically during

and after World War Two. War-time demand for their exports had re-
sulted in increased revenue collections by the war’s end. Even during these
more affluent years, financial constraints continued to influence policy.
Expenditure commitments had increased along with revenue collections
as ten-year development plans were put in place from 1947. A growing
administrative establishment, described by Low and Lonsdale as a ‘second
4
For more on inter-war campaigns for closer union, see Gann, History of Northern
Rhodesia, ch. 8; Johnson, ‘British Caribbean’, pp. 618–21, and Joint Committee on Closer
Union, Report.
5
Murphy, ‘Introduction’, p. l.
colonial occupation’, committed colonial treasuries to recurrent expendi-

ture on salaries and pensions.6 Such expenditure could not easily be
reduced in times of crisis. Colonies remained vulnerable to the same types
of shocks which had plagued them during the inter-war period. Changes
in the international export price for key commodities could still have a
profound effect on public revenue. At the same time, growing political
unrest related to nationalist movements threatened to undermine colonial
budgets by requiring the mobilization of expensive police and military
forces.
Kenya provides a good example. The colony’s economy expanded and
diversified during World War Two, significantly improving the colonial
government’s financial position. As in other African colonies, production
had been encouraged to fill war-time demands after the Japanese con-
quest of South East Asia.7 Secondary industry grew particularly quickly in
Kenya, due in large part to its dominant position in East Africa.8 There
were optimistic expectations about the country’s economic prospects,
which allowed the colonial government to implement increasingly ambi-
tious and expensive plans for development.9
Table 8.1 compares the revenue collected from various sources in 1939
with revenue in 1946 and 1956. The most dramatic increases came from
revenue from excise and income taxes. Excise revenue increased nearly
ten-fold in real terms from 1939 to 1946, reflecting both changes in tax
policy during the war and the rapid expansion of manufacturing in Kenya,
which rose from 2 per cent of total revenue in 1939 to 9 per cent in 1946.
European direct taxation, composed of poll and income taxes, increased
from 7 per cent of the total to 16 per cent in 1946 and then to 22 per cent
of the total in 1955/56 following the introduction of the income tax.
Revenue from the direct taxes paid by Africans (hut and poll taxes)
decreased in both absolute terms and as a percentage of total government
revenue. This was due in large part to the transfer of responsibilities for
tax collection and public service provision from the central government
to local governments (urban and rural).10
After the experiences of the inter-war period, administrators under-
stood that public revenue could diminish rapidly if economic conditions
changed. They had therefore used surpluses during and after the war to
build a substantial reserve to insure against exogenous shocks. But in the
6
Low and Lonsdale, ‘Towards a New Order’, p. 12.
7
Anderson and Throup, ‘Africans and Agricultural Production in Colonial Kenya’,
p. 335; Throup, Economic & Social Origins of Mau Mau, p. 2.
8
9
10
For more detail on the transfer of responsibilities to local governments, see Chapter 7.
Table 8.1. Sources of public revenue in Kenya (1939 prices)
Revenue sources 1939 1946 1955/56*
£ % £ % £ %
Customs 870,993 33 1,571,891 33 5,079,855 31
Excise 47,266 2 421,879 9
African Direct Tax 523,588 20 309,440 7 414,242 3
European Direct Tax 188,892 7 730,036 16 3,570,470 22
Government 458,251 17 632,064 13 1,349,551 8
departments and
property
Interest 43,152 2 264,009 6 189,718 1
Transfers from British 40,068 2 125,136 3 4,707,064 29
government
Other 462,103 18 641,401 14 901,857 6
Total 2,634,313 4,695,856 16,212,757
* Due to changes in the accounting procedure used by the colonial administration, figures for 1955/56
may not be precisely comparable with those from earlier years.
Source: Gardner, ‘Unstable Foundation’, p. 57. Calculated from Kenya, Report of the Taxation Enquiry
Committee, p. 66 and Kenya, Appropriations and Exchequer Accounts 1956. Deflated using ‘Nairobi Cost-
of-Living Index’, in KNA ad/27/19 and Colonial Office, Report on Kenya for the year 1956, p. 14.
years following the publication of the Development Committee’s 1946

report, revenue collection and the colony’s ability to borrow both exceeded
the Committee’s expectations. This additional revenue allowed adminis-
trators to become more and more optimistic about Kenya’s economic
prospects, and ‘increasingly ambitious development programmes’ became
accepted as normal.11
Some administrators still urged caution in development planning. In
a speech opening the 1950 Budget session of the Kenya Legislative
Council, then-Governor Sir Philip Mitchell noted that the ‘budget has
reached proportions which must cause some anxiety’.12 At the same
time, however, the ambitions of the colonial government expanded to
the extent that recommendations published by the Planning Commit-
tee in 1951 exceeded available resources. The Committee stated at the
beginning of their report that ‘rather than present a plan which we knew
could not meet the minimum needs of the situation we have, whilst
eliminating projects which may be desirable but not essential’, they
would present ‘what we consider is a properly balanced and reasonably
11
12
Quoted in ‘Development of Kenya: Budget Problems’, The Times, 25 October
1950, p. 3.
£25,000
£20,000
Thousands
£15,000
£10,000
£5,000
£0
1945 1946 1947 1948 1949 1950 1951 1952 1953
Revenue Expenditure
Fig. 8.1. Northern Rhodesia revenue and expenditure, 1945–53 (1945 prices)
Source: Calculated from Rhodesia and Nyasaland Central Statistical Office, National Income and Social
Accounts 1945–53.
realistic programme for the necessary development of the country

during the next five years. This programme will, on present assessment,
result in a deficit.’13 The optimism of the Planning Committee reflected
Kenya’s financial strength.
Northern Rhodesia also experienced financial gains during the war,
though not to the same degree as Kenya. Figure 8.1 shows the accumula-
tion of significant surpluses from 1948 into the early 1950s. By this time
copper mining was the core industry of the Northern Rhodesian econ-
omy, and the economic fate of the colony as a whole reflected the fate of
the mines.14 Copper was an important strategic resource during war-time,
and like other strategic goods it was subject to imperial government con-
trols from 1939. The new British Ministry of Supply, established in 1939,
immediately took steps in that same year to restrict the export of non-
ferrous metals (including copper) and set maximum prices. These regula-
tions were designed to prevent Germany from stock-piling raw materials
and safeguard Britain’s supply at pre-war prices.15 The copper mines were
under instruction from the British government to produce at their
13
Kenya Colony, Report of the Planning Committee, p. 5.
14
Baldwin, Economic Development and Export Growth, pp. 35–6; Thompson and Wood-
ruff, Economic Development, p. 153.
15
For details on control arrangements, see Backman and Fishman, ‘British War-Time
Control of Copper, Lead, and Zinc’.
maximum capacity throughout the war until 1945.16 By 1943, Northern

Rhodesia was supplying nearly 68 per cent of Britain’s copper.17
While the guaranteed sale of their entire output was beneficial for the
mines, the fact that the maximum prices set in 1939 remained relatively
unchanged throughout the war meant the copper mines had little sur-
plus to invest in new machinery or in the maintenance of the mines
themselves.18 Any expansion had to be supported by external funds.
When the Nchanga mine was expanded, the British Ministry of Supply
advanced £750,000 and the US government gave the mine priority for
equipment.19 After 1945 production was restricted to 50 per cent as the
British government’s demand decreased. Many of the war-time controls
remained, but prices were allowed to return to ‘open-market’ levels
(based on US prices as the London Metal Exchange remained closed).
Although these continued to rise after the war, mining companies com-
plained that prices did not increase enough to generate the profit needed
to update the equipment and infrastructure worn down by war-time
production.20
The major change in the financial fortunes of the mines (and therefore
the Northern Rhodesia administration) came with the devaluation of
sterling in 1949. The devaluation of sterling by 44 per cent against the
dollar increased the sterling value of copper from Northern Rhodesia by
the same amount.21 Sir Ronald Prain, then chairman of Rhodes Selection
Trust (RST), one of the two main mining companies in Northern Rho-
desia, observed that ‘the consequences of this devaluation changed the
fortunes of the mining companies in a dramatic way. It laid the basis for
our subsequent prosperity and made up for the 20 or so lean years that
had followed the development of the first big mines and had shown very
little profit indeed.’22 The number of people employed by the copper
mines increased steadily, rising by a third between 1946 and 1953, when
the London Metal Exchange was re-opened.23
The colonial administration also experienced a second windfall with
the renegotiation of the BSA Company royalty agreement. The distribu-
tion of revenue from copper mining continued to be a controversial issue
in the colony, where it was felt that resources which were badly needed
locally were being siphoned off by the British Treasury. In 1945, Colonel
16
Prain, Reflections, pp. 82–3.
17
Berger, Labour, Race, and Colonial Rule, p. 54.
18
Backman and Fishman, ‘British War-Time Control’, pp. 216–18.
19
Berger, Labour, Race, and Colonial Rule, p. 54.
20
Prain, Reflections, p. 85.
21
Baldwin, Economic Development and Export Growth, p. 33.
22
Prain, Reflections, p. 88. See also Prain, Copper, p. 105.
23
Thompson and Woodruff, Economic Development in Rhodesia, p. 153.
Sir Stewart Gore Browne, a prominent member of the Northern Rho-

desia settler community, stated in a speech in the Legislative Council that
‘too small a proportion’ of mining profits ‘is being spent to promote social
and economic progress in Northern Rhodesia. I regard it as a fundamen-
tal principle that a rich industry in a poor country should be taxed exclu-
sively for the benefit of that country.’24
In 1946, the Colonial Secretary agreed in principle that it would be
in Northern Rhodesia’s public interest for the British government to
buy back the mineral rights granted to the BSA Company when it had
ceded administrative control in 1924. Colonial Office minutes on dis-
cussions with the Treasury in that year outlined the case for the UK
government buying back the mineral rights on behalf of the Northern
Rhodesia government. ‘The case for UK assistance towards the purchase
of these mineral rights is an entirely political one. It turns on the ques-
tion whether HMG should help to rescue Northern Rhodesia from a
position in which they have been placed by HMG’s past actions.’ The
Treasury remained unconvinced of this position. Britain’s weak finan-
cial position at the end of the war placed severe limits on the amounts
available for colonial spending. Treasury officials argued that since the
Northern Rhodesia government would benefit financially from buying
the BSA Company’s mineral rights, the purchase should be made with
funds raised in the colony. Officials in Northern Rhodesia refused to
agree to this proposal, both as a matter of principle and also because it
would add to already heavy public investment in the prosperity of the
copper industry.25
Negotiations continued until 1949, when the Secretary of State
announced a compromise in which the Company would retain its mineral
rights until 1986. Until then, it would pay 20 per cent of the net revenue
from its mineral rights to the Northern Rhodesia administration. In its
analysis of the deal, The Economist observed that while the company was
‘reaping a return for past enterprise’, accepting the new deal was probably
necessary to avoid even higher charges on its revenue. ‘The people of
Northern Rhodesia have not found it difficult to enlist sympathy for their
claim to participate more fully in the profits of the flourishing mining
industry.’26 This agreement fell short of the full transfer of rights that
Northern Rhodesia had hoped for, but it did provide a welcome boost in
revenue. The 1949 Financial Report recorded that ‘revenue reached a new
24
Extract from Hansard, 9 January 1945, in NAZ SEC1/694.
25
The positions of all sides are discussed in minutes by A. B. Cohen and S. Caine of the
Colonial Office on their conversation with Treasury officials, 7–8 May 1946, published in
Murphy, Central Africa, Vol. 1, p. 21.
26
The Economist, 13 August 1949, pp. 371–2.
high level of £10,583,863, an increase of £3,868,346, over the revenue for

1948’. This increase was ‘mainly due to increased receipts from the copper-
mining industry’.27
The colonial administration enjoyed a further increase in revenue when
the two major copper companies moved their headquarters from London
to Northern Rhodesia. While their headquarters were in London, the
companies had been liable for only part of the tax which would otherwise
have been levied on their profits in Northern Rhodesia (due to double
taxation regulations).28 This changed in the 1950s, when increasing rates
of British taxation along with the expansion of the mines led both com-
panies to believe they would be better off relocating. The Anglo-American
Group announced that it would move its headquarters from London to
Northern Rhodesia in December 1950.29 RST was somewhat slower, but
moved its headquarters to Lusaka in 1953.30 The combination of high
copper prices, the new arrangement with the BSA Company, and increased
tax payments by the mining companies resulted in dramatic gains in
public revenue. The colony’s expenditure also increased as its first devel-
opment plan was put into practice. However, the rate at which revenue
increased still allowed for a considerable surplus, which was put into a
reserve fund.
PERSISTENT VULNERABILITY
Despite rapidly increasing revenue after 1945, ‘events’, to borrow a con-

temporary phrase often attributed to Harold Macmillan, would show
that the optimism exhibited in colonial financial planning was somewhat
premature. The structure of colonial economies remained little changed
from the pre-war years, and therefore colonial fiscal systems suffered many
of the same vulnerabilities. Changing commodity prices could still under-
mine colonial self-sufficiency, particularly in colonies that depended to a
large extent on the prosperity of a single industry to increase revenue.
Equally, the rising unrest of the post-war period increased the risk of
another type of shock, namely the need to draw on expensive military
resources to restore order.
27
Northern Rhodesia, Financial Report 1949, pp. 3–4.
28
Double taxation relief limited the tax Northern Rhodesia could charge to half the rate
charged in the United Kingdom as long as the British rate was higher. Pim and Milligan,
Report on Northern Rhodesia, pp. 135–6.
29
30
Its stay in Lusaka was a brief two years; the company moved its headquarters again in
1955 after Salisbury had been named capital of the Federation. Prain, Reflections, p. 102.
In Kenya, though the expansion of secondary industry represented a

significant change, agriculture rather than industry continued to domin-
ate Kenya’s economy. Kenya’s principal exports (coffee, tea, and sisal)
became more rather than less dominant as a share of total exports of
domestic produce from 1947 to 1964.31 And, as McWilliam points out,
the economic expansion of the period was based on conditions that were
largely temporary, such as military spending and the commodity boom
generated by the Korean War.32 Kenya’s system of taxation was therefore
no less unstable in the post-war period than it had been before the war,
and struggled to maintain revenue increases amidst changing prices.
A 1945 report by the East African Industrial Council complained about
the tendency to change tax rates to respond to budget shortfalls. ‘It is not
suggested that the rates of import duty and of income tax can be stabil-
ized for all time, but every effort should be made to avoid alterations over
short periods and to deal with budgetary fluctuations from year to year by
a flexible policy in other directions.’33
The Kenya administration was limited in the extent to which it could
unilaterally change tax rates because of agreements it had made with Uganda
and Tanganyika regarding tax collection. The customs unions formed with
Uganda in 1917 and Tanganyika in 1927, for example, made changing
customs tariffs a matter for difficult negotiations between territories. This
was equally true for income tax rates after the establishment of the East
African High Commission (EAHC) in 1947, which was tasked with col-
lecting income tax in all three territories.34 These constraints persisted and
influenced the extent to which administrators believed they could count on
sufficient revenue support for the new development projects.
The end of the coffee boom in the 1970s shows that the potential for a
revenue shock owing to falling commodity prices remained very real in the
post-war period.35 However, it was an expenditure shock that would prove
Kenya’s greatest financial challenge during the late colonial period. The
Mau Mau rebellion which began in 1952 was the biggest threat to colonial
rule ever faced in Kenya, and the colonial administration mobilized sub-
stantial resources to crush it.36 Eventually, when colonial coffers ran dry, the
British government stepped in with substantial financial assistance.
31
32
McWilliam, ‘Managed Economy’, p. 255.
33
East African Industrial Council, ‘Report and Recommendations Regarding Industrial
Development’ (1945), in KNA ACW/1/439.
34
‘Discussion with Kenya Finance Member on Kenya Loan Programme’, notes on a
meeting held 22 April 1953, TNA CO 822/577.
35
See Bevan, Collier, and Gunning, ‘Fiscal Response to a Temporary Trade Shock’.
36
For an overview of the conflict and its origins, see Anderson, Histories of the Hanged,
ch. 1.
Though Mau Mau is the subject of a vast historical literature, the finan-
cial consequences of the conflict have not been investigated in detail. As a
result of the Emergency and its financial demands, the ten-year plan of
1946 was curtailed after just eight years. Implementation of the plan
became increasingly problematic as the cost of military and police services
for the campaign against Mau Mau increased, rapidly diminishing accu-
mulated reserves. Figure 8.2 shows the Kenya government’s spending on
the Emergency compared with ordinary and development expenditure
from 1951 to 1960.37 By 1955, contributions to the Emergency fund
were more than double the total expenditure on development.
The Kenya administration’s communications with the British govern-
ment emphasized the rapid deterioration of its financial position after the
Emergency was declared in October 1952. On a trip to London in 1953,
Vasey (Kenya’s finance minister) made repeated requests for financial aid
from Britain. The Colonial Office and Treasury emphasized that Kenya
would need to show financial need before such aid could be granted.
Vasey argued that such financial need (characterized by the depletion of
Kenya’s reserve) would be apparent by the following year if Emergency
expenditure could not be reduced.38 In 1951, revenue had exceeded ex-
penditure by £773,140, a figure that grew to £1,730,111 by the end of
1952 and left a reserve balance of £8,961,773. By 1953, however, Kenya
faced a deficit of £1,352,585, or just over 15 per cent of its reserve.39
This was less than the £3,000,000 depletion in the reserve that Vasey had
anticipated in his discussions with the Colonial Office (which may have been
exaggerated to convince London that Kenya needed financial assistance), but
it was nonetheless significant, particularly since the administration had ini-
tially planned to devote £3,000,000 of the surplus balance to development.
This, Vasey noted, had become impossible due to the Emergency.40
Though the major problem was the need for rapidly increasing expendi-
ture, the colonial administration also feared that the Emergency would result
in loss of revenue. The accounts for 1953 showed declines in revenue in addi-
tion to increased expenditure, which amplified the administration’s anxiety
37
Originally published in Gardner, ‘Unstable Foundation’. Data on Emergency expendi-
ture are those given in colonial annual reports as allocations to the Emergency fund. These
figures are likely to underestimate total expenditure on the Emergency, as colonial officials
often found it difficult to distinguish between Emergency and ordinary expenditure. See
‘Report by the Director of Audit on the Accounts of the Colony and Protectorate of Kenya
for the Year ending on the 31st December, 1953’, in Kenya, Financial Report 1953, p. 8.
38
‘Note on Discussion with Mr Vasey, Finance Member, Kenya Government on 12th
June’, in TNA CO 822/577.
39
Kenya, Financial Reports, 1951–53.
40
‘Note on Discussion with Mr Vasey, Finance Member, Kenya Government on 12th
June’, in TNA CO 822/577.
£25,000,000
£20,000,000
£15,000,000
£10,000,000
£5,000,000
£0
1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962
Departmental Development Emergency
Fig. 8.2. Kenya public expenditure, 1951–62 (1950 prices)*

