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The European powers were motivated by a number of factors to acquire colonies in Africa and other parts of the World during the 19th century. These factors managed from nationalism, the need for cheap industrial raw materials, and the need for markets for their manufactured goods as well as cheap laborers.

Hand in hand with the establishment of various administrative institutions and structures for the administration of colonies, the colonial powers also setup a colonial economy to facilitate the exploitation of the natural resources of their colonies.

Colonial economy refers to the economic systems of goods and services established during the colonial era. It comprised activities such as trade, manufacturing, agriculture, mining, transportation and communication as well as the establishment of financial institutions.

The colonialists introduced these kinds of economies in order to fulfill their economic demands such as raw materials, cheap labor, areas for investments and areas for settlement.

Characteristics of Colonial Economy

1. It was export-import oriented colonial economy specialized in production of raw materials for the metropolitan industries and importation of manufactured goods in the colonies.

2. It was based on the exploitation of African resources such as man power minerals and so on.

3. It was based on monoculture system of production.

4. They specialized in the production of major commodities such as Mauritius - sugarcane and Ghana - cocoa.

5. It involved the building of physical infrastructure such as roads, harbours and railways for easy transportation of raw materials.

6. It was characterized by Domination of European. African role of middlemen was suppressed instead of that European established their trade companies.

7. Colonial production was based on coercion. The colonialists used Africa as a dump place for their manufactured commodities such as clothes, wine, sweets and beards. Introduction of money economy. Establishment of processing industries such as cashewnut pupling industries.

Factory or Industry

Objectives of Colonial Economy
Colonial economies were shaped by the interests of the metropolitan economy, therefore, they responded to the demands of the colonial powers. Objectives of the Colonial economy were:

1. Colonies were expected to provide raw materials, both agricultural products and minerals, to the factories of the European countries. Examples of the agricultural raw materials includes cotton, coffee, sisal, pyre thrum, tea, cocoa and palm oil.

2. Colonies were expected to import manufactured goods like clothes, shoes, blankets and utensils from Europe.

3. The Colonized people were expected to provide cheap labour for the benefit of colonial masters.

4. Colonies were also expected to be self- supporting. This means that the colonized people were expected to raise revenues that cool support administrative costs of colony.

5. Finally, in order to insure that exploitation of colonial resources was done efficiently, law and order was to be maintained. This in turn would facilitate the exploitation of resources for the benefit of colonial master.

Sugar Plantations


These were three methods used to establish economy which were:

Under preservation the colonial economy preserved the followings:-
a) Labour unit. eg The use of family labour
b) Tradition system of production e.g shifting cultivation mixed farming and inter cropping. This was done mainly in the peasant economy.

The colonialists introduced the new elements in the pre-African economy things which were introduced were:
1. Introduction of money. e.g Indian currency like Rupees during Germany rule.
2. Introduction of kipande system. forced people to walk with identification card
3. Introduction of cash crops.
4. Taxation
5. Forced labour
6. migrant labour- Migrant labours were the labours comes from the distant areas where the labour reservations were established.

1. Local handcraft industries were destructed.
2. importing ready manufactured goods to Africa.
3. Banning of local industries.

The colonialists instilled retaining some elements of pre-colonial economy to support production of raw materials which were needed by European example of things which preserved were Traditional tools in peasant agriculture and families remained as the basic unit of production and precolonial relation production feudal societies were reserved.


Why did Colonialists Used Preservation Method  Preserved some Traditional African Economic Systems

1. Presence of resistance from the masses. In some areas in Africa which were centralized were strongly resisted new colonial economies systems e.g. disagree to pay taxes, land alienation etc.

2. Ignorance and absence of reactions of people. Colonialists preserved some traditional African economic systems because in some areas Africans were ignorant with a new economic system and were not ready to apply them.

3. Reluctant/ conservativeness of the people. Some areas Africans were not ready for the changes hence colonialists preserved their traditional economic systems.

