Colonial Economy | History Form Three

Colonial economy refers to the system of production and consumption which were introduced in the colonies by the colonialists in order to fulfill their economic demands such as raw materials, markets, area for investment and areas for settlement.

Objectives of colonial economy

1.   To provide raw materials

Those materials were both agricultural products and minerals to the factories of the European countries. Examples of agricultural products were cotton, coffee, sisal, pyrethrum, tea, cocoa, and palm oil.

2.   Colonies were expected to import manufactured goods

Example of those goods were like clothes, shoes, blankets, and utensils from Europe.

3.   Colonized people were expected to provide cheap labor

This cheap labor was for the benefit of colonial masters.

4.   Colonized people were expected to raise revenues

Revenues could support administrative costs of the colony.

The Tactics used to Establish Colonial Economy

1.   Creative
Colonial rulers introduced new things in Africa such as:
The introduction of a cash economy, exchange took place through cash.
Introduction of land alienation where European took fertile land belonging to Africans.
Colonialists introduced large-scale farms e.g. tea plantations and settler farms in Africa.
Africans were forced to pay tax in cash to the colonial government.
It went together with the construction of infrastructure for the benefit of colonial powers.
Africans were forced to work in colonial projects.
2.   Destructive
Colonialism destroyed African local industries in order to gain market and laborers.
Colonial governments tended to destroy African culture e.g. initiation ceremony. This was done to obtain cheap labor.
3.   Preservative
Colonial governments preserved peasant economy in some areas e.g. in Uganda, West Africa etc.
Also, they preserved Africans tools of production like, hand hoe, panga and axes.

Sectors of Colonial Economy

Colonial economy had various sectors, those sectors were: agriculture, trade, mining, transport and communication and industry.


Colonial agriculture was based on the production of cash crops to be exported to Europe to feed their home industries.

Features of colonial agriculture

1.   It had three forms
Those forms were:
a. Settler agriculture
Settler agriculture was agriculture which was conducted by the white farmers. Those farmers were encouraged by colonial governments to come and establish bigger farms for production of cash crops. In East Africa, this form of agriculture took place in Kenya.
b. Peasant agriculture
Peasant agriculture was cultivation of cash crops by Africans around their homestead. In East Africa, this form of agriculture took place in Uganda.
c. Plantation agriculture
Plantation agriculture was production of cash crops in big plantations which were owned by capitalists who lived in Europe but they sent managers to supervise production in the colonies. In East Africa, this form of agriculture took place in Tanganyika.
2.   Taxation was imposed by colonial government
Taxation was imposed so as to force people to produce or cultivate cash crops.
3.   Peasant agriculture were introduced on land unit which were very small
Also, farmers owned their land privately.
4.   Plantation agriculture had large farms
Those large estates were created through land alienation.
5.   Production of cash crops was mainly for export to Europe
The crops were taken abroad to feed European industries.
6.   Colonial agriculture was monoculture
They specialized in production of single crops. For example, in Tanganyika, they specialized in production of sisal.

Impact of colonial agriculture

1.   It provided raw materials like coffee, cotton tea and tobacco
Raw materials used to feed European Industries.
2.   It provided food to the whites population and Africans
Food used to feed European administrators, traders, missioneries etc. example of food crops produced were banana and rice.
3.   It enabled the Europeans to get cheap labors
Cheap labour were inform of forced or migrant labour. They were paid low wages so it was easy to run agriculture.
4.   Enabled Europeans to exploit Africans
Africans were forced to pay tax. The tax enabled the colonial regimes to run the government.
5.   Agriculture stimulated constructions of different infrastructures
Different infrastructures like, roads and railway were constructed because of agriculture as crops were to be carried from production area to the coast for exportation.
6.   It caused hunger
Africans concentrated on production of cash crops hence they were lacking food crops as a result hunger attacked them.


The colonial government introduced processing industries in some of the areas. These processing industries were established in areas with cash crop production. Colonial governments tended to destroy local industries in Africa in order to introduce these processing industries.
Types of industries which existed during the colonial economy were processing industries.
Processing industries were constructed in order to reduce the bulkiness or the weight of raw materials such as crops and minerals before they were exported to Europe.
Many import substitution industries were constructed after the Second World War. Example of those industries were:
-      Tanganyika Packers LTD, this was a meat factory in Dar es Salaam.
-      The Dar es Salaam Brewery, this was established since 1924.
-      The Tanganyika Planting Co. (TPC), this was started in Arusha to produce Sugar.


Mining was the sector which dealt with extraction of minerals such as gold, copper, diamond and salt.
There were a number of corporations which were established for mining, they included:
-      Kironda Goldminen Gesellschaft, owned and operated a gold mine at Sekenke on the Iramba plateus during the German rule.
-      Zentralafirkanische Seengesellschaft proced salt in Uvinza near Lake Tanganyika.
-      Wiliamson Diamond Limited was formed in 1940 at Mwadui in Shinyanga region by a Canadian geologist Dr. J.T. Williamson.
-      Tangold mining company which mined gold at Kiabakari near Musoma and in Geita near Mwanza.
The colonial government supported mining sector by:
-      Lending money to the operations of mining activities.
-      Forcing people to work in the mines.
-      Land alienation, where by Africans lost their land for mining activities.