* No annual data are available for 1954 due to Kenya’s transition to a new fiscal year (from 1 January/
31 December to 1 July/30 June) prior to the introduction of the exchequer system of accounting in
1955. Data are only available for the half-year from 1 January to 31 June 1954, but due to uneven
rates of expenditure and revenue collection during different parts of the year, these figures cannot be
used to calculate comparable annual figures. For more detail on this transition, see Kenya, Introduc-
tion of the Exchequer System.
Source: Gardner, ‘Unstable Foundation’, p. 70. Calculated from Colonial Office, Annual Reports
1950–63.
regarding the Emergency’s long-term effects. In 1953 Vasey wrote to the Co-
lonial Office that customs revenue in the first five months of the year showed
a decline likely to result in a decrease of £750,000 by the end of the year.41
Vasey could not determine how much of this decline was due to the Emer-
gency (and noted that neighbouring Tanganyika was experiencing a decline
of about the same size). However, he argued that this decline in revenue might
mean that the deficit would be larger than he had predicted ‘unless it is com-
pensated for by work which we have not been able to carry out because of the
Emergency’.42 When asked by a reluctant Treasury official about the possibil-
ities for increasing revenue, Vasey noted that agreements with Uganda and
Tanganyika on customs and excise duties meant there was little prospect of
raising additional revenue from these sources. Therefore, increasing rates of
taxation was the only method by which additional revenue could be raised.
Raising rates too high, however, could discourage investment, which he was
reluctant to do since the Emergency was ‘already proving a deterrent’.43
41
The actual decline was £910,470 (in current prices).
42
E. A. Vasey to H. P. Hall, Colonial Office, 30 June 1953, in TNA CO 822/577.
43
‘Discussions with Kenya Finance Member’, 22 April 1953, in TNA CO 822/577.
Table 8.2. British government grants, 1954–60 (1950 prices)
Year UK transfers Total revenue % of total
1953 Nil £15,733,313 0
1954 (half-year) £1,514,286 £10,976,430 14
1954/55 £6,417,818 £25,209,881 25
1955/56 £7,028,674 £30,496,806 23
1956/57 £2,723,611 £22,328,816 12
1957/58 £2,042,708 £22,761,689 9
1958/59 £1,014,310 £22,631,326 4
1959/60 £1,074,521 £22,159,981 5
Source: Gardner, ‘Unstable Foundation’, p. 71. Calculated from Colonial Office, Annual Reports, 1954–61.
Financial assistance from Britain was not immediately forthcoming. The

British government made its first grant to assist with Emergency expenditure
in early 1954, over a year after the declaration of a state of emergency.44
Thereafter, however, British grants funded a large proportion of Emergency
fund expenditure. Table 8.2 shows the contribution of British grants to
Kenya’s budget from 1953 to 1960. Without this addition to its revenue,
Kenya could not have maintained its expenditure on development projects,
or even on the Emergency itself. Britain also contributed to the Swynnerton
plan (which was used to reward Mau Mau loyalists through the re-alloca-
tion of land) and maintained development projects with CDW funds.45 In
1955/56 the British government granted £1,343,612 for the Swynnerton
Plan, while revenue from CDW funds was £1,016,700.46
Even with this extensive support, which in 1955/56 constituted a quar-
ter of total government revenue, Emergency expenditure limited the
44
British troops had been involved in anti-Mau Mau campaigns from as early as
1952. However, it is likely that at least some of their costs were paid by the Kenyan
government. A 1953 memorandum by the British Treasury states that ‘United Kingdom
forces are being employed in Kenya on an extra-cost basis. This is the familiar pattern
when United Kingdom troops are employed in aid of the civil power. Broadly speaking,
it means that the local government is billed for the extra cost, over and above the ex-
penditure which the services would incur if the forces concerned were at a normal sta-
tion, arising from moving them to, and having them operating in Kenya.’ Later
correspondence suggests there was considerable confusion regarding the respective finan-
cial liabilities of both governments, and the final allocation of costs awaits systematic
study. See ‘Memorandum on Kenya’, 4 March 1953, in TNA T 225/771 and Tignor,
Capitalism and Nationalism, p. 335. For more detail on the functions of British troops in
Kenya, see Anderson, Histories of the Hanged.
45
Branch, Defeating Mau Mau, pp. 121–5; Tignor, Capitalism and Nationalism,
pp. 341–2.
46
Kenya, Appropriation and Exchequer Account 1955/56 (Nairobi, 1956).
resources which could be devoted to the ‘economic battle’ Vasey and

Baring intended to wage against the ongoing rebellion.47 Colonial admin-
istrators were particularly anxious about whether or not resources would
continue to be available. In June 1954 Frederick Crawford, then the
Acting Governor, told Secretary of State Oliver Lyttelton that estimating
the development funds Kenya would need in future years was ‘a task
fraught with considerable difficulty because neither the duration nor the
immediate—let alone the long term—effects of the Emergency can be
easily foreseen at this stage’.
The Emergency also affected the allocation of the remaining funds.
Crawford noted that, though the government hoped to gradually return
its emphasis to long-term investment designed to expand available
resource of materials and manpower, ‘the rate of expenditure on security
buildings will have to be maintained at a high level and that on social
welfare projects in particular restricted as a result’.48 This prediction
proved to be correct: in the 1954–57 development plan, security and
defence absorbed 8 per cent of the £35,537,751 in total expenditure, as
compared with just over 4 per cent of the total DARA expenditure of
£27,404,345 from 1946 to 1953. This was reduced significantly to 5 per
cent in the 1957–60 plan, though defence still received a higher propor-
tion of development spending than it had in 1946–53. In the proposed
1960–63 plan, 5 per cent of the total was proposed to be spent on de-
fence.49 Increased spending on defence, along with other recurrent ex-
penditure made necessary by the Emergency, influenced the allocation of
development funds for the rest of the colonial period.50
Later in June 1954, a meeting of Colonial Office and Treasury offi-
cials concluded that Kenya’s surplus balances would be completely spent
by April of the following year. Since Kenya was already receiving a
grant-in-aid from the British government, ‘any increases in taxation or
pruning of ordinary expenditure would not make funds available for
development but would be used to diminish the grant-in-aid’. In fact
tax revenues increased very little during the period from 1956 to 1963.
Kenya’s 1962 tax revenue of £18,695,740 represented an increase of just
47
Gardner, ‘Unstable Foundation’, pp. 65–6.
48
Acting Governor Crawford to Oliver Lyttelton, 10 June 1954, in TNA CO
822/1017.
49
Kenya Colony, ‘The Development Programme 1957/60’, Sessional Paper No. 77 of
1956/57 (Nairobi, 1957), p. 25; Kenya Colony, ‘The Development Programme 1960/63’,
Sessional Paper No. 4 of 1959/60 (Nairobi, 1960), p. 21.
50
Additional recurrent expenditure, including closer administration of Kikuyu areas,
was estimated to be £5 million per year. Colonial Development and Welfare Working
Party, ‘Minutes of the meeting held on 25 June 1954 to discuss development finance in
Kenya, 1955–60’, in TNA CO 822/1017.
£800,363 from 1956/57.51 After significant increases in the earlier post-

war years, direct taxation declined as a percentage of total revenue from
49 per cent in 1957/58 to 41 per cent in 1960/61.52
Kenya was therefore increasingly reliant on external loans and grants.
However, external loans also required local revenues to pay for debt ser-
vicing. In addition, Kenya’s previous borrowing was likely to make finding
external capital more difficult. East Africa as a whole had already received
a disproportionate amount of the money raised by all colonies and Do-
minions on the London market (£52,000,000 out of £157,000,000). As a
result, officials predicted in 1957 that Kenya was unlikely to be able to
borrow much more.53 The combination of these constraints in external
revenue meant that development expenditure in real terms, shown in
Figure 8.2, actually declined slightly in the early 1960s. Famines in 1961–
62 required further grants-in-aid from the British government (£2,398,187
in 1961/62 and £1,028,945 in 1962/63).54 Reports on both the 1957/60
and 1960/63 development plans noted that it was very unlikely that Kenya
would achieve any significant surplus to assist with development.55
In Northern Rhodesia, a declining copper price was the nemesis of the
colony’s development plans. Northern Rhodesia’s revenues had been in-
creasing along with the world copper price, which reached a record £437
per ton in March 1956. The boom was driven by post-war reconstruction
schemes, military requirements due to the Korean War, and government
stockpiling policies.56 However, this steady increase was not to last. As
Prain recounts in his autobiography, ‘as so often happens in the copper
business, this boom was followed by a recession of comparable magnitude;
in 1957 the price fell to £180 per ton and the following year it bottomed
at £160’.57 Like the copper price collapse in the 1930s, the 1957 fall had
an almost immediate and predictable effect on Northern Rhodesia’s budget,
which had been expanded for the purpose of implementing the colony’s
development plan. Figure 8.3 shows Northern Rhodesia’s revenue and
expenditure for 1954–63. The reserve fund which Northern Rhodesia
had built during the decade following 1945 was in large part what carried
it through this downturn. However, as subsequent sections of this chapter
will show, this was made increasingly difficult by Northern Rhodesia’s
51
In constant 1950 prices.
52
International Bank for Reconstruction and Development, The Economic Development
of Kenya (Baltimore, 1963), p. 276.
53
Kenya, ‘Development Programme 1957/60’, pp. 2–3.
54
Kenya, Appropriation and Exchequer Accounts 1961–62.
55
Kenya, ‘Development Programme 1957/60’, p. 21; Kenya, ‘Development Programme
1960/63’, p. 16.
56
57
Ibid., p. 115. For annual copper prices, see Banks, World Copper Market, pp. 12–13.
£18,000
£16,000
£14,000
£12,000
Thousands
£10,000
£8,000
£6,000
£4,000
£2,000
£0
1954 1955 1956 1957 1958 1959 1960 1961 1962 1963
Revenue Expenditure
Fig. 8.3. Northern Rhodesia revenue and expenditure, 1954–63 (1954 prices)
Source: Calculated using Central Statistical Office, National Accounts and Balance of Payments.
membership in the Central African Federation, in which two other terri-

tories also relied on revenue from Northern Rhodesian copper.
After the war, the financial position of colonial administrations
remained vulnerable to both changing global economic trends and local
political unrest. The Emergency in Kenya and the collapse of the copper
boom were in part the result of specific historical circumstances present at
that time. However, these events demonstrated that the fiscal position of
both colonies remained sufficiently fragile that the outbreak of local
unrest or a decline in the price of a major export could turn a large budget
surplus into a large deficit very quickly. The additional expenditure com-
mitments required by the implementation of development plans, and
particularly the expansion of the public sector, merely increased this vul-
nerability. The British government was aware of this, and began to seek
additional methods of making its tropical colonies fiscally stable.
D E S I G N I N G S E L F  S U F F I C I E N T S TAT E S : S C H E M E S
F O R F E D E R AT I O N A N D C L O S E R U N I O N
Closer union was proposed as one answer to the fiscal instability of the
colonies. Though not new, the idea became increasingly popular among
colonial officials in the post-war period. Federation seemed to offer officials
in London as well as in the colonies a number of potential benefits, both
fiscal and economic. Wheare’s Federal Government, published in 1946,
provided a list of factors leading to a desire for closer union which was
frequently cited by colonial officials: (1) the need for common defence
due to a feeling of military insecurity; (2) a desire to be independent of
foreign powers and a realization that only through union could independ-
ence be secured; (3) a hope of economic advantage from union; (4) some
political association of the communities concerned prior to their federal
union (e.g. as part of the same Empire); (5) geographical proximity; and
(6) similarity of political institutions.58 Birch adds two additional incen-
tives to this list: larger units may have greater influence in world affairs
(which was an argument in favour of federation in Nigeria and the West
Indies), and savings on the provision of public services (both in terms of
money and the allocation of skilled manpower). Birch further emphasizes
that the government of a federation would have a wider financial base,
allowing it to come to the assistance of particular areas affected by eco-
nomic, political, or ecological disasters.59
The advantages of closer union are still stressed by some economists
and development experts today. Paul Collier noted in 2007 that ‘for forty
years the politically correct solution to bottom-billion trade problems has
been regional integration’.60 Cooper similarly notes that a ‘solution for
Africa’s economic ills that has repeatedly been proposed is unification:
increasing the size of markets’.61 Like regional integration agreements
today, federation was intended to offer the perceived economic benefits of
larger markets for local products and the capacity for increased specializa-
tion and diversification which went with them.62
In addition, federation was intended to benefit the budgets of often
struggling colonies by allowing for the common provision of public serv-
ices, which economized on both administrative expenditure and scarce
skilled personnel. Faith in these dual benefits fuelled a new push for
increased regional integration in all regions of the tropical Empire, ulti-
mately culminating in the creations of federations in the Caribbean,
Asia, and Africa, including the Central African Federation (consisting
of Northern Rhodesia, Nyasaland, and Southern Rhodesia) in 1953.63
Attempts to create a federation in East Africa failed, but the integration of
the three territories (Kenya, Tanganyika, and Uganda) increased consider-
ably with the establishment of East Africa High Commission in 1947.
58
Wheare, Federal Government, p. 37.
59
Birch, ‘Opportunities and Problems of Federation’, pp. 14–15.
60
Collier, The Bottom Billion, p. 164.
61
Cooper, Africa since 1940, p. 103.
62
Winks, Failed Federations, pp. 12–13.
63
The Central African Federation was also called the Federation of Rhodesia and
Nyasaland. Hereinafter CAF or Federation.
Central African Federation