4. Absence of enough land. In some areas land alienation was impossible hence colonialists left the Africans to maintain their traditional economic systems under colonialist supervision.

5. Good traditional labour system. Some of the African societies had good traditional labour system that is family which ensures constant supply of labour and production which prevent colonialist to apply new economic systems.

6. Awareness of cash crops production. In some areas In Africa including Buganda they had knowledge of practices cash crops even before colonial rule hence colonialists preserved them.


There are [5] five main factors of colonial economy introduced in Africa;
1. Agricultural sector
- Peasant economy
Plantation economy
- Settler economy
2. Mining economy sector. It deals with the exploitation of minerals.
3. Transport and communication
4. Trade


Types of agriculture introduced in africa during colonial economy.
I. Peasant economy / agriculture e.g. in uganda
II. Settlers agriculture in kenya and zimbabwe
III. Plantation agriculture


These are small scale agriculture productions where by a farmer produces both food crops and cashcrops. Colonialists introduced peasant agriculture during colonial rule for the following aims/reasons;
a) Earning cash by selling cash crops.
b) Production and producing food crops for their survival during colonial rule.
c) To ensure that peasants [small scale farmers] are producing for capitalists.

Peasant Agriculture

How Peasant Economy was Introduced in Africa

Introduction of peasant, cash crop farming in Africa was difficult because of the following reasons:
1. African traditional was only producing food crops for direct consumption.
2. Ignorance. Many Africans were ignorant [not aware] on cash crop production.                
3. Readiness of the people. Many people were not ready to produce cash crops. 
4. Poor technology. Most of the peasants were using poor technology in the farming i.e. hand hoes, axes, panga etc.                

Due to the above difficulties colonialists applied the following things in order to introduce peasant cash crops production;

1. Missionaries’ persuasion. Missionaries persuade Africans who converted to Christianity to grow cash crops.

2. The use of force. Those Africans who rejected to grow cash crops were forced to grow cash crops through; Orders from the colonialist,

3. The chiefs and African head men received orders from colonialists to force their fellow Africans to grow cash crops.

4. Through seeds distribution and cash crops planting supervision.

5. Establishment of large farms in villages which grow cash crops where by people were forced to work there.

6. Restructuring of colonies.

7. Encouraged the use of poor (crude) technologies in production i.e. the use of hand hoes, panga, axes etc.

Tea Production

Characteristics of Peasant Agriculture

1. Family was the unit of production. Peasant economy was characterized by the members of the family to be sources of labour in production.

2. Peasant based on a small unit of land. Peasant was characterized by practice of agriculture on a small piece of land which was populated.

3. Peasant based on inter-cropping. Peasant practiced more than one type of crop in a single area for food and cash crops.

4. Peasant used poor technology. The use of poor technology in production such as hand hoes, axes and pangas were much applied in the peasant economy.

5. Peasant used on a dense population made it hard for land alienation to be practiced, if land alienation was used, many people would be affected and there would be chaos in the area.

The colonial government was afraid of the centralized kingdoms that proved to be tough against the establishment of settlers’ agriculture. Some areas were tough and unfit for white settlement i.e. Uganda equatorial region had high temperatures that discouraged white settlements. Certain crops i.e. [cotton and coffee in Uganda] needed great care and could not be mixed easily with other systems of agriculture. Centralized and strong kingdoms in Uganda proved efficiency and capability to organize and supervise agricultural activities in their areas. These traditional chiefs were paid lowly for supervising that activity. Taxation was imposed on the people so that they could cultivated cash crops.


Uganda was among of the first colonies which peasant economy was introduced by colonialists. The reasons behind for people of Uganda to be preserved to continue to practice small scale agriculture it was because Uganda was a centralized state having good traditional and systems under feudal relations before colonial rule. Due to that Britain did not want to disturb that system so as to avoid resistance. Therefore they left the people of Uganda to continue growing food crops alongside cash crops under British supervision.