Trade in East Africa was in the hands of Asians from India. They supplied imported manufactured goods to remote areas and exported peasant crops. In Tanganyika they formed Karimjee and Jivanjee trading companies.
Trade helped European colonial governments to gain raw materials from Africa like crops and minerals. Europeans obtained market for their manufactured goods from Europe.

Transport and communication

In order to develop economic activities in Africa, colonial governments built infrastructure like roads, railways and houses.
Roads and railways were built from the interior all the way to the coast to make exportation and importation of goods easy.
There were number of railway which were constructed. The Germans firstly built Tanga line in 1893 and reached Mombo in 1905. It was extended to Moshi in 1912, served the settlers in Usambara, the plantations owners and African peasants in Kilimanjaro. They also constructed the central line from Dar es Salaam in 1905 to Morogoro in 1907. The line reached Tabora in 1912 and Kigoma in 1914. It was extended by the British after the First World War form Tabora to Mwanza by 1928.

Role of infrastructure

1. Used to carry raw materials from the interior ready for export.
2. Used to carry migrant labors to areas of production e.g. Kigoma – Dar es Salaam railway was built for that purpose.
3. Used to carry administrators and military troops from one area to another.
4. Used to transfer manufactured goods from the harbor to the interior.
5. Used to carry missionaries.

Colonial Labour

Colonial labour were Africans who were working in different sectors of colonial economy.

Tactics Used to Get Labour

1. Introduction of forced labour
Colonial governments used coercive force like army and police to force Africans to work in colonial economies. In 1944 Tanganyika forced about 12,000 laborers to work on sisal plantations.
2. Europeans imported manufactured goods in Africa
Those goods were such as clothes, bicycles. They were sold for cash, Africans were required to work to buy such products.
3. Introduction of tax in form of cash
Africans were required to work in colonial economies to earn money to pay tax.
4. Introduction of laws and ordinance
e.g. the “Kipande” system in Kenya where Africans were required to have an identity card showing their place of occupation. In Tanganyika there was a Masters and Native Servants Act of 1906.
5. Introduction of land alienation
Africans were removed from their fertile areas. This forced them to work in plantation and settler farms to earn money. E.g, Kenya and Zimbabwe.
6. Colonial governments introduced rationalization
Some areas were kept special for provision of labour e.g. Kigoma and Rukwa. This helped them to get labor whenever they needed.

Types of Colonial Labour

1.   Migrant labour
This were unskilled workers who move about systematically from one region to another. In Tanganyika, many laborers were moving from Kigoma to Morogoro and Tanga.
2.   Forced labour
These were labour who were forced to work through the use of violence or intimidation.
3.   Communal labour
This is when a community comes together to achieve a goal.
4.   Family labour
This is when a family comes together to achieve a goal.
5.   Contract labour
Refers to workers who are hired for a specific task and a finite period. Example of those labour were, messengers, teacher’s clerks and drivers.

Impact of establishment of colonial labour to African societies

1.   Many African lost their lives
They lost their lives in the process of working for the colonial government. Many lost their lives in mining and railway construction.
2.   It helped Africans to acquire different skills
Skills acquired were like: gardening, driving, teaching and many other skills.
3.   Colonial labour caused many Africans to become landless
This was because of land alienation introduced by the colonial government.
4.   It united Africans
Africans united together to go against exploitation done by the colonial government. They formed different trade unions to demand their rights.

Revision Questions

1.   Outline five roles of the constructed means of transport during colonial period.
2.   Briefly explain the pattern of colonial infrastructures in mainland Tanzania and explain how it facilitated exploitation.
3.   How effective was the building of the Uganda railway in the colonization of both Uganda and Kenya by the British?
4.   Identify six factors which determined the variation of agricultural systems during the colonial period.
5.   Analyse six tactics used by the colonialists to establish colonial economy in Africa.
6.   “Migrant labourers were very useful to the capitalists during colonial economy in Africa.” Substantiate this statement by giving six points.
7.   With examples show how the establishment of colonial economy affected the African societies. (Give six points).
8.   The type of colonial agriculture which predominated in Kenya was
A plantation. B peasant. C co-operative. D settler. E pastoralism.
9.   Outline five tactics used to establish the colonial economy in Africa.
10.               Assess six main features of colonial trade and commerce in Africa.
11.               The law that demanded the Africans to carry a labour card ‘Kipande’ aimed at ensuring that.
A the European colony is exploited effectively. B there is effective occupation of the colony. C the Africans should be allowed to grow cash crops. D the welfare of the Africans were taken care of. E the white farmers got a cheap supply of labour.
12.               How was the migrant labour beneficial to the capitalists during the colonial period? Limit your response to six points.
13.               Discuss the methods used in the establishment of colonial economy in East Africa.