Like the Empire itself, the creation of the Federation had different signifi-
cance for different people, and it was the combination of these interests
that eventually led to its foundation. Pressure for closer union in Central
Africa had existed from the foundation of the colonies, but intensified
during and after World War Two. Support was strongest amongst the set-
tler population of the Rhodesias. In Northern Rhodesia, the campaign for
amalgamation with Southern Rhodesia was linked to the campaign for the
acquisition of mineral rights from the British South Africa Company.64
Settler proposals faced considerable opposition from both Africans and
some colonial officials who believed that the Federation would lead to the
extension of Southern Rhodesia’s harsh colour-bar policies to the rest of
the region.65 However, this opposition began to unravel as Britain became
increasingly anxious about the growing might of South Africa, where the
Afrikaner-dominated National Party had won the 1948 elections on an
apartheid platform.66 The Federation was in part intended to counter-
balance this influence, as well as prevent Southern Rhodesia from joining
its southern neighbour.67
Stakeholders in the three constituent territories also saw their own pur-
poses in the creation of the Federation. Members of the European com-
munity in the territories themselves emphasized the economic justifications
for closer integration. Sir Roy Welensky, a leader of the Northern Rho-
desian settler community and the pro-federation campaign, writes in his
memoirs that the closer union of the two Rhodesias was a necessity if
either were to survive the transfer of power. In 1948, he believed that time
‘was running out. Africa was being left behind in the rush of economic
expansion that was happening in the rest of the Western world.’ Of
Southern Rhodesia, Northern Rhodesia, and Nyasaland, he argued that
‘two at least of the three territories had a chance . . . of achieving greatness,
but together and not in isolation’. The two territories already shared some
common public services, including a single railway system, airline, and
currency, and had complementary resources (copper and coal).68
Other observers were suspicious that Welensky and his colleagues
were motivated as much by the potential to consolidate the political
64
Murphy, Central Africa, Vol. 1, p. liv.
65
Gifford, ‘Misconceived Dominion’, pp. 396–7.
66
Feinstein, Economic History of South Africa, p. 149. For more on Britain’s fears of
increasing South African influence, see TNA CAB 66/33. I thank David Meredith for
access to his notes on these files.
67
Chanock, Unconsummated Union, pp. 243–7; Gifford, ‘Misconceived Dominion’,
pp. 392–3
68
Welensky, 4000 Days, p. 21.
power of the European minority, at the expense of the African majority,

as they were by the economic potential of regional integration.69 Colin
Leys, for example, distinguishes between the two aims, arguing that ‘the
case against federation in Central Africa is not a case against the federal
principle of government for the three territories of Southern and North-
ern Rhodesia and Nyasaland, but against the political régime which has
been established by means of this particular constitutional device’.70
It was for this reason that the creation of the federation proceeded
slowly. The first move towards closer union came before the war’s end with
the establishment of the Central African Council in 1944. The Council
was to provide a venue for expanded discussion and cooperation between
the three territories, which went beyond the existing Governors’ Confer-
ence by allowing for the participation of ‘unofficials’, or members of the
settler community. This was, as the head of the Colonial Office’s Central
Africa Department put it, ‘intended as H.M. Government’s concrete alter-
native suggestion to amalgamation’.71 Among advocates of amalgamation
there were grumblings that ‘the British government had not only shelved
amalgamation but had fobbed off the Colony with a grand sounding
council which was never really meant to achieve anything’.72
The Council did not satisfy such critics, who argued that only political
amalgamation would bring the full benefits of closer union. A larger federal
unit, it was argued, would offer larger markets to local producers and lead to
greater diversification in the economy. This would not only lead to economic
growth, but it would also make the public finances of the member territories
less vulnerable to changing prices of key commodities. A larger economy might
also be more attractive to investors and creditors, increasing the resources avail-
able for development.73 The copper companies hoped that Federation might
lead to the improvement of the region’s infrastructure, particularly the erratic
power supplies which had hindered expansion after 1949.74
69
Hazlewood, ‘Economics of Federation’, p. 187.
70
Leys, The Case against Federation, p. 18.
71
Minute by A. B. Cohen, 28 February 1945, in Murphy, Central Africa, Vol. 1, p. 1.
72
Letter from Sir C. Tait, Governor of Northern Rhodesia, to Lord Addison, 13 August
1945, in Murphy, Central Africa, Vol. 1, p. 2.
73
Gann, Central Africa, p. 140.
74
Prain recounts that coal shortages forced mining companies to cut trees from the forest
for wood to burn in the power plants. This erratic and costly system prompted the investiga-
tion of hydro-electric power as a possible solution. Prain, Reflections, pp. 91–2. The World
Bank also believed infrastructure was an obstacle to growth, observing in a memorandum on
transport in Central Africa that mineral production could increase significantly if certain
‘transport bottlenecks were broken’. See Memorandum, Leonard B. Rist to William A. B.
Iliff, 13 October 1948, enclosing World Bank Economic Department report ‘Transport Bot-
tlenecks to Rhodesians Mineral Exports’, General Negotiations I; WB IBRD/IDA 01-RN
Country Operational Files for the Federation of Rhodesia and Nyasaland, 1946–71, World
Bank Group Archives (hereinafter WB IBRD/IDA 01-RN), 193424B, 1581031F.
Against these advantages officials had to weigh the growing African

opposition to closer union. Proponents of the scheme argued that future
economic prosperity owing to federation would eliminate political objec-
tions. In British parliamentary debates on the creation of the Federation,
proponents argued that Southern Rhodesia ‘could not stand alone—it
would go either north or south. Without political federation there would
not be the confidence or the economic scale to attract outside financing
for development. The real racial fears of both black and white could only
be ameliorated, it was argued, in conditions of economic prosperity.’75
Even as pressure grew for some kind of federal scheme, there remained
doubt within the Colonial Office about the potential economic and fiscal
benefits of federation. Nyasaland’s position provides a key example.76
Joint economic planning under the Central African Council had largely
favoured Southern Rhodesia, according to Nyasaland’s governor. On the
fiscal side, one obvious benefit to Britain was that the wealthier Rhodesias
could support Nyasaland, by far the poorest of the three territories. As
one Northern Rhodesian businessman bluntly observed in his memoirs,
‘the British Government wanted to get rid of the burden of having to sup-
port Nyasaland, which was not a viable economic entity’.77 This would
conceivably limit the potential demand for grants-in-aid. It would not,
however, eliminate applications from Nyasaland or Northern Rhodesia
for Colonial Development and Welfare funds, making the scale of the
potential savings unclear.
Despite these doubts, the Federation officially came into being when
the Rhodesia and Nyasaland Federation Act, 1952, authorized the provi-
sion of the Order-in-Council which was published on 1 August 1953.78
The main body of the Federal Constitution, drawn up along with the
Order in Council, provided for the establishment of a Federal Govern-
ment, a unicameral legislature, a Federal Supreme Court and other au-
thorities, and for the financial management of the Federation.79 An
interim Federal Government was established in September 1953 to make
arrangements for the first Federal general election to be held in December
1953.80 The first Federal Assembly, elected in the December 1953 elec-
tions, included twenty-six elected members (fourteen from Southern
Rhodesia, eight from Northern Rhodesia, and four from Nyasaland), six
75
Gifford, ‘Misconceived Dominion’, p. 398.
76
Murphy, Central Africa, Vol. 1, pp. xlix–li.
77
Sardanis, Africa, p. 45.
78
79
Colonial Office, Advisory Commission on the Review of the Constitution: Report
Appendix VI, Survey of Developments since 1943, pp. 1–2.
80
Wood, The Welensky Papers, p. 381.
African members (two elected in each territory), and three European

members charged with special responsibility for African interests (one of
whom was elected in Southern Rhodesia and the other two were ap-
pointed by the Governors of Northern Rhodesia and Nyasaland, respec-
tively). The composition of the electorate was dictated by legislation at
the territorial level. Southern Rhodesia required both means (namely the
ownership of property above a certain minimum value) and educational
qualifications for voter registration. Northern Rhodesia and Nyasaland
had similar requirements.81 While the Constitution contained no explicit
racial discrimination with regard to voters or candidates, these require-
ments tended to limit the franchise largely to European voters.82 The Fed-
eral Assembly also included a standing committee called the African
Affairs Board, which was tasked with looking out for African interests.83
The division of functions between the federal and territorial governments
outlined in the first constitution was organized on the principle that serv-
ices related to the life and work of Africans should continue to be provided
by the territories, while all other services should be provided at a federal
level. According to Hazlewood, ‘this principle put the major powers over
public order and the economy in the hands of the federal government,
which was also given the major sources of revenue to pay for its services’.84
Functions assigned to the Federal government included defence, immigra-
tion, banking and monetary policy, trade, railways, shipping and transport,
aviation, European education, weights and measures, and veterinary serv-
ices, among others.85 Its revenue came from the collection of customs and
excise duties, taxes on income and profits, sales taxes, and fees for various
services. A percentage of income tax revenue was in turn redistributed to
the territorial governments. Initially, the Constitution mandated the return
of 13 per cent of income tax revenue to Southern Rhodesia, 17 per cent to
Northern Rhodesia, and 6 per cent to Nyasaland.86
Regional integration in East Africa

Though the political union of the three East African territories had been
discussed in the inter-war period, the British government made little
effort to push such an agenda after the war. This was largely due to political
81
Colonial Office, Advisory Commission Report: Appendix IV, p. 5.
82
Mulford, Zambia, p. 49.
83
Colonial Office, Advisory Commission Report: Appendix IV, pp. 16–19.
84
85
Colonial Office, Memorandum on the Federation of Rhodesia and Nyasaland, 6
November 1953, in TNA CAOG 14/35.
86
Colonial Office, Advisory Commission Report: Appendix IV, pp. 483–4.
opposition from Tanganyika and Uganda, where Africans had similar

concerns to those voiced in Northern Rhodesia and Nyasaland. The other
two territories had long felt that regional agreements in East Africa were
designed to benefit Kenya’s settlers—the protective tariffs introduced in
the 1920s, for example, ‘had been the subject of frequent disputes be-
tween the Kenyan and the other two governments, which felt they pro-
tected European-produced goods in Kenya, at the expense more
particularly of African consumers’.87 A 1945 White Paper stated plainly
that ‘it is clear from expressions of public opinion during the last few
years that there exists at the present time neither the community of inter-
est nor the public support which a scheme of political closer union would
require’.88
The Colonial Office nevertheless emphasized that further cooperation
between the three territories would be beneficial to all of them. War-time
necessity had facilitated the closer cooperation of neighbouring territor-
ies in East Africa through a Joint War Council and, from 1940, a Joint
Economic Council established by the East African Governors’ Confer-
ence.89 The performance of these organizations had been hindered, many
thought, by a constitutional structure which required consultation and
agreement between the three member territories, which retained indi-
vidual powers.90
After the war ended the British government continued to encourage
further links. A later Colonial Office report summarized its position on
the issue, arguing that
The advantages to be gained from the close co-operation between the East
African territories are manifest. The economies of all three are linked. All the
imports and exports of Uganda, and those of the Northern Province of Tan-
ganyika, pass through Kenya’s port of Mombasa. Posts and telegraphs and air
communications are other obvious fields for collaboration. The three territor-
ies use a common currency and form a single unit for customs purposes. In
many other spheres great benefits are to be obtained from a common ap-
proach. Research into a wide range of common problems is likely to be most
effectively and most economically carried out by organizations formed inter-
territorially, with financial and other resources pooled and duplication
avoided. In defence matters, the East African territories must clearly work
together.91
87
Elkan and Nulty, ‘Economic Links in East Africa’, p. 331.
88
Colonial Office, Inter-Territorial Organisation in East Africa, p. 4.
89
Colonial Office, Report of the Economic and Fiscal Commission, pp. 2–3; Rotberg,
‘Federation Movement’, p. 149.
90
Rothchild (ed.), Politics of Integration, p. 47.
91
Colonial Office, British Territories in East and Central Africa, 1945–50, p. 27.
Though there would be no federation in East Africa, officials in London

still believed that greater regional integration would make the East Afri-
can territories both economically and fiscally stronger than they could be
as separate units.
This provided the motivation for the establishment in 1947 of the East
Africa High Commission. The structure of the organization had initially
been proposed in the 1945 White Paper. The High Commission itself
would consist of the governors of Kenya, Uganda, and Tanganyika. The
Commission would also employ a Chief Secretary, Financial Secretary, Dir-
ector of Transport, Postmaster General, and Commissioner of Customs,
who would be responsible for the common services to be administered by
the High Commission, and an Economic Adviser and Legal Secretary. The
White Paper also proposed a 36-member Legislative Assembly, consisting
of 12 official and 24 unofficial members. The unofficial membership was to
include six members each from the African, Asian and European communi-
ties, two members nominated by the High Commissioner to represent Arab
interests, and four others. The Legislative Assembly would have the power
to enact ordinances effective in all three territories (according to a specific
scheduled list) subject to the approval of the High Commission.92 The High
Commission was not intended to have its own independent financial re-
sources; rather, each community’s contribution to the common services was
to be decided by negotiation between the three territories.93
These proposals were generally supported by the various political, racial,
and economic communities of East Africa, though there was some disagree-
ment on the issue of racial representation on the Central Assembly. This was
strongest in Kenya’s Legislative Council and among Europeans in the
Arusha District of Tanganyika.94 This opposition led to a set of revised pro-
posals published in 1947.95 The most important change was to the structure
of the Central Assembly. According to the new proposals, the seven official
members appointed from the staff of High Commission services would be
joined by five members appointed from each of the three territories, and
one member of the Arab community appointed by the High Commission.
The five members from each territory were to include one official appointed
by the colonial administration, one unofficial member of the Legislative
Council elected by the other unofficial members, and one European, one
Asian, and one African appointed by the government.96
92
Colonial Office, Inter-Territorial Organisation, pp. 5–11; Rothchild (ed.), Politics of
Integration, pp. 48–9.
93
Colonial Office, Inter-Territorial Organisation, p. 11.
94
95
Colonial Office, Inter-Territorial Organisation: Revised Proposals.
96
Rothchild (ed.), Politics of Integration, pp. 51–2.
The revised proposals effectively reduced the representation of African

and Asian communities on the Central Assembly. Predictably, they were
supported by the European groups which had objected to the 1945 pro-
posals, and were opposed by the African and Indian communities which
had supported the earlier structure. Despite this opposition, motions to
accept the new proposals were carried in all three Legislative Councils,
and in July 1947 Sir Arthur Creech-Jones, then Colonial Secretary, an-
nounced that they would be brought into force.97
The establishment of the East Africa High Commission strengthened
and expanded the public services for which responsibility was shared be-
tween the three territories. The Kenya and Uganda Railways and Harbours
Administration and the Tanganyika Railways and Ports Services were amal-
gamated in 1948, forming the East Africa Railways and Harbours Admin-
istration. The two customs departments which had coexisted were
amalgamated the following year. Further, a number of Colonial Develop-
ment and Welfare Schemes also came under the remit of the High Commis-
sion, including research into agricultural problems and higher education.98
S E L F  S U F F I C I E N T N E W S TAT E S ? F I S C A L
C O N S E Q U E N C E S O F R E G I O N A L I N T E G R AT I O N
It is difficult to know the extent to which the expansion of inter-territorial

cooperation in Central and East Africa achieved its initial goals. The Colo-
nial Office’s intent in encouraging the increased integration of neighbour-
ing colonies was, as described above, to create larger political and economic
entities which it believed would be more self-sufficient. In terms of the
fiscal impacts of regional integration, it believed that larger markets would
facilitate economic diversification, making colonial administrations less
vulnerable to shifts in global commodity prices. Further, the provision of
public services on a regional level could take advantage of economies of
scale and prevent the duplication of efforts between territories.
From an economic and fiscal perspective, the Federation accomplished
only some of its goals. Dependence on the stability of the copper price
increased, rather than decreased. Prain believes that Southern Rhodesian
Prime Minister Godfrey Huggins had always ‘had his eyes on the increas-
ing importance and wealth of the Copperbelt’ while lobbying London for
the establishment of the Federation.99 He observes that by 1955, ‘the in-
97
Ibid., pp. 52–4.
98
Colonial Office, Progress Report 1948–49, pp. 28–9.
99
dustry’s contribution to the Federation’s economy was represented by 37

per cent of total taxes, 63 per cent of the value of exports, 29 per cent of
net domestic output, and 23 per cent of net national income’.100
The Federation’s dependence on the copper industry went beyond the
industry’s contribution to public revenue through taxation. The copper
companies were a ready source of financial support for development
projects. Both copper companies made a variety of additional contribu-
tions to development projects in the Federation, either voluntarily or as
part of a negotiated settlement to avoid additional taxation. In December
1955, Prain and Sir Ernst Oppenheimer (chairman of the Anglo-American
Group) met with the Federal Cabinet and agreed to loan a total of £30
million to the Federation if the Federal government would forgo the im-
position of an export tax on copper.101 The two companies also provided
funds for African and European education, established a Technical Foun-
dation on the Copperbelt, and contributed to the cost of building the
University of Rhodesia and Nyasaland. The Anglo-American group pro-
vided £9 million to the Rhodesia Railways, and made large investments in
Wankie colliery.102 R.S.T. also loaned £2 million to Northern Rhodesia
and £1 million to Nyasaland for African development projects.103
Another goal of federation had been to encourage economic diversi-
fication by providing a larger market for local manufactures. Despite
the fact that the region’s dependence on the copper industry did not
diminish, one of the few economic analyses of the Federation of Rho-
desia and Nyasaland suggests that at least some diversification did in
fact occur. Pearson and Taylor argue that the growth of the manufactur-
ing industry, in particular, ‘has been considerably greater than it would
have been had the three territories remained separate’. However, they
observe that the expansion of manufacturing was unevenly distributed
between the three constituent territories, occurring primarily in South-
ern Rhodesia. However, they argue that ‘it is probably also true to say
that for Northern Rhodesia and Nyasaland the rates of growth of manu-
facturing industry have been less than they would have been had there
been no Federation’.104
The contribution of copper to the Federal budget meant that Northern
Rhodesia often found itself subsidizing services to the other two territories.
100
Ibid., pp. 122–3.
101
Trancart, Memorandum on the visit of R. L. Prain, Chairman of the Rhodesia Selec-
tion Trust, 8 February 1956, in WBGA WB IBRD/IDA Federation General Negotia-
tions—Correspondence 1956–63; 193424B.
102
Prain, Reflections, pp. 122–3.
103
Ibid., p. 125.
104
Pearson and Taylor, Break-Up, p. 18.
Southern Rhodesia received by far the bulk of Federal public expenditure,