Cotton Farming

Factors / Reasons Why Peasant Agriculture Economy was Introduced in Uganda and Not other Areas.

1. Dense population. It was difficult for the British to alienate and get huge land from the natives.

2. Problem or shortage of labor supply. Labour supply in Uganda was a problem since traditionally family was a basic unit of production hence colonialists introduced peasants.

3. Unfavorable climatic conditions to the Europeans. Europeans could not be able to stay in Uganda since climatic conditions of Uganda which was characterized by heavy rainfall, coldness and hotness were not suitable or favorable for them.

4. The nature of crops. Peasant economy was introduced in Uganda because the types of crops such as coffee which were grown in Uganda needed great care and great supervision.

5. Good centralized feudal political system.
6. Readiness of the people.
7. The influence from colonial government.

8. Peasant economy was cheap and easy to control.
9. The infrastructure and the territorial problems in some areas of Uganda and Tanganyika.

Therefore the factors/reasons above were the factors behind the introduction of peasant economy not only in Uganda but also in north Nigeria and Tanganyika (in Kilimanjaro, Bukoba, Mbeya).


This involved production by foreigners. These foreigners usual presented the interests of the metropolis (i.e. their main interest were mining and agriculture in the colonized countries). The promotion of agricultural production was to go hand in hand With settlements in Africa, especially in those areas that were fertile. Settlers settled in big numbers in central Africa (Malaysia Zambia, Zimbabwe), South Africa, parts of French equatorial Africa, French West Africa, and in East Africa (Kenya).

Settler's Agriculture

Features of Settler Agriculture

1. Land alienation with differently issue land ordinaries, in 1900 the land occupation ordinance was enacted in Zambia. The ordinance required that Europeans who had been allocated land must occupy and use that land or otherwise they would pay taxes for leaving such land redundant. In Kenya in 1597, the land regulation office set a si.. vacant land for European settlements, in 1902, the native Land ordinance allowed the commissioner to sell or give crown land to the Europeans, and in 19. large scale land alienation in Kikuyu began.

2. Forced labour: The French, German land Portuguese follow a similar policy of forced labour and unpaid labour.

3. Forced labour was required to reduce costs that were necessary in public services. In Zimbabwe in 1897, the Nature regulation Act was passed, forcing African chiefs to produced labourers at law coast.

4. Taxation: the hut tax was introduced in Malawi in early 1890 in Zimbabwe in 1898, and in Zambia in 1900. In Kenya the Hut Tax was introduced in 1980, and poll tax in 1910. The intention of the tax was to cover administrative expansion ways by which Africans would be forced to work in European farms in order to raise money to pay their taxes.

5.  Migrant labourers were transported from faraway places to work in settler plantations.

6.  The development of infrastructures to serve the settlers.

Why Settler Agriculture Dominated in Kenya than in Uganda or Tanganyika?

1. Climatic condition. Climatic condition in Kenya made Europeans to be attracted especially in Kenya highlands. also this areas was very fertile.

2. Kenya was made a 'crown land' means for Europeans settlements as results Africans were no right to own land.

3. Low population in Kikuyu highland, this made land alienation possible hence no strong resistance.

4. Africans were prohibited to grow cash crops. This also made British settlers to attracted in Kenya as there were competition from Africans.

5. Construction of Buganda railway which facilitated the transportation of raw materials from interior to Mombasa.

6. Settlers were favoured in Kenya. This is because settlers came in colonies under the influence of colonial state so the colonial state did everything to favour them hence settlers had critical influence on colonial government.


This commodity production entailed massive exploitation of land and intensive exploitation of African labour. The owners of the plantations were usually capitalists In Europe employing managers to supervise production i.e. sisal and coffee Estates in Tanganyika.

Plantation Agriculture

Why Plantation Agriculture was Established in Tanganyika

1. Due to change of colonial masters. In the beginning Tanganyika was under Germany but after the 1st World war Tanganyika became under the British.

2. The interests of the British colonial governors in Tanganyika. For example sir Byatt 1919-1924 from Somali and Donald Cameroon from Nigeria; these were committed to peasant or plantation agriculture rather than settler economy.

3. Tanganyika had a large areas where settler agriculture was not suitable to manage it but; they settled only on highlands around Kilimanjaro, Usambara and South Western highlands of Iringa and Tukuyu.

4. There was no settler policy in Tanganyika as in Kenya policy was committed to African production.

5. There was no good and efficient transport and communication; it was not very much provided in this particular sphere of influence.


Mining was another area of colonial economic activity; among of their demands was obtaining minerals in Africans such as Gold. Examples of areas where mining economy was taking place were;


1. South Africa
Kimberly -diamond discovered in 1867.
Wit water- gold discovered in 1886.

2. East Africa
Mwadui [Tanganyika] -diamond
Geita and Musoma - gold
Copper at Kimbe in Uganda.

3. Central Africa
Southern Rhodesia - gold and coal
Belgium, Congo - copper, tin, zinc and lead
Zambia - copper and lead
Angola - diamond and oil

4. West Africa
Northern Nigeria - coal mines at the tin mines in Josh plateaus.
Ghana gold mines


Effects of colonial economy to the Africans 
Colonial economy in Africa had both positive and negative effects on the African people:
  1. Africans inherited infrastructure from the colonial governments e.g. roads, railways, that were used for carrying goods and labourers.
  2. After the independence of African countries nationalisation of plantations, buildings under the colonial governments started. Buildings, plantations and harbours were now under the African states.
  3. It led to the introduction of new varieties of crops from outside e.g. varieties of cotton from America, and coffee.
  4. Africans inherited European economic plans which continued to be used after independence e.g, the treatment of labourers.
  5. Africans were impoverished due to exploitation by the colonial governments.
  6. African technology declined due to the destruction of local industries.
  7. Some areas that were known for producing labour were under developed due to rationalisation, e.g Kigoma in Tanganyika.
  8. Africans inherited capitalist elements from their colonial masters in some areas like Kenya and Zimbabwe.
  9. It led to Europeans taking natural resources from Africa e.g. minerals, raw materials through an unequal exchange.
Tanzania Central Railway Line
A railway which was constructed by the Germans during the colonial rule in 1905


Click Here to get a full view of the notes seen below:


1. How did the colonial government ensure constant supply of labour in their colonies in East Africa? (NECTA-2000)

2. Why was settler economy a success in Kenya but failure in Uganda? (NECTA-2002)

3. How did colonial economy differ from the pre-colonial economy? (NECTA-2004)

4. Describe briefly the common characteristics of settler and plantation agriculture in colonial Africa. (NECTA-2005)

5. How did the colonial state uphold the interests of white settler in Kenya? (NECTA-2006)

6. Identify six factors which determined the variation of agricultural systems during the colonial period. (NECTA-2012)

7. Analyse six tactics used by the colonialists to establish colonial economy in Africa. (NECTA-2013)

8. “Migrant labourers were very useful to the capitalists during colonial economy in Africa.” Substantiate this statement by giving six points. (NECTA-2014)


1. Show how settler helped colonial government in Kenya
 2. Differentiate between pre colonial and colonial economy 

3. Discuss the mechanism, used by colonialists to break up the natural indigenous economy of East African people.

4. Using concrete examples of any East African society show the pattern of the physical and social infrastructures were determined by the system of the colonial economy.

5. How did the colonial Government ensure constant supply of labour in their colonies in East Africa?

6. Why was the settler economy a success in Kenya but a failure in Uganda?


  1. What are the effects of colonial economy in African societies

  2. please could you share this document

  3. Thank you very much

    your note is a very short and has brief explanation

  4. Why did colonialist discourage heavy industries in Africa

  5. Big up sana maandalizi mazuri na kazi nzuri

  6. "We consumed what we not produced but we produced what we not consumed during colonial economy"justify this statement