despite contributing approximately the same amount to Federal revenue
as Northern Rhodesia. From 1955 to 1961, Southern Rhodesia received
£241,400,000 in Federal expenditure, though it contributed only
£179,700,000 to the revenue of the Federal government during this
period. In contrast, Northern Rhodesia received £106,700,000 in Fed-
eral expenditure, despite contributing only £300,000 less than Southern
Rhodesia to revenue. Nyasaland made no substantial contribution to
Federal revenue, but received only £29,500,000 in Federal expendi-
ture.105 Gifford argues that Nyasaland’s benefit was, however, ‘nowhere
near proportionate to her population’.106
Further, the fiscal structure of the Federation meant that it was no
longer just Northern Rhodesia’s budget which suffered when the copper
price declined, but also that of the other two territories. Federation ap-
pears to have contributed only marginally to greater fiscal stability. The
end of the copper boom provides the best evidence of this. Northern
Rhodesia’s contribution to income tax revenue declined from £30,500,000
in 1956/57 to £18,600,000 in 1957/58. Southern Rhodesia’s revenue
from the same source increased from £16,700,000 to £19,600,000 in the
same period, while Nyasaland gained just £100,000. Pearson and Taylor
argue that ‘it would clearly be untrue to say that the result of the combi-
nation of the two economies (and in this connection Nyasaland’s contri-
bution has been so small as to be safely ignored) has not lent towards
somewhat greater stability. But it would clearly be equally untrue to say
that in any significant sense there has been a large measure of stabilization
of income tax revenues.’107 Overall Federal revenue declined from
£45,200,000 in 1956/57 to £42,500,000 in 1957/58 and then to
£41,400,000 the following year, a nearly 10 per cent drop in a period
when Federal authorities were planning considerable increases in
expenditure.108
Whether Federation increased the creditworthiness of the region is also
open to question. The proposition that it had would seem to be sup-
ported by the relative ease in financing the massive Kariba Dam hydro-
electric project, for which the World Bank eventually agreed to lend £28.5
million—as Prain notes, ‘the largest loan the Bank had ever made for a
single project, and its biggest investment in Africa’.109 It should, however,
be noted that the British government guaranteed the Federation’s loan
105
Ibid., p. 55.
106
107
108
Central Statistical Office, National Accounts and Balance, p. 36.
109
applications (as it did for other colonies), and it is difficult to know

whether the amount of the loan was based on the Federation’s creditwor-
thiness or Britain’s. For its part, the World Bank was not immediately
convinced that the increased size of the Federation relative to its compo-
nent territories made it a better candidate for development loans. A 1954
memorandum considering a loan to the Federation noted that ‘the
creditworthiness of the Federation cannot be judged without further con-
sideration: it is virtually a new country’. It further argued that although
the Bank ultimately relied ‘on the guarantee of the United Kingdom for
the repayment of loans to the colonies’, it was particularly important in a
territory which was (as was then believed) ‘near dominion status and
financial autonomy’ to consider the creditworthiness of the territory
itself.110 As late as 1960, the Bank considered the UK government’s guar-
antee of the Federation’s loans ‘a welcome additional reassurance’.111
The East Africa High Commission had a similarly mixed record. By
1961, when regional services were taken over by the East Africa Common
Services Organisation (EACSO), the services provided on a regional basis
had expanded to such an extent that they provided some 21,000 jobs and
accounted for around 8 per cent of the GDP of East Africa.112 These serv-
ices fell into five main functional categories: financial, social, economic
and administrative, communications, and research, of which communi-
cations was the most important.113 In 1960 the report of a government
commission appointed to examine the arrangements for economic, fiscal,
and administrative coordination in East Africa (the Raisman Commis-
sion) concluded that the provision of common services and the common
market had benefited the region as a whole, generating economic expan-
sion as well as providing public services more efficiently.114
However, from the early years of its existence, the EAHC’s ability to
function was hindered by its relationship to its constituent territories and
the fact that it had no independent source of revenue. The report of the
Raisman Commission observed that ‘since the manner in which a territor-
ial government is able to carry out its own responsibilities is affected by
the revenue available to it, territorial Governments are bound to weigh
110
Memorandum SLC/0/641, Department of Operations, Europe, Africa and Australa-
sia, to Staff Loan Committee, ‘The Federation of Rhodesia and Nyasaland’, 6 January
1954; General Negotiations II; WB IBRD/IDA 01-RN; 193424B, 1581032F.
111
Memorandum, Stanley Nehmer to Staff Economic Committee, ‘Staff Economic
Committee Meeting on the Federation of Rhodesia and Nyasaland’, 4 January 1960; Gen-
eral Negotiations III; WB IBRD/IDA 01-$N; 193424B, 1581033F.
112
Nye, ‘East African Economic Integration’, p. 478.
113
Ibid, p. 480.
114
Colonial Office, Report of the Economic and Fiscal Commission, p. 61.
the financial requirements of the High Commission services against their

own needs, and to tilt the scales in favour of the latter’.115
Further, there was a persistent perception in Tanganyika and Uganda
that Kenya benefited disproportionately from both the common services
and the common market. The administration of many of the common
services, as well as those of the EAHC and Central Legislative Assembly
were based in Nairobi, meaning a large proportion of the 21,000 jobs
created by common services went to people living in Kenya (though not
necessarily Kenyans). The expansion of manufacturing in Kenya led to a
loss of customs revenue in the other two territories, which led the gover-
nor of Uganda to propose a system of fiscal compensation.116 The report
of the Raisman Commission in 1960 seemed to confirm this perception,
observing that average real income per head had risen very rapidly in
Kenya but much less so in Tanganyika and Uganda.117
D I S T R I B U T I O N A N D R E P R E S E N TAT I O N : T H E
P O L I T I C A L FA I LU R E O F R E G I O N A L I N T E G R AT I O N
The fiscal effects of regional integration were therefore mixed, and would
require additional research to measure with any degree of certainty. In the
end, however, it was largely irrelevant. Political opposition continued to
be driven by the disproportionate representation and influence of immi-
grant communities in territorial governments and regional superstruc-
tures. The Monckton Commission appointed to review the Federation’s
constitution in 1959 observed that ‘the dislike of Federation among Afri-
cans in the two Northern Territories is widespread, sincere, and of long
standing. It is almost pathological. It is associated almost everywhere with
a picture of Southern Rhodesia as a white man’s country.’118 It was this
political opposition, paired with controversies over the distribution of
benefits from regional cooperation, which would ultimately prove the
greatest challenge to regional integration, leading to the demise of the
Federation in 1963 and limiting the effectiveness of EACSO.
In Northern Rhodesia, opposition to Federation had faded in the first
years after its establishment (though the Interim Federal Government had
met with resistance in Northern and Southern Provinces immediately
115
Ibid, pp. 14–15.
116
This request led to the appointment of the Raisman Commission, and a modified
‘common pool’ system was adopted following the recommendations of the Commission.
See Nye, ‘East African Economic Integration’, pp. 481–2.
117
Colonial Office, Report of the Economic and Fiscal Commission, p. 21.
118
Colonial Office, Review of the Constitution of Rhodesia and Nyasaland, p. 16.
after its creation).119 The African National Congress had lost much of its
initiative when the campaign to stop federation failed in 1953, and the
ANC remained quiet for the first few years thereafter.120 This was partly
because, as Mulford writes, ‘the first three years of Federation did not
confirm the earlier fears of most Africans; indeed, living standards im-
proved and job opportunities were more numerous’.121
The later 1950s, however, saw a new resurgence of African opposition to
Federation. The catalyst for this was the constitutional reforms of 1957. These
reforms, which reduced the influence of African representatives in the Federal
Assembly, seemed to violate the principle of partnership which had been
promised when the Federation was established. The British government’s ac-
ceptance of these reforms, according to Gifford, sent a message that Parlia-
ment would defer to the Federal government’s wishes in the review of federal
constitutional arrangements scheduled to take place in 1960, and that the
mechanisms set up to safeguard African interests were ineffective.122
These tensions were exacerbated by the end of the copper boom in
1957, which significantly reduced the resources that could be distributed
between the territories. Prain recalls that ‘in Southern Rhodesia in par-
ticular, many government officials were quite unaware of the cyclical
nature of the copper business and they had formed in their minds ideas of
perpetual prosperity and grandiose schemes of development’. The end of
the boom served as a reminder of the industry’s vulnerability and served
to ‘focus attention on increasing African opposition to the new structure
which was bringing them few tangible benefits and little or no political
opportunity’.123 Paired with the end of the copper boom was the 1958
reduction of a federal government subsidy of maize, a staple food for most
Africans, which increased the cost of living.124
The renewed activism driven by these economic and political shifts in
the Federation eventually led to a split in the African National Congress.
In 1958 Kenneth Kaunda, who would later become the president of in-
dependent Zambia, and several others left the ANC to form the Zambia
African National Congress (ZANC, later the United National Independ-
ence Party or UNIP).125 The 1959 election, which like its predecessors
119
Rotberg, Rise of Nationalism, pp. 259–63; Wood, Welensky Papers, p. 382.
120
This was also due to internal dispute within the Congress. See Mulford, Zambia, pp.
36–9.
121
Ibid., p. 38.
122
Gifford, ‘Misconceived Dominion’, pp. 403–5. See also Rotberg, Rise of Nationalism,
p. 256.
123
124
125
Mulford, Zambia, pp. 73–6; Rotberg, Rise of Nationalism, p. 291.
‘was essentially a contest among Europeans’, did allow a relatively large

number (albeit still a minority) of Africans to vote for the first time,
though European majorities were constitutionally mandated and there-
fore not open to question.126 This was not enough to prevent the outbreak
of unrest not only in Northern Rhodesia, but also in Nyasaland, where a
state of Emergency was declared, and Southern Rhodesia, where the gov-
ernment assumed emergency powers ‘as a precautionary measure’.127
Compared with the Nyasaland Emergency, the difficulties in Northern
Rhodesia seemed relatively minor. However, subsequent years saw no im-
provement in the political situation in Northern Rhodesia (or the rest of
the Federation). By 1962 the chaos caused in rural provinces by the Cha
Cha Cha campaign forced the British government to revise the new con-
stitution to ‘pave the way for majority rule’.128 The Federation was dis-
solved a year later and ceased to exist from January 1964.129
In East Africa, the more limited extent of inter-territorial coordina-
tion meant it was less central to the claims of nationalist movements,
which focused more on issues of representation and distribution within
the individual territories. However, the perception that inter-territorial
institutions benefited Kenya more than the other two fed African op-
position to colonial rule generally. The Tanganyika and Uganda Legisla-
tive Councils were both critical of the Commission during the 1950s,
and in 1959 the Tanganyika Federation of Labour voted for its dissolu-
tion.130 This opposition was, however, not so strong as to preclude the
continued participation of Uganda and Tanzania in EACSO after
independence.
Further, independent East African countries were willing to recon-
sider closer union on their own terms, and in June 1963 the three gov-
ernments issued a joint declaration in which they pledged themselves ‘to
the political federation of East Africa’. They were motivated on the one
hand by ‘the spirit of pan-Africanism’, but also by many of the same
goals which had inspired colonial regional integration policies. They
claimed that the creation of a federation would be facilitated by the
common aspirations as well as the ‘common history, culture and cus-
toms’ shared by the three territories. Further, Federation could further
the economic benefits of existing regional integration arrangements.
The declaration proclaimed that
126
For more on the expansion of the franchise in 1959, see Colonial Office, Advisory
Commission Report, pp. 44–6.
127
Mulford, Zambia, p. 93.
128
Tordoff and Molteno, ‘Introduction’, p. 9.
129
130
Nye, ‘East African Economic Integration’, p. 479.
For 40 years the imperialists and local settler minorities tried to impose pol-
itical federation upon us. Our people rightly resisted these attempts. Federa-
tion at that time would quickly have led to one thing—a vast white-dominated
Dominion. The East African High Commission and its successor, the
Common Services Organization, have taught us the value of links in the
economic field.131
Despite this enthusiasm, the proposed East African Federation was never
established, largely due to the fact that the aspirations of the three inde-
pendent territories were not as similar as they had believed in 1963. Roth-
child attributes the differences that emerged to a growing national
consciousness after independence. ‘So much energy became consumed by
the demands of nation-building that little remained for such less immedi-
ate goals as political federation.’132 The Federation became a matter for
dispute between Kenya’s two main political parties, KANU and KADU,
partly due to differences between the respective economic policies of the
two parties.133 Differences between the economic policies of the constitu-
ent countries were also a major obstacle towards Federation. Kenya under
its KANU government pursued economic policies which emphasized
economic growth rather than redistribution, despite its proclamations
about African socialism.134 Tanzania, on the other hand, pursued an ag-
gressive policy of redistribution under Julius Nyerere, stressing ‘a more
equitable distribution of the country’s wealth at the explicit expense of
high rates of economic growth’, and following an economic logic more
agreeable to KADU than to KANU.135
The political failure of regional integration is perhaps not surprising.
Winks observed in 1970 that all federations ‘involve, quite naturally, a
degree of give and take which implies a similarity of basic goals between
the units of the proposed or existing federal structure’.136 The different
goals of the constituent territories, and communities, within the Central
and East African groups made the prospect of successful regional integra-
tion difficult, both before and after independence. The emergence of
better organized political parties and nationalist movements increased the
political costs of enforcing unpopular policies of regional integration rela-
131
‘A Declaration of Federation by the Governments of East Africa’, 5 June 1963, in
Rothchild (ed.), Politics of Integration, pp. 76–8.
132
133
Ochieng, ‘Structural & Political Changes’, p. 95.
134
Barkan, ‘Divergence and Convergence in Kenya and Tanzania’, pp. 5, 10–11; Stewart,
‘Kenya Strategies for Development’, pp. 77–8.
135
Barkan, ‘Divergence and Convergence’, p. 5.
136
Winks, Failed Federations, p. 5.
tive to the pre-war period, making Colonial Office goals of establishing

larger and more self-sufficient territories unrealistic.
As both territories would discover, however, the motivations for re-
gional integration remained despite the transition to independence. In
1968, Rothchild wrote regarding the failure to build a post-independence
federation in East Africa that
Because federation is a response to genuine needs, it seems certain that the
desire to found transnational unions will persist in the years to come. Eco-
nomic inducements such as regional comparative advantage and economies
of scale as well as expanded opportunities for inter-territorial projects (elec-
tric power and irrigation systems), a wider financial base, and a more ra-
tional allocation of skilled technicians and managerial personnel are
constants—even if the benefits apply unequally to prospective partners.137
After independence the governments of both countries discovered that
they faced many of the same resource constraints as their colonial coun-
terparts, and therefore the same fiscal incentives for regional cooperation.
The outright failure of regional cooperation in Central Africa after Zam-
bia’s independence proved exceedingly costly to the new state, which was
forced to replace the services and infrastructure which had been based in
Southern Rhodesia. In East Africa, the formation of any sort of political
union proved politically impossible, which therefore continued to limit
the effectiveness of regional service provision.
*****
This chapter has examined how the revenue imperative influenced poli-
cies of regional integration encouraged by the Colonial Office after World
War Two, leading to the creation of the Federation and the EAHC, among
other groups. Despite dramatic increases in public revenue after the war,
fiscal crises in both colonies revealed that their fiscal systems were still
vulnerable to sudden declines in revenue or the need for increases in ex-
penditure. Colonial officials believed that larger territorial units would be
able to diversify their economies and build a more stable fiscal base, in
addition to providing public services more efficiently through economies
of scale. Like the restructuring of local governments examined in the pre-
vious chapter, regional integration was intended to help transform col-
onies into self-sufficient nations in anticipation of the transfer of power.
This was also true of regional integration movements elsewhere in the
British Empire. Proponents of the West Indies Federation, established in
1957, believed that it would help diversify the economy of the region as a
137
whole by removing trade barriers.138 Like the Central African Federation,
the West Indies Federation was short-lived, and broke apart when Jamaica
became independent in 1962.139 As in East Africa, inequality between is-
lands made such a union politically challenging.140
Little work has been done on whether or not regional integration
efforts were successful in achieving these goals. This chapter has suggested
that they achieved little of what they set out to do. The political unpopu-
larity of these policies among Africans meant that they did not long sur-
vive decolonization, regardless of their fiscal success. However, as the next
chapter will show, regional integration agreements did increase the inter-
dependence of neighbouring territories, and their demise after independ-
ence had severe fiscal consequences.
138
Springer, ‘The West Indies Emergent’, p. 13.
139
140
Springer, ‘The West Indies Emergent’, p. 9.
9
Self-Sufficiency Policy and the Fiscal
Consequences of Decolonization
Between 1947 and 1960 the African Empire toppled into decline
and fall. In this sense it was lost as it had been acquired, with illu-
sions about the nature of man and the destiny of nations.1
This volume opened with the question of what purpose the Empire served
for Britain or the colonies, if in fact it served a purpose at all. Joseph
Schumpeter defined imperialism as ‘the objectless disposition on the part
of a state to unlimited forcible expansion’.2 By this he meant that it was
not a policy intended to lead to any consistent or achievable end. Rather,
the expansion of the Empire continued through institutional inertia,
driven by those who stood to benefit individually from the expansion of
British authority. The financial organization of the Empire around the
principle of colonial self-sufficiency in many ways supports this view; re-
quiring colonies to manage their own finances was a sign that the imperial
government did not seek to actively develop its colonies, nor extract fi-
nancial resources from them.
A parallel argument regarding the tension between individual and col-
lective interests might be made regarding the nationalist pressure for
political independence which emerged in many colonies after the end of
World War Two. Historians have found it difficult to explain why decolo-
nization occurred when and how it did, and what interests were served by
the rapid transition to independence of the African colonies from the late
1950s. The dismantling of the British Empire in Africa, much like its
foundation, proceeded in a disorderly and unplanned fashion.3 Further-
more, the nationalist movements lobbying for independence were no
more coherent and single-minded than proponents of imperial expan-
sion. As Darwin notes, ‘nationalists were not always freedom-fighters
1
Louis and Robinson, ‘The United States and the End of British Empire’, p. 53.
2
Schumpeter, Imperialism and Social Classes, p. 7.
3
Flint, ‘Planned Decolonization’, p. 410. This conclusion is somewhat controversial.
For a different view see Pearce, ‘Planned Decolonization in Africa’, pp. 77–93.
Fiscal Consequences of Decolonization 225
dedicated to the uncompromising pursuit of national independence’.

Rather, nationalist movements had to build support from a wide variety
of often competing groups, interests, and communities discontented in
various ways with colonial rule. They did this by combining ‘cloudy rhet-
oric with the search for grassroots causes’.4 Pressure for independence was
therefore not necessarily reflective of broad-based activism for self-gov-
ernance, but was rather the combination of divergent interests coalescing
around a faith ‘in the capacity of the independent nation-state to promote
material progress and cultural renewal’.5
On the British side, Feinstein argues that although the Empire had
proved economically valuable in the immediate post-war years, Britain’s
economy had ceased to profit significantly from the Empire by the 1950s,
and therefore did not suffer from its loss.6 The Empire was considered key
to Britain’s standing as a major world power, and strategic considerations
extended its life even after its economic value to Britain had declined.7
However, by the late 1950s, economic and financial concerns had become
increasingly important to the British government. This shift culminated
in the cost-benefit analysis commissioned by Prime Minister Macmillan
in 1957. As Cooper writes, this commission ‘was most unChurchillian: a
calculation of economic and geopolitical interest devoid of imperial
fervor’.8 The analysis concluded that, for Britain, losing the Empire would
not impose any major economic costs.
One of the concerns of colonial officials in the late 1950s was that the
rising expectations of people and political parties in the colonies them-
selves could not be met except at immense additional cost.9 Independ-
ent governments also struggled to meet these expectations. Contrary to
the hopes of nationalists, political independence was not a panacea for
the social or economic ills of the former colonies. An empirical assess-
ment of the benefits and costs of decolonization for the colonies is
therefore long overdue. A complete balance sheet of decolonization
would attempt to measure its financial and economic costs and benefits,
balanced by its impact on the political and strategic considerations of
post-independence governments and their constituents.10 This chapter
4
Darwin, End of the British Empire, p. 88.
5
Hargreaves, Decolonization in Africa, p. 3.
6
Feinstein, ‘The End of Empire and the Golden Age’, pp. 213, 232.
7
Hopkins, ‘Macmillan’s Audit of Empire’, p. 260. For an overview of Britain’s strategic
considerations during decolonization, see Louis, ‘Suez and Decolonization’, pp. 1–31.
8
Cooper, Decolonization and African Society, p. 395.
9
Ibid., pp. 392–4.
10
These were the criteria for Macmillan’s 1957 assessment. See minute from Prime
Minister to the Lord President of the Council, 28 January 1957, reprinted in Porter and
Stockwell, British Imperial Policy and Decolonization, p. 451.
does not attempt such a study, which awaits future research. However,
it will offer a preliminary analysis of the impact of decolonization on
government finance in Kenya, which achieved independence in 1963,
and Northern Rhodesia, which became Zambia following the transfer
of power in 1964.
Though often neglected in political histories of decolonization, debates
over the collection and distribution of public funds were key ingredients
in the emergence of nationalism in Africa from the inter-war period, and
in the increasing pressure for independence in the 1950s and 1960s. They
also became a central feature of political discourse after independence,
when fiscal realities limited the options available to newly independent
governments. For administrators of the new states, public resources were
key to resolving what they believed were the most serious problems inher-
ited from the colonial period, particularly economic inequality, poverty,
and unemployment. Understanding the fiscal impact of decolonization
can not only provide a better understanding of colonial governance, but
also help explain why nationalists failed to meet many of their economic
and political goals after independence.
P OT E N T I A L F I S C A L I M PA C T S O F P O L I T I C A L
INDEPENDENCE
Previous chapters have outlined the efforts made by the British govern-
ment and colonial administrations to make individual colonies financially
self-sufficient. These included the establishment and expansion of systems
of direct taxation, the prioritization of revenue earning instead of protec-
tion in customs tariffs, the restriction of public expenditure, delegation
of financial responsibility to local authorities, and the encouragement of
regional cooperation, among others. Though resource constraints contin-
ued to limit the options of colonial administrations, these policies were
for the most part successful in creating colonial administrations which
made few demands on the British Treasury.
If colonies were, in fact, financially self-sufficient, then decolonization
should in theory have had very little impact on their public finances.
Unfortunately, the picture is more complicated than this, and there were
a variety of fiscal consequences in the transition from colony to state. The
breakup of the Empire meant an end to any economies in scale in public
services provided by cooperation between the Empire’s constituent terri-
tories. Defence, for example: newly independent states could no longer
rely on British defence forces to help maintain stability either outside or
within their borders. Access to foreign aid and investment was another
issue, as the creditworthiness of former colonies would suffer without

the British guarantee, implicit or explicit, of their loans. Further, services
provided on a regional basis were politically difficult to sustain after
independence, forcing newly independent nations to provide them indi-
vidually. This was particularly relevant in Zambia after the collapse of the
Central African Federation in 1963. Lastly, colonies could no longer
count on the British government to provide financial support to com-
pensate for budget deficits after independence. Despite the long-standing
dislike of Treasury control, grants-in-aid had remained a part of colonial
financial planning—a condition which would no longer hold after the
transfer of power.
The other, more indirect effect of political independence was the
shift to an elected rather than autocratic regime. Nationalists hoped that
the newly elected governments of independent states would be more
accountable to the desires of their constituents regarding the allocation
of public funds. Peter Lindert’s research on the history of public expendi-
ture in the developed world shows a strong relationship between the
composition of the electorate and the provision of certain social serv-
ices.11 If post-independence regimes were in fact more democratic than
their colonial predecessors, then a similar shift in the allocation of public
expenditure should be visible after independence. Such a shift is indeed
apparent in the budgets of Kenya and Zambia, both of which dramatic-
ally increased their spending on services like education and healthcare,
neglected during the colonial period. In both countries, however, these
increases were ultimately unsustainable, and the period of democratic
rule after independence was short-lived. This chapter will argue that
the rapid move towards single-party rule amongst African governments
was closely related to the weakness of the fiscal foundations which their
democracies had inherited from their colonial predecessors.
WA S I T C H E A P E R TO G OV E R N A C O L O N Y ?
According to the literature on the costs and benefits of the Empire to

Britain, one of the costs to Britain of possessing an empire was the provi-
sion of subsidies to the colonies. While British grants made up only a tiny
fraction of colonial revenue, and most colonial expenditure was supported
by local revenue, it is arguable that the colonies received some fiscal bene-
fit from British spending on public services from which the colonies also
benefited.
11
For a summary, see Lindert, Growing Public, Vol. 1, pp. 23–4.
Some historians have claimed that British defence spending was one
such indirect ‘subsidy’ provided to the colonies. Davis and Huttenback
argue that ‘of all the subsidies enjoyed by the colonies, none was more
lucrative than that for defense’.12 John Darwin writes that colonies could
not have ‘pressed so rapidly ahead with their economic development had
their budgets been loaded with military estimates’.13 As part of an empire,
colonies needed to spend less of their own money on defence because they
could call on British troops in case of emergency without having to estab-
lish and maintain their own defence force. Further, imperial government
funded some colonial defence forces, such as the King’s African Rifles in
East Africa.14
However, there are several reasons to qualify this conclusion. To start,
Davis and Huttenback ignore contributions made by the colonies them-
selves to maintaining peace and stability both within and outside their
own jurisdictions.15 The Empire as a whole made sizeable contributions,
both financially and in terms of manpower and raw materials, to the Brit-
ish war effort in both world wars.16 Internally, colonies supported their
own police and, at times, military forces, which handled all but the most
serious breakdowns in public order.17
Even when major disturbances arose, British forces were not always
immediately available, nor were they always entirely funded by the British
government. The funding of Kenya’s Emergency in the 1950s provides
one example. After Kenya declared a state of emergency in 1952, Britain
was slow to contribute additional funds to the costs of the campaign
against Mau Mau, insisting that it was a local rebellion and as such the
colonial administration must meet the cost itself. British troops were dis-
patched, but only on what the Treasury called an ‘extra-cost’ basis, mean-
ing that the costs of having the troops in Kenya had to be reimbursed by
the Kenyan administration.18 When Ernest Vasey, Kenya’s Minister of Fi-
nance, visited London in 1953 he explained that the expense of the
12
13
Darwin, ‘Was there a Fourth British Empire?’, pp. 18–19.
14
Secretary of State for the Colonies, ‘The Economic and Financial Position of Kenya’,
presented to the Kenya Constitutional Conference, 26 February 1962, in TNA CO
822/2248.
15
Edelstein, ‘Imperialism: Cost and Benefit’, p. 211.
16
For colonial contributions to imperial defence spending before World War One, see
Offer, ‘The British Empire, 1870–1914’, pp. 28–9; for World War One, see Offer, ‘Costs
and Benefits’, p. 708; and for World War Two see Feinstein, ‘End of Empire’, p. 215. For
an example of the local politics of this support, see Wavell, Viceroy’s Journal, p. 89.
17
For more on colonial defence and policing, see Killingray, ‘Maintenance of Law and
Order’, pp. 411–37; Parsons, The African Rank-and-File; Wright, History of the Northern
Rhodesia Police.
18
Memorandum on Kenya, 4 March 1953, in TNA T 225/771.
campaign against Mau Mau (projected to be £3.5 million in that year)

was rapidly depleting Kenya’s financial reserves and diverting funds away
from development. The Colonial Office, however, made it clear that the
British government could not provide a grant until Kenya showed clear
financial need (i.e. when reserves had been diminished), and that Kenya
should contribute to paying for the Emergency.19 When Vasey noted that
Malaya had received aid in a similar circumstance, the Treasury responded
that the conflict in Malaya was ‘one facet of the world-wide anti-Commu-
nist struggle’ rather than just a local affair.20 Though Britain ultimately
contributed significant sums in both money and manpower to the costs
of the Emergency, it by no means covered all of the expenditure needed
to restore order.
With regard to decolonization, the relevant questions are whether
whatever benefits the colonies did receive from British defence expendi-
ture ended at independence, and whether the purpose of defence spend-
ing by the former colonies after independence was the same as that of
their colonial counterparts. If the expenses of imperial defence were
shared between Britain and the colonies, it is arguable that the major
benefit individual colonies received was not in the form of direct trans-
fers, but rather the benefit of the ‘hegemonic stability’ provided by Britain
and the other superpowers.21 During the colonial period, peace on the
periphery was maintained in part by the presence of one or a few great
powers with military superiority, willing to enforce the peace. When the
imperial system began to break down, the relative stability of the periph-
ery began to unravel, and the former colonies faced threats that would
previously have been contained by the action of one or more imperial
powers. This was not a benefit afforded exclusively to colonies, or to the
colonies of a particular metropolitan state, but rather benefited
everyone.
This was particularly true for Zambia, which was affected by instability
on all sides after independence. When Zambia became independent in
1964, four of its eight neighbours were under colonial or white minority
rule.22 Zambia’s acceptance of refugees led the Portuguese to launch air
and land incursions across the border.23 Instability also spilled across the
19
Notes on Discussion with Mr Vasey, Finance member, Kenya Government, 12 June
1953, in TNA CO 822/577. The impact of Emergency expenditure on the colony’s fi-
nances is discussed in detail in Chapter 8.
20
Memorandum on Kenya, 4 March 1953, in TNA T 225/771.
21
Offer, ‘Costs and Benefits’, p. 707, n. 47.
22
These were Angola, Mozambique, Rhodesia, and South West Africa (now Namibia).
The others were Malawi, Tanzania, Congo, and Botswana.
23
Congo border to the north when the Katanga province attempted to

secede from the Congo at independence. The end of the attempted seces-
sion was followed immediately by the kidnapping and murder of Patrice
Lumumba, independent Congo’s first head of state.24 There were also in-
ternal outbreaks of unrest. In July 1964, just months before Zambia
achieved independence in October, violence broke out in Northern Prov-
ince between the followers of Alice Lenshina’s church and the surround-
ing pro-UNIP villages. The violence went on sporadically for several
months and claimed some 700 lives.25
While not as unfortunate in its neighbours as Zambia, Kenya also had
security concerns. This included rebellions by Somalis in the Northern
Frontier Province after the Province was declared a part of independent
Kenya.26 In addition, when the King’s African Rifles were split into separ-
ate forces for Tanzania, Uganda, and Kenya after the failure of the pro-
posed East African Federation, the Tanzanian soldiers mutinied to protest
low wages and slow promotions. The Uganda Rifles mutinied days later,
followed by a battalion of the Kenya Rifles. All three territories requested
military aid from Britain, and the revolts were ultimately put down by the
Royal Marines.27
Continued British influence was not only visible during emergencies like
the East African mutinies. Decolonization was a gradual process of years
rather than a simple one-off transfer of power.28 As in other specialized areas
of colonial governance, British personnel (particularly at senior levels) and
equipment remained in the colonies for years after independence.29 As late
as 1967, Zambia recruited expatriate officers (primarily British and Irish)
on contract, and until 1970 most of the officers were seconded from the
British Army. The first Zambian commanding officer of the Zambian Army
was not appointed until the end of that year.30 The retention of British
personnel with highly specialized skills, called ‘technical assistance’ by the
24
Reid, History of Modern Africa, p. 280.
25
Lenshina was the leader of a separatist religious sect called the Lumpa Church. For
more information, see Mulford, Zambia, p. 40; Rotberg, Rise of Nationalism in Central
Africa, p. 273; Tordoff and Molteno, ‘Introduction’, p. 12.
26
Nugent, Africa since Independence, pp. 79–82.
27
Parsons, The African Rank-and-File, pp. 45–6.
28
This aspect of decolonization has received little attention in the historical literature on
the subject, which tends to focus primarily on the political dynamics immediately before
and after the official handing over of power.
29
Former colonial officials also remained prominent in the Treasury and the Judiciary,
among others. Retention of such staff was perceived as of vital importance to the functioning
of post-independence regimes, which otherwise struggled to fill civil service posts. Tangan-
yika, for example, had 1,500 vacancies in its public services in 1962, and the Kenya Finance
Minister warned that Kenya was likely to be in a similar position by 1964. See Minister for
Finance, ‘Forecast Estimates 1963/65’, 6 November 1962, in TNA FCO 141/7049.
30
£12
£10
£8
Millions
£6
£4
£2
£0
1961 1962 1963 1964 1965 1966 1967 1968 1969
Zambia Kenya
Fig. 9.1. Defence expenditure in Kenya and Zambia, 1961–69 (constant £)

Source: Calculated from Kenya, Appropriations Accounts 1963–70; Zambia, Statistical Year-
book 1970.
British government, suggests that in the short run at least, the former col-
onies did not lose any of the defence benefits they may have had during the
colonial period. However, the greater instability of the continent following
independence made the security situation more difficult for both than it
had been for most of the colonial period.
Given the growing instability of the former colonial Empire after in-
dependence, it should be no surprise that defence expenditure increased
despite the continued willingness of Britain to intervene. Figure 9.1
shows expenditures on defence in Kenya and Zambia in the first few
years after independence. One question is whether post-independence
defence expenditures should be considered comparable to defence ex-
penditures during the colonial period. Were post-independence states
defending the same thing as their colonial counterparts? The extent to
which British defence grants can be considered a subsidy hinges in part
on the question of what colonial administrations were defending.
If one interprets the Emergency in Kenya, for example, as a purely anti-
colonial rebellion, then the grants given to the colonial administration in
support of its campaign against Mau Mau should be considered merely
expenditure on the maintenance of the imperial system as a whole, rather
than subsidies benefiting Kenyans. However, other interpretations of the
Emergency describe it as a civil conflict between segments of the Kikuyu
population, in which case the British government’s grants were to assist in
the restoration of stability to the colony.31 The answer to this question is
31
For a review of the debate over the interpretation of Mau Mau, see Berman, ‘Nation-
alism, Ethnicity and Modernity’.
beyond the scope of this work, but it is the type of question that needs to
be considered in discussions of the costs or benefits of the Empire. Out-
breaks of sectional violence in both colonies since independence suggest
that at least some groups believed there was little difference between the
colonial administration and the post-independence state.
Access to external capital was another potential subsidy of Empire. Davis
and Huttenback also argue that the imperial relationship facilitated access
to grants and loans for development.32 As previous chapters have discussed,
limited private investment made public investment exceptionally import-
ant in Africa. Neither Kenya nor Northern Rhodesia received grants from
Britain that were very substantial relative to the revenue they raised locally
in most years (with the exception, in Kenya, of the Emergency and the years
following its end), although they received a disproportionate amount of the
minimal aid granted by Britain. For all the changes in colonial development
policy through the inter-war and post-war periods, however, one constant
was the lack of adequate finance. Colonial spending, including grants and
Treasury loans, were a tiny proportion of the British budget.33 Further, by
the middle of the 1950s, the failure of many development plans to produce
results had disillusioned voters and policy-makers, who became increasingly
hesitant to fund colonial development programmes.34
As a result, Colonial Development and Welfare funding frequently
failed to meet expectations. In 1955, for example, the Colonial Office sent
a rather apologetic letter to Governor Evelyn Baring of Kenya informing
him that the legislation to extend the Colonial Development and Welfare
Acts up to 1960 had been passed by Parliament, and that Kenya’s alloca-
tion was £5 million, roughly half the amount anticipated beforehand. The
letter noted that the funding requests of most governments would not be
met in full by the new legislation. Since Kenya was already receiving sub-
stantial assistance from the British government towards the Emergency,
the author hoped Baring would agree that ‘in all the circumstances we are
dealing with your overall needs as generously as we possibly can’.35
As a supplement to the grants they did receive from the imperial govern-
ment, both colonies relied on loans for the expansion of infrastructure and
other investments. During the colonial period, the Colonial Stock Acts had
provided colonies with access to loans at subsidized rates, which Davis and
Huttenback argue constituted a subsidy to the colonies.36 However, the extent
to which colonial status actually constituted an advantage to borrowers has
become a matter for debate. Ferguson and Schularick argue that colonies
32
Davis and Huttenback, Mammon and the Pursuit of Empire, pp. 166–91.
33
Ashton, ‘Keeping Change within Bounds’, pp. 40–1.
34
Cooper, Decolonization and African Society, pp. 392–4.
35
Lloyd to Baring, 24 March 1955, in TNA CO 822/1017.
36
were able to borrow at lower rates of interest than similar independent coun-
tries due to the so-called ‘Empire effect’, which lowered the perceived risk of
lending to a colony than to a sovereign nation.37 On the other side of the
debate, Obstfeld and Taylor argue that membership in the British Empire
did not afford preferential access to London’s capital market, at least not
before World War One.38 More recently, Accominotti et al. have argued that
membership in the British Empire effectively removed the risk of default,
resulting in the favourable interest rate offered to colonies.39
Whatever the benefit of colonial status for the terms of loans, the
demand for loans from the colonies overwhelmed the London money
market after 1945, and it could not accommodate them all. Both colonies
had therefore begun to borrow from other sources even before independ-
ence. As noted above, the Federation of Rhodesia and Nyasaland had
borrowed heavily from the World Bank and other organizations, princi-
pally to pay for the Kariba Dam project. The East African territories had
also borrowed from the World Bank. Both were required to report semi-
annually to the World Bank on the status of their outstanding debts.40
Further, development resources outside the Empire expanded after
independence. In response to Cold War imperatives the Eisenhower
administration made significant increases in the amount and scope of US
foreign aid. Eisenhower’s foreign economic policy had shifted its aid prior-
ities away from Europe and military expenditure, and towards the Third
World and more broadly economic objectives.41 In the financial year fol-
lowing independence, Kenya received grant and loan disbursements total-
ling £16.8 million from the United States, Germany, and the United
Kingdom.42 Correspondence between the British government and officials
in Kenya in the years immediately preceding independence shows that
Kenya was counting on such external funds to support its development
expenditure. A letter from the Kenya Treasury to the Colonial Office in
June 1962 defended Kenya’s level of development spending, which the
British government was asking it to reduce, by arguing that substantial
funds were likely to be available from West Germany, the United Nations,
and the international financial organizations, among others.43
37
Ferguson and Schularick, ‘The Empire Effect’.
38
Obstfeld and Taylor, ‘Sovereign Risk, Credibility and the Gold Standard’.
39
Accominotti et al., ‘Spread of Empire’.
40
For more detail on the reports and colonies’ interaction with the World Bank, see
Indebtedness, Operational Correspondence, East Africa, 1952–71, WB IBRD/IDA 05-01
Records of the Africa Regional Office, East Africa (hereinafter WB IBRD/IDA 05-01);
193298B, 1575765F and 1575766F, and Indebtedness, WB IBRD/IDA 01-RN; 193423B,
1581014F.
41
For a detailed account of this shift, see Kaufman, Trade and Aid.
42
Wood and Vokes, ‘Aiding Development?’
43
J. H. Butter to A. N. Galsworthy, 11 June 1962, in TNA FCO 141/7049.
The United Kingdom’s share of Kenya’s post-independence develop-

ment aid was by far the largest, indicating that independence did not end
the transfer of funds from Britain.44 Officials in Kenya counted on con-
tinuing financial support from the British government even while explor-
ing other sources. An internal memorandum reviewing Kenya’s economic
position in 1961 noted that in the wake of the Mau Mau rebellion, Kenya
remained financially dependent on Britain and that this dependence was
likely to continue although Britain would expect Kenya to take on in-
creasing responsibility for recurrent spending. ‘While it is possible that
capital assistance may be forthcoming from sources not at present availa-
ble it is most unlikely that any outside source other than the metropolitan
power would be prepared to assist Kenya to balance her budget after In-
dependence on terms which would be consistent with the Territory’s sov-
ereignty.’45 For its part, the British government also acknowledged that it
would need to provide continuing financial support, though it attempted
to limit its commitment. A Colonial Office memorandum proposed to
notify the Kenya government that the British government would only fund
£6–6.5 million towards a development programme of £8–8.5 million.46
Despite taking a tough tone with the Kenya government, Britain was still
funding a large proportion of Kenya’s development expenditure even after
independence.
The range of other countries offering aid increased further in the
late 1960s and early 1970s. A 1970 internal World Bank memorandum
recounts a working lunch on technical assistance offered by Israel to East-
ern Africa and Latin America.47 A 1972 meeting of the Bank’s East Africa
Consultative Group on Kenya contained representatives from Canada,
Denmark, Finland, France, Germany, Italy, the Netherlands, Norway,
Sweden, the UK, and the US, as well as the International Monetary Fund,
the United Nations Development Programme and the African Develop-
ment Bank.48
Both countries also received aid from outside the Western world, taking
advantage of Cold War politics in which aid was a tool used by China and
44
Wood and Vokes, ‘Aiding Development?’
45
Minister for Finance and Development, ‘The Kenya Economy’, no date, in TNA
FCO 141/7049.
46
Colonial Office, ‘Kenya Development 1963/64’, 1963?, in TNA FCO 141/7049.
47
Memorandum, Bruce M. Cheek to Files, ‘Israeli Technical Assistance’, 21 July 1970;
Technical Assistance 1969 I; WB IBRD/IDA 05-01; 193303B, 1575861F.
48
Memorandum EA 72–8, The Secretary, World Bank, to Executive Directors and
others, 14 June 1972, enclosing Chairman’s ‘Report of Proceedings’ of the meeting on
Kenya of the Consultative Group for East Africa, 20–21 April 1972; East Africa—
Consultative Group 1972/74 I; WB IBRD/IDA 05-03 General Country Files of East and
South Africa; 202648B, 1411754F.
Russia as well as the United States and Britain to gain influence in the
former colonies. Like several other newly independent countries in Africa,
Zambia adopted an explicit policy of non-alignment. In 1967 Zambia and
Tanzania signed an agreement with China for a £100,000,000 loan for
construction of the Tanzam Railway which would provide an alternative
railway link to the one which ran through Southern Rhodesia.49 Kenya, in
contrast, generally tried to maintain its ties with the West, and as a result
‘enjoyed a quarter-century honeymoon with the donors’.50 However,
Kenya did receive a grant of £10 million from China in 1964/65.51
This proliferation of loans, grants and other aid to Kenya and Zambia
after independence was primarily the result of a combination of Cold
War influence and new thinking on the role of government in economic
development. If independence had come at a different time for these two
colonies (say, for example, in the 1920s), their access to external loans
and grants may have been curtailed. It may still be that former colonies
received less advantageous terms on loans taken independently than they
had with the backing of the British Treasury.52 The Kenya Finance Minis-
ter was particularly concerned about the potential conditions attached to
external loans and grants, noting that Commonwealth Assistance Loans
(which largely replaced CD&W grants after independence) as well as
American aid were tied to the purchase of British and American exports,
respectively.53 Further research is needed to determine the overall impact
of changing terms for aid. However, in the circumstances of the 1960s,
decolonization had a limited effect on colonies’ access to development
funds and may have even encouraged access to funding from a wider
variety of sources. This impression is supported by the rapid increases in
total expenditure undertaken by both countries following independence,
discussed in the next section of the chapter.
The end of colonial rule also placed strain on the economic and adminis-
trative relationships which had been built between neighbouring territories.
Administrative control from London made it possible to commit to regional
coordination agreements during the colonial period, despite opposition from
the African majority. As independence neared, the political costs of enforcing
these policies became too high, leading to the breakup of the Central African
Federation and the failure to establish a federation in East Africa.
49
Sklar, ‘Zambia’s Response’, p. 345.
50
Barkan, ‘Divergence and Convergence in Kenya and Tanzania’, p. 6.
51
International Monetary Fund, Surveys of African Economies, Vol. 2, p. 182.
52
A comparison of lending terms to developing countries both before and after inde-
pendence is beyond the scope of this project, but would no doubt yield insight into the
impact of decolonization on public finance in the Third World.
53
Minister for Finance, ‘Forecast Estimates 1963/64’, in TNA FCO 141/7049.
This issue was most potent in Zambia. When the Federation was dis-
solved in 1963, Northern Rhodesia and Nyasaland became independent
Zambia and Malawi, respectively. The long-standing connections of both
Zambia and Nyasaland to the south made the transition to independence
exceedingly difficult. Gifford argues that ‘Zambia and Malawi had to
build on the institutions of a dismantled federation—institutions which
had never been intended for and were not designed to support independ-
ent states’.54
A major challenge was maintaining the provision of public services in
the absence of the Federal superstructure which had provided them for
the past decade. Three of the inter-territorial services became interna-
tional agencies, namely the Central African Airways Corporation, the
Central African Power Corporation, and the Rhodesia Railways. They
were structured so that policy decisions could only be made with the
unanimous agreement of all three governments.55
The situation was exacerbated when Southern Rhodesia unilaterally
declared its independence from Britain as a minority-ruled state on 11
November 1965.56 This declaration made cooperation with the minority-
ruled regime exceedingly difficult from a diplomatic perspective. And yet
cooperation was necessary due to the fact that much of the infrastructure
upon which Northern Rhodesia relied to produce and export copper was
located in or depended on Southern Rhodesia to function. This included
the railways, which provided the only way of transporting exports. It also
included Zambia’s supply of electricity from the Kariba Dam power plant,
which had been planned as a long-term solution to the Copperbelt’s
energy problems. The cost of replacing common services was a major
concern for officials even prior to the dissolution of the Federation of
Rhodesia and Nyasaland. George Woods, then President of the World
Bank, sent a letter to the conference chairman offering the assistance of
the bank in negotiations. In it he noted that ‘the effective continuance of
the common public services, especially railways and electric power supply,
must be a matter of anxiety to all the territories for the sake of their own
economic well-being and future economic development’.57
The only replacement for the electricity from the Kariba Dam was coal,
for which Zambia had relied on the coal mines at Wankie in Southern
Rhodesia. When supply from Wankie was plentiful, there was little incen-
54
55
56
57
Letter, George D. Woods to R. A. Butler, Chairman, Victoria Falls Conference, 24
June 1963; Dissolution Negotiations I; WB IBRD/IDA 01-RN; 193425B, 1581131F.
tive to locate alternative supplies within Northern Rhodesia. But when

Ian Smith’s government restricted shipping capacity to Zambia, a short-
age of electricity forced copper producers to cut production by a third.58
Within a year of declaring independence, Southern Rhodesia closed its
railway to Zambia, which forced Zambia to invest in alternative routes of
transportation in and out of the country through Tanzania.59 Further,
UDI made it impossible for the services set up as independent agencies to
function. Once the Rhodesian regime was declared illegal, there could no
longer be a unanimous decision by any of them.60
The need to replace shipping routes, energy supplies, and alternative
sources for government stores led to rapidly increasing capital expendi-
ture from 1965 to 1968 and a sizeable government deficit by the end of
that period.61 Less than a year after UDI the Zambian government had
committed to expenditures of £31,000,000. By October 1968 it esti-
mated the net costs resulting from the emergency at just over £70,000,000.62
To put these totals into perspective, Zambia’s annual revenue in 1968 was
£112,845,000, making the expenditure on UDI equal to two-thirds of a
year’s total revenue. In addition to this expenditure, Zambia also received
aid from Britain after UDI. In February 1967, Britain agreed to contrib-
ute £13,850,000 towards the improvement of transport routes to the East
African coast. By that point it had already spent £10,000,000 on the
provision of a Royal Air Force fighter squadron, and the emergency airlift
of fuel into Zambia after supplies from Rhodesia had been cut off.63
The breakup of the Federation of Rhodesia and Nyasaland also influenced
the access of the newly independent countries to development funding. Ac-
cording to Gann, access to loan capital from overseas had been one justifica-
tion for the establishment of the Federation in the first place.64 The World
Bank’s interest in the dissolution negotiations was driven partly by the fact
that its outstanding loans for projects in Central Africa were guaranteed by
the Federation rather than any of its constituent territories. By 1962 the
federal government had guaranteed loans amounting to £63.9 million,
£46.6 of which was for loans made by the World Bank, the Colonial Devel-
opment Corporation, and the Colonial Development Finance Corpora-
tion.65 Dissolution meant that a new guarantee needed to be negotiated.66
58
International Monetary Fund, Surveys of African Economies, vol. 4, pp. 391–2.
59
60
61
IMF, Surveys of African Economies, vol. 4, pp. 411–12.
62
Sklar, ‘Zambia’s Response’, pp. 349, 354, n. 74.
63
Ibid., p. 350.
64
65
66
Memorandum, S. R. Cope to D. B. Pitblado, ‘The Federation of Rhodesia and Nyasaland’,
19 June 1963; Dissolution Negotiations I; WB IBRD/IDA 01-RN; 193425B, 1581131F.
In East Africa, anxieties were expressed even before the end of common
service provision in 1977. In 1966, the head of a World Bank economic
mission to the region noted that the replacement of the East African
shilling by three separate currencies managed by separate central banks
and supported by separate foreign exchange reserves would complicate the
operation of common services and possibly impede the operation of the
common market.67 The failure of the federation movement left the three
East African territories dependent on one another, but without any effective
superstructure to manage cooperation between the three governments.
I N T RO D U C I N G C A M PA I G N P RO M I S E S :
ELECTIONS AND FISCAL POLICY
A less direct but perhaps more influential fiscal effect of decolonization was
the transition to elected government. The failure of democracy in most
African countries in the decades since independence makes it difficult to
remember the optimism with which many (though not all) Africans ap-
proached the transition to elected government at independence, which
marked the first time that the head of state could be removed by voters.68
This gave voters greater bargaining power than they had under the colonial
administration, and allowed them to lobby for fiscal transfers, thus funda-
mentally altering the politics of taxation and government expenditure.
In the elections held in both countries prior to independence, African
nationalists promised the electorate increased economic benefits from
the transition to majority rule. The history of the public sector in Europe
and North America indicates that expanding the franchise to new con-
stituencies (whether distinguished by economic standing, class, race,
etc.) tends to alter the willingness of the electorate to fund particular
types of social spending. For example, where voting is restricted to those
holding substantial property, governments do not tend to fund mass
public education.69
Kenyan and Zambian evidence supports this theory. In both coun-
tries, spending on education and health services grew with the franchise
as independence neared.70 Cooper argues that colonial officials were
especially concerned about becoming liable for expensive new social
67
Memorandum, John C. de Wilde to Abdel El Emary, ‘Mission to East Africa: Back-
to-Office Report’, 28 December 1966; Economic Mission II; WB IBRD/IDA 05-01;
193298B, 1575770F.
68
Ogot, ‘The Decisive Years, 1956–63’, p. 51.
69
Lindert, Growing Public, p. 33.
70
In Kenya, this increase was dramatic enough that some worried it might actually create
a class of educated unemployed. See Hazlewood, The Economy of Kenya, pp. 139–40.
service commitments in the years preceding independence.71 After inde-

pendence, expanding the provision of social services was partly an at-
tempt by both governments to honour campaign promises to an
electorate which believed a majority-ruled regime would be more gener-
ous than the colonial administration. Figures 9.2 and 9.3 show total
increases in spending on social services in both countries in the five
years following independence.
Expenditure on education in particular was also motivated by the
notion that it would lead to economic growth. Todaro argues that ‘most
nations like Kenya have been led to believe or have wanted to believe that
it is the rapid quantitative expansion of educational opportunities which
holds the basic key to national development. The more education, the
more rapid the anticipated development.’ This conviction led a number
of developing countries to commit themselves to the goal of providing
universal primary education in the shortest possible time. According to
Todaro, ‘this quest has become a politically very sensitive but often eco-
nomically costly sacred cow’.72
Elections also set the stage for increased competition over resource dis-
tribution. As Schoenblum notes, ‘if individuals’ primary allegiances are to
communities other than that exemplified by the state, and if these are
communities with quite divergent interests, then it will not be surprising
that these communities of special interest will vie to be net gainers rather
than net losers’.73 Molteno goes further, writing that elections ‘created a
mechanism whereby politicians, in their striving for office, were forced to
recruit support from the population at large. Only at this stage did they
have to differentiate themselves in the eyes of the electorate; and only at
this stage did they have an interest in pointing out, playing upon and even
creating, new perceptions of social cleavages in the population.’74 These
cleavages could be between ethnic groups, the employed and unemployed,
the landed and the landless, among others.
Sectional conflict became a problem in both countries, and was often
largely to do with the distribution of government expenditure. Kenyatta’s
post-independence economic policy, which, as noted above, did not
emphasize redistribution, often failed to meet the expectations of groups
which had hoped to be ‘net gainers’ from the fiscal policies of the post-
independence government.75 This disappointment was manageable so
long as Kenyatta had sufficient resources to accommodate his key interest
71
Cooper, Decolonization and African Society, p. 394.
72
Todaro, ‘Education and National Economic Development in Kenya’, p. 269.
73
Schoenblum, ‘Taxation, the State and the Community’, p. 212.
74
Molteno, ‘Cleavage and Conflict in Zambian Politics’, pp. 63–4.
75
Ochieng, ‘Structural and Political Changes’, pp. 89–90.
£14
£12
£10
Millions
£8
£6
£4
£2
£0
1963/4 1964/5 1965/6 1966/7 1967/8 1968/9 1969/70
Education Health
Fig. 9.2. Kenya expenditure on social services, 1963–69 (1963 £)

Source: See Figure 9.1.
£16
£14
£12
£10
Millions
£8
£6
£4
£2
£0
1963/4 1964/5 1965/6 1967 1968 1969
Education Health
Fig. 9.3. Zambia expenditure on social services, 1963–69 (1962 £)

Source: See Figure 9.1.
groups, but would erupt into violence once Kenya’s economic perform-
ance had faltered.76 Zambia’s attempt to disengage from the south after
UDI, for example, exacerbated tensions among the Lozi and Tonga, who
felt they would be neglected by the government’s new geographic focus
(and resulting expenditure on infrastructure).77
76
Barkan, ‘Divergence and Convergence in Kenya and Tanzania’, pp. 15–16.
77
The collective result of these demands was dramatic increases in total

public expenditure in both countries. The transition to elected govern-
ment had increased pressure on post-independence governments for
expenditure, particularly on social services. This was in addition to extra
expenditure required by the end of regional integration agreements and
the loss of the hegemonic authority which had kept the regions surround-
ing both countries stable during the colonial period. Figure 9.4 shows the
increase in total expenditure in both countries in the first few years of
independence. Kenya’s expenditure nearly doubled between 1963 and
1969. Zambia’s increased even faster, peaking in 1966 as the country
coped with the fall-out from UDI. A small part of this expenditure was
the slow replacement of imperial defence services, but on the whole it is
unlikely that the loss of the ‘imperial subsidies’ made much of a differ-
ence. More important was the fact that post-independence governments
could no longer say ‘no’, at least not to all of the electorate, like colonial
governments had been able to do.
The primarily aim of colonial governments had been merely to main-
tain stability within their colonies, and some limited legitimacy in the
eyes of global powers. Post-independence states, by contrast, were trying
to build legitimacy in the eyes of their local constituents. This led both to
commit to rapidly increasing public expenditure, most notably on
education.
Predictably, given the persistent pattern in the fiscal histories of both
countries, this expansion in the public services left them vulnerable to
fiscal crises during the next downturn in the 1970s. The scale of the crises
both faced in later years suggests that territories which might have been
solvent as colonies were not self-sufficient as independent countries, par-
ticularly as they were without recourse to grants-in-aid during periods of
crisis. The Kenya finance minister pointed out the significance of this
shift in November 1962, a little over a year before Kenya became inde-
pendent. ‘In previous years it has been known that, provided all reason-
able measures to prune expenditure were taken, and all additional taxation
which could be levied without obvious damage to the economy was
imposed, the remaining gap would be covered by assistance from the Brit-
ish government.’78 This was not necessarily the case after independence,
and post-independence governments had to find other ways to cope with
demands for increased spending. The pressure for increased expenditure
resulting from elections may at least in part explain the advent of one-
78
Minister for Finance, ‘Forecast Estimates 1963/64’, in TNA FCO 141/7049.
£140
£120
£100
Millions
£80
£60
£40
£20
£0
1963 1964 1965 1966 1967 1968 1969
Kenya Zambia
Fig. 9.4. Total public expenditure, Kenya and Zambia, 1963–69 (constant £)
Source: See Figure 9.1
party states in both countries, which recaptured some of the colonial

state’s shield against the demands of special interest groups.
*****
The fiscal crises faced by independent states in Africa had direct parallels
in the fiscal consequences of the commodity price collapse after World
War One, and in the Great Depression. In their quest to become self-
sufficient, colonial states had built fiscal systems which allowed small
administrations with limited knowledge of their constituents to raise
revenue, but the compromises they had made to do this had left the
institutions they built extremely vulnerable to external economic condi-
tions. In other words, they prioritized immediate gains in revenue above
long-term fiscal stability.
The aims of colonial administrations were fundamentally different to
those of the independent states which followed. The political economy of
the British Empire as a whole was designed not to generate widespread
economic development in the dependent colonies, nor to extract resources
from them, but rather to maintain order at the lowest possible cost to
Britain. The policy of colonial self-sufficiency was adopted to serve this
purpose, but also created incentives which eventually led to the fiscal
instability inherited by post-independence governments.
The policy of colonial self-sufficiency had forced colonial administra-
tions in Africa to tackle a number of daunting challenges in raising suffi-
cient local revenue. How they did this shaped the structure and policies
of colonial governments for decades to come. The territories they gov-
erned were large, and few were able to produce the surplus necessary to
support the small but relatively expensive administrations build by colo-
nial officials. In the early years of colonial rule, the main goal of colonial
governments was to expand the fiscal base of their colonies as quickly as
possible, up to the point where they could pay for local spending using
local revenue. The fastest way for colonial administrations to do this was
to pour their limited resources into expanding transport infrastructure
and encouraging production of the few commodities that they could
export profitably. By such methods most colonies were able to pay for the
costs of their own administration out of local revenue before the begin-
ning of World War One.
Self-sufficiency allowed colonial administrations to tailor their budgets
to local needs, without the constraints imposed by the Treasury that the
bulk of new revenue be devoted to reducing British grants. Colonial gov-
ernments increased their spending on transport infrastructure and eco-
nomic services, remaining firmly focused on the goal of expanding export
production. In a world before the economic upheavals of the inter-war
period, colonial officials saw little wrong with a development strategy
which played to the colonies’ greater advantages in the production of raw
materials, which complemented the industrial production of the
metropole. While yielding quick results in terms of revenue, this strategy
also created colonial economies heavily dependent on the fate of a limited
range of exports. This economic structure has largely survived the colonial
period.
This dependence had severe consequences for the fiscal state in Africa,
both during the colonial period and after independence. From the first
trade disruptions of World War One, which affected customs revenues as
well as the ability of exporters to pay other taxes, colonial administrations
shifted their attention from achieving self-sufficiency to maintaining it.
For the remainder of the colonial period, the fiscal policies of British col-
onies can best be characterized as exercises in crisis management, in which
administrators attempted to insulate their budgets from sudden changes
in the prices of key exports. As far as possible, they avoided binding com-
mitments to future spending and prioritized building substantial reserves.
Any hope that resource constraints would no longer be a key influence in
colonial policy-making disappeared. Through the rest of the colonial
period, the consequences of any policy to colonial budgets would receive
first consideration by many colonial officials.
At the same time, however, the colonial state faced growing demands
to increase spending which ran counter to the inherent fiscal conserva-
tism of the self-sufficiency doctrine. As the incomes of export producers
fell, colonial governments had to find ways to mitigate the human costs
of the economic crisis in order to maintain the fragile peace they had
constructed in the early years of imperial rule. By the late 1930s the defi-
nition of colonial development, which had previously been restricted to
expanding infrastructure and economic services, had been expanded to
include social services like education, healthcare, and unemployment
relief. The rhetoric of colonial development began to emphasize the need
for direct state action to raise living standards among the African
majority.
These changes in colonial development did not mark a major change in
the central aim of colonial rule, namely to maintain order in the colonies
at the lowest possible cost. Rather, they reflected the fact that what was
needed to achieve this goal had changed. Living standards in the colonies
needed to be improved in order to maintain stability amidst growing
unrest not only in Africa but also through the dependent territories in the
Caribbean and Middle East. Just as expectations of the state were chan-
ging in developed economies, where the size of the public sector had ex-
panded dramatically, colonial subjects also expected more of their
governments.
Colonial administrations struggled to keep up with these demands. The
failings of the fiscal systems they had established became apparent after
World War Two, when despite initial expansions in revenue, changing
global economic conditions caused rapid declines in revenue collections.
This volatility complicated the development planning efforts undertaken
by colonial administrations after 1945, and often prevented colonial
officials from increasing such spending to the degree they intended. Social
spending in particular was the first to be cut in colonial development plans
after the end of World War Two, because it promised little in the way of
immediate fiscal return but required commitments to future spending. In-
creases in metropolitan spending on the Empire did little to resolve this
dilemma. Grants from London never represented a large share of colonial
development expenditure, and were rarely as generous as anticipated. Mean-
while, outbreaks of unrest continued, sometimes with significant fiscal im-
plications, as in the case of the Emergency in Kenya.
Efforts to resolve these fiscal tensions were central to the two major
constitutional changes of the late colonial period. The first was the increas-
ing delegation of fiscal authority and responsibility to local governments.
The aim of such devolution was to deflect demands for expanded public
services to local governments rather than the central administration.
Colonial officials also believed that local governments would be more
successful in raising taxes than the central administration. Whether these
changes resulted in an overall increase in social spending would require
further research into the little-studied area of local government finance
during the colonial period. However, the vast differences in the resources
available to local authorities in different regions likely resulted in signifi-
cant inequalities of service provision, which undoubtedly exacerbated
post-independence disputes about the division of public resources be-
tween different regions and interest groups.
The second constitutional change was the encouragement of closer
union by colonies not thought capable of supporting themselves as inde-
pendent states. Proponents believed that closer union would generate
economies of scale in the provision of public services, a tool which had
already been used in colonial governance, and create more diverse econo-
mies less vulnerable to external shocks. Opponents doubted both the eco-
nomic and fiscal benefits of such schemes, and in the end political
opposition amongst the African majority led to their demise before their
fiscal benefits could be assessed. Any move towards regional integration
has winners and losers, and the disappointing (for proponents) results of
these efforts illustrated plainly the economic nationalism which had
emerged in individual colonies during the earlier decades of imperial rule.
It was also the result of widespread suspicion that the closer union schemes
in East and Central Africa were designed to serve settler interests.
The same economic nationalism contributed to the campaigns for
independence, formed of loose coalitions of varied interests within the
colonies. What these different groups shared was the hope that national
independence would rectify the many wrongs of the colonial period, and
ensure a fairer distribution of public resources. With the transfer of power
came widespread optimism that independence would allow for the provi-
sion of services, particularly education, at a more generous level than
colonial authorities had allowed. However, these hopes were dashed as the
tax systems established by colonial governments were unable to cope with
the demands of democracy, and the political systems of many independ-
ent African countries descended into single-party autocracy and military
rule.
How typical were these results of the British Empire as a whole? Fur-
ther research would be required to provide a definitive answer to this
question. However, it is possible to speculate on potential sources of dif-
ference between Africa and other regions. African colonies were among
the poorest of Britain’s dependent territories, and therefore it would be
reasonable to assume that revenue constraints would be more influential
there than elsewhere.
They were also the newest of the imperial government’s territorial
acquisitions. In the end, the lifespan of most colonial administrations in
Africa, at around seventy years, was not much more than that of an indi-
vidual colonial officer. The period of colonial rule in Africa was also a
particularly turbulent one, encompassing two world wars and a series of

economic crises. Most colonial administrations in Africa had barely
become self-sufficient when the first of these crises hit. Grier has argued
that the duration of colonial rule was an important determinant of later
development outcomes: colonies held for longer periods tended to per-
form better in the long run.79 Further research would reveal the extent to
which older colonial administrations in Asia and the Americas were better
able to weather the economic storms of the first half of the twentieth
century.
Determining the extent to which Africa’s experience mirrors that of the
rest of the Empire may provide some clue as to why colonies in different
regions have had such widely varying fates since independence. The pros-
perity of some former colonies has long been a difficulty for those seeking
to blame colonial extractions for post-independence poverty. A more de-
tailed look at the implications of self-sufficiency policy across the Empire
may help explain this diversity.
79
Grier, ‘Colonial Legacies and Economic Growth’.
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Index
Acemoglu, D. 11, 93 Colonial Development Act (1929) 65,
Anderson, D. 58, 71, 75, 83, 139, 146, 87, 129
180, 194, 200, 203 Colonial Development and Welfare Act
Austin, G. 4, 11, 27–8, 68 (1940) 142, 157
Colonial Development
Bates, R. 41, 83–4, 104 Corporation 237
Bechuanaland 29, 48 expenditure 154–5
Beresford-Stooke, G. 143 resource constraints 145, 157–8, 232
Berlin Act of 1885 20–1, 43, 78 colonial loans
Boer War 24 British guarantee 40, 232–3
Bourdillon, Sir Bernard 37, 129, 183 development 142, 145–7
Buxton, Clarence 140 Northern Rhodesia 154
servicing 205
Cabot, John 19 Uganda Railway loan 34–6, 142
Cain, P. J. 3, 20–1, 33–4, 54, 85, 87, Colonial Office
110, 223 British aid to Kenya during Mau Mau
Cape Colony 3, 19, 24; see also South 201, 204, 229
Africa comparison with chartered company
Central African Federation rule 39–40, 130
fiscal structure 205–6, 211, 214–16 development policy 143, 145, 232–4
opposition to 218–20 policy on federation 210, 212, 221–2
origins 193, 207–10 policy on government purchasing 89
political Structure 210–11 policy on local administration 181–2
Chamberlain, Joseph 28, 34 policy on Northern Rhodesia mineral
chartered companies royalties 198
British South Africa Company 22–3, relationship with colonial
29, 39, 49, 51, 101–3, 197–9 administrations 25, 79, 113
Dutch East India Company 19 Congo Basin treaties 43– 4, 78–9, 88;
East India Company 19–20 see also Berlin Act of 1885
Hudson Bay Company 19 copper
Imperial British East Africa coin 49
Company 22 contribution to Central African
Royal Niger Company 21–2 Federation revenue 206, 214–16,
China 234–5 219
Chipungu, S. N. 183, 188–9 contribution to Northern Rhodesia
Cholmondeley, Hugh, Lord revenue 6, 77, 99–100, 124, 196,
Delamere 103– 4 198–9
cocoa prices 7, 68–9, 71–2, 124,
contribution to revenue 44–5 154, 205
exports 67 production during World War II 150,
hold-up 126 196–7
marketing 81, 83 rights in Northern Rhodesia 198
prices 70 royalties 101
production 68–70 taxation of 99–100, 124
coffee 67, 69, 82, 200 copper mines
Cold War 233–5 closure in the 1930s 116
colonial development as consumers 80
before 1914 34 infrastructure needs 209, 236–7
changes from the 1930s 123, 128–30, labour 105, 120, 137
141–3, 232, 244 social services 144, 153, 215
268 Index
Copperbelt riots factor endowments 4, 26–9
1935 122–3, 126, 138 federation
1940 143 debates 192–3, 206–7, 210, 215, 222
Coryndon, Robert 24, 29, 51, 53 Dominions 192
as Administrator of Northern West Indies 207, 222–3
Rhodesia 24, 29, 51 Federation of Rhodesia and Nyasaland, see
as Governor of Kenya 165 Central African Federation
Crown Agents for the Colonies 89–90 Feinstein, C. H. xix, 225
customs tariffs, see tariffs Frankel, S. H. 18
Frankema, E. 4, 35–6, 50
Davis, L. E. 26, 50, 63, 228, 232
decolonization Galbraith, J.K. 142, 144
costs and benefits 225–7, 229, 235 Gambia
historiography boundaries 5
origins 162, 238 financial position 5–7, 33
process 230 taxation 44–5, 47–8, 64
regional integration 193, 223 Gladstone, William Ewart 33, 41
Dominions 11, 42, 50, 85–7, 91, 192 Gold Coast
direct tax 47–8
East African Common Services expenditure 140, 157–8
Organization 217–18, 220 export production 67, 69–70; see also
East African High Commission 193, 200, cocoa
217–18, 221–2 financial position 5–7, 32–3, 75–6, 93
East African Protectorate, see Kenya local government finance 190
education, see expenditure marketing boards 81, 83
Egypt 27, 74 opposition to colonial policy 25, 126
Eliot, Sir Charles 57, 103 revenue 44–5, 64
excise taxes 44, 47, 80, 194–5, 202 Goldschied, Rudolph 2, 32, 59
expenditure Great Depression
administrative 9–10, 35, 45, 105, 133 in Africa 73
allocation 36, 59, 93–4, 128–35, expenditure 134–5
148–58 fiscal effects 6, 12, 77, 90, 100, 125
attitudes toward 105, 128–30 nationalism 109, 126
Britain 3, 24, 32–3, 37–8 policy responses 81, 128, 130,
chartered company 39 133, 142
defence 20, 54–5, 230–2 in the United States 73
development 149–58, 199, 206 Guinness, Walter (Lord Moyne) 50, 79,
federation 207, 216 99, 108
Imperial 142, 203, 234; see also colonial
development Hailey, W. M. H. (Lord Hailey)
infrastructure 8, 25, 39, 132–3 African Survey 47, 110, 128, 166, 168
local government 173–7, 185–9 general observations 145
Mau Mau 200–5, 228–9 Native Administration and Political
New Zealand 35 Development 29, 126, 171–2, 190
on public sector stores 90 Hardinge, Sir Arthur 102
post-independence 226–7, 230–2, Hay, Josselyn Victor (Earl of Erroll) 107
235–42 health care, see expenditure
research 26–7 Herodotus 17
settler influence 138–40 Hobson, J. A. 4–5
social services 11, 34–5, 131–2, 140–1, Hong Kong 42, 147
144–8 Hopkins, A. G. 20, 33–4, 41, 43, 68,
total 5–6, 31, 34–5, 66–7, 74, 105, 87, 91
133, 162, 193–6, 206 house tax, see hut and poll tax
Treasury control 26–7, 36–7 hut and poll tax
unemployment relief 136–8 evasion 95, 112–14
export taxes 45, 58 exemptions 112, 115–16
Index 269
introduction 29, 47, 56–8 exports 69–71, 200
rates 51, 54, 94–5, 97, 105, 111–12, financial position 2, 5–6, 33, 64, 75–6,
115, 117–20 194–5, 228–9
revenue 8, 48–51, 94, 96–8, 105, foreign aid 233–5
110–12, 124, 140–1, 194–5 grants-in-aid 55, 228–9, 232
revolts and protest 54, 140–1 hut and poll tax 47–52, 56–8, 97–8,
share granted to local governments 172 109–17, 120
Huttenback, R. A., see Davis, L. E. Imperial British East Africa
Company 22
Imperial Economic Conference (1923) 86 income tax 98–100, 107
income tax local government 165–6, 169–70,
Central African Federation 211 172–81, 183–5, 188–91
colonial 145 marketing boards 81–2
East African High Commission 200 Mau Mau 201–5, 228–9, 231–2,
Gold Coast 47 234, 244
Kenya 79, 92, 98–9, 104–7, 124 post-independence 230–1, 233–5,
Northern Rhodesia 50–1, 99–102, 238–42
104–5 pre-colonial 29
Southern Rhodesia 50, 110 regional integration 45, 79, 200, 207,
India 212–14, 218, 220–1
British East India Company 19–21 revenue 7, 44, 75, 94–6
education 164 Somali tax collection 56–8
tariff policy 42–3, 78 tariffs 43, 78–80
textile exports 88 trade 88
indirect rule Kenyatta, Jomo 239; see also Kenya,
challenges to 190 post-independence
inter-war revival 164–5 Kucynzki, R. R. 52–3, 104
Kenya 165
Lord Lugard 28 Lewanika, see Barotseland
Northern Rhodesia 167, 170 Lewis, W. Arthur 73, 141, 145, 155, 158
origins 9, 31–2 London Chamber of Commerce 21
variations between colonies 29 Louis, W. R. 3, 24, 162, 182, 192, 224–5
infrastructure 10, 21, 26, 34–5, 65–6, Lugard, F. D. (Lord Lugard)
105, 128, 157–8, 209, 243–4 indirect rule 28–9, 164
railways 8, 34, 37 local treasuries 169
revenue 7–8 regional integration 192
see also expenditure and economic taxation 8
development Lusaka
construction 77, 136
Kariba Dam 216–7 mining company headquarters 199
Kaunda, Kenneth 121 proximity to copper mines 77
Kavirondo Taxpayers’ Welfare settlers 103
Association 121, 140–1
Kennedy, Paul vii Machiavelli, Niccolo 17
Kenya Macmillan, Harold 199, 225
African agriculture 83–4, 138–9 Macmillan, W. M. 127–8, 145
African protest 120–1 marketing boards
development planning 142–3, 146–51, establishment 7, 81–3, 92
195–6, 203–4 post-independence 84
division of tax burden 97–9, 106–8, revenue 83–4
110–11 McDonald, Malcolm 141, 145
economic prospects 22, 66–7, 78, 194 McGregor Ross, W. 56, 109
European settlers 25, 43, 83, 92–3, missionaries 38, 54, 139, 143, 150, 184
102–5, 124, 138–40, 193, 212 Monckton Commission 218; see also
expenditure 34–40, 75–6, 131–2, 134, Central African Federation
148–52, 202–3, 227–9, 238–42 Mosley, P. 10, 71, 82–4, 93, 132, 138–40
270 Index
Morgan, D. 122, 127, 129, 141 Nyasaland
Moyne report, see Guinness, Walter (Lord administration 29
Moyne) decolonization 236
Munro, J. F. 22, 25, 34, 65, 68, 73 development 35
end of BSA Company rule 23
New Deal 126, 128, 130, 142, 144–5, expenditure 6, 158
157–8 federation 193, 207–11, 215–16, 220
Nigeria financial position 5–7, 33, 40,
Bourdillon, Sir Bernard 37, 129 75–6, 93
debt 77 local government 171, 190
expenditure 67, 158 revenue 6–7, 44, 47, 55, 64
federation 192, 207 tax burden 50
financial position 6–7, 32–3, 75–6, 93 Treasury control 36
indirect rule 28–9
local government finance 183, 190 Olson, M. 104
marketing boards 81, 83 Ottawa Conference
prosecutions for tax offences 113 of 1894 86
Southern Nigeria riots 122 n. 112 of 1932 86–7
taxation 8, 25, 48–50, 58, 64 Ottawa Agreements (1932) 86
Northern Rhodesia Owen, W. E. (Archdeacon), see Kavirondo
administration 115–16 Taxpayers’ Welfare Society
African protest 120–3, 143–4; see also
Copperbelt riots pensions 34, 128, 131–3, 194
agriculture 80 Perham, Margery 9, 28, 164, 169
Barotseland 29, 48, 187 Pim, Sir Alan
BSA Company rule 22–3, 39; see also general observations 140, 167
chartered companies Kenya Financial Commission 45,
development planning 150, 152–8 79–80, 99, 106, 111–12, 115–16,
double taxation relief 101, 199 122, 139
economic prospects 45 Northern Rhodesia Financial
European settlers 102–5 Commission 46–7, 71–2, 100, 115,
expenditure 39, 105, 130–3, 135, 120, 168
152–8, 206 population
federation 193, 207–11, 215–16, density 18, 27–8, 35; see also factor
218–20, 236; see also Central African endowments
Federation estimates 52–3, 113, 119, 155, 176
financial position 2, 5–7, 72, 130, Prain, Sir Ronald 197, 205, 209,
205–6 214–16, 219
hut and poll tax 47–9, 51, 53–4, 56,
110–12, 115–16, 118–20, 181 Rhodes, Cecil 22
income tax 99–102 Roman Empire 17
local government 166–8, 170–4, 176, Roosevelt, Franklin Delano 126, 142, 144
178–9, 181–3, 186–9
marketing controls 82, 84 Schumpeter, J. A. 2, 59, 224
mineral royalties 23, 101, 197–8, 208 Scramble for Africa 18, 20–1, 30, 43, 47
mining 68–71, 77, 136, 196–7, Sierra Leone
205, 215 financial position 5–7, 32–3, 64
post-independence, see Zambia taxation 47–8, 190
purchase of public sector stores 89–90 tax revolt 54
regional integration 45–7 South Africa
revenue 6–7, 46–7, 71–2, 94, 96, 108, expenditure 139
110–11, 196–9, 205–6 Imperial preference 86
tariffs 44–5 investment 34
tax evasion 113–14 links to the Rhodesias 45–6, 89,
Treasury control 77 103, 136
unemployment 136–8 mining 23
Index 271
protectionism 80 Uganda
regional integration 192 establishment of colonial rule 22, 40
taxation 47 financial position 5–7, 33–4,
Southern Rhodesia 75–6, 93
end of BSA Company rule 23 local government 190
European settlers 25, 103, 218 prosecutions for tax offenses 113
federation 193, 207–11, 216, relations with East African
218–20, 222 territories 80, 106, 200, 202, 207,
income tax 50 212–14, 218–20
marketing controls 82, 84 tariffs 44–5, 79, 200, 202
regional integration 45–6 taxation 8, 47–8, 64
revenue 8, 110 Uganda Rifles 230
tariffs 45–6, 80 Uganda Railway 36, 39, 142
Unilateral Declaration of Independence unemployment
(UDI) 236–7 benefits and insurance 128, 131–2,
Straits Settlements 42, 88 142, 244
Swynnerton Plan 203 Britain 65, 129
Great Depression 68, 133
Tanganyika Kenya 138
administration 29 Northern Rhodesia 116, 136–8
East African regional organizations post-independence 226
207, 212–14, 218, 220 Unilateral Declaration of Independence
tariffs 45, 79, 200 (UDI), see Southern Rhodesia
financial position 6–7 United States
local government revenue 190 Chamber of Commerce 85
marketing boards 81 Office of Strategic Services 43–4
revenue 47, 202 Tariff Commission 42–3, 85–6
tax prosecutions 113
Tanzania 220–1, 229–30, 235, 237 Vasey, E. 201–2, 204, 228–9
tariffs
administration 45–6, 52 Welensky, Sir Roy 208
colonial tariff regimes 42–3 Wheare, K. C. 206–7
Congo Basin treaties 43, 78–9 Woods, Wilfrid 147
and imperial economic policy 77, World Bank 209, 216–17, 233–8
84–8 World War One
Imperial preference 65, 84–6 economic effects 63, 78, 242
protectionist tariffs 7, 78–81, 212 fiscal effects on colonies 59, 97, 242
regional integration 45–6, 200 reallocation of colonial territory 24
revenue 44–5, 63–4, role of colonies in war effort 228
68, 92, 94, 99–100 soldier settler scheme in Kenya 104
tax revolts 54–5, 95, 113 World War Two
Tiebout, Charles 27 effects on colonial spending 130, 244
Treasury fiscal effects on colonies 193–4
colonial development 128, inflation xix
145, 232 nationalist movements in the
colonial loans 40, 235 colonies 224
costs and benefits of empire 2 production of strategic goods 150
Mau Mau 201–4, 228–9; see also
Kenya; expenditure Zambia
Northern Rhodesia mineral decolonization 219, 226–7, 229–31
royalties 197–8 expenditure 240–2
self-sufficiency policy 3–4, 25–6, 32, foreign aid 235
36–7, 243 humanism 191
Treasury control 26, 36–7, 40, 66, impact of UDI 236–7; see also
77, 227 Southern Rhodesia
Troughton, J. F. G. 185 marketing board 84

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TA X I N G C O L O N I A L A F R I C A

Outside Oxford, a wide range of people have read and commented on

1. An Introduction to the Problem of Colonial Taxation 1

1.1 Exports and public expenditure in African colonies, 1911 5

3.1 Map of the Congo Basin region 44

guaranteed by the British government, the International Bank for

structure characteristic of many African countries today. Colonial ﬁscal

broad section of the population. The structure and eﬃciency of these

Fig. 1.1. Exports and public expenditure in African colonies, 1911

Fig. 1.2. Revenue per capita in selected African colonies, 1925

Unfortunately, the revenue from such taxes depended on commodity

Sierra Leone Export

Fig. 1.3. Revenue by source for selected African colonies, 1925

of Africans and European settlers to total tax revenue became an increas-

be more productive were governed more intensively, and the experience of

THE LEGACIES OF BRITISH IMPERIALISM

Interest in British colonial Africa has enjoyed a resurgence in recent dec-

that local diﬀerences in colonial rule can explain diﬀerences in economic

OUTLINE OF THE BOOK

twentieth centuries had a greater technological advantage, they faced the

This chapter outlines the challenges faced by British administrators in

tors was to capture as much of the international trade generated through

Local contributions to the costs of colonial governance had existed almost

Colonies with continuing military signiﬁcance like Malta, Bermuda, and

The failure of chartered companies across the Empire to mobilize suﬃ-

suited to the North American climate favoured the development of small

Under a system of indirect rule, the structure of the colonial adminis-

The ﬁscal challenges faced by early colonial administrators in Africa were

ministrations. Another was the reliance of colonial economies on a limited

THE DECADE OF DEFICITS, 19001910

Fig. 3.1. Budget position of British colonies in Africa, 1901–10

into Kenya’s development prospects in 1919 argued that the colony

Other Economic services Social services

Infrastructure Administration Military and police

Fig. 3.2. Public expenditure in Kenya, 1901–10

However, the salaries of colonial administrators were very high, even by

colonies and in Britain, therefore, it is safe to say that Victorian central

Map 3.1. Map of the Congo Basin region

palm products and cocoa largely funded colonial governments. In Nigeria,

materials.43 Liquor and tobacco were generally subject to higher special

1929 £151,629 £70,113

Source: Pim and Milligan, Report on Northern Rhodesia, p. 272.

This shared timeline masks considerable local variation in who was

similar system in some areas.58 Colonial taxation in such regions became

Tax burdens also diﬀered substantially between territories. There have

lonial administrations in Africa had accurate population data for their

failure of the mining industry to expand also aﬀected agricultural produ-

support military expenses. It was, for example, largely due to unantici-

sented particular problems for colonial administrators. They had little

By the outbreak of World War One, the ﬁscal systems of individual

Gambia £127,950 £81,160 63

revenue for newly self-suﬃcient colonial administrations. Table 4.1 shows

inter-war period, often dubbed a period of ‘deglobalization’. While po-

nial and metropolitan governments, between the various producers of the

COLONIAL ECONOMIES IN CRISIS, 191438

The early years of colonial rule were a transformative period in Africa’s

colonial administrators; Rimmer argues that the contribution to the

in copper prices as a result.21 Equally, the fortunes of agricultural producers

Fig. 4.1. Export price of cocoa, 1910–37 (1937 = 100)

Fig. 4.2. Copper prices on the London Metal Exchange

by large multinational corporations the economic crises of the inter-war

MANAGING THE CRISIS: COLONIAL FISCAL

The economic consequences of commodity price volatility have remained