The economic system and business activities that dominated the southern region of Africa between the years of 1875 and 1910 were unique and quite noteworthy, as this region was under the colonial rule of Great Britain, Portugal, and Germany largely because of its rich resources. The colonies of South Africa, Northern Rhodesia (Zambia), Southern Rhodesia (Zimbabwe), Nyasaland (Malawi), Lesotho, Botswana, and Swaziland were included in this region (Moore, 2008). The ruling countries of these colonies are indicated in the map below. Due to the lack of autonomy of the Africans, the economic and business activities were nearly entirely controlled by the imperial rulers of the colonies; the residents simply provided the labor. Leaders of European imperialist countries were committed to the ideology that their superior technology and weaponry granted them the right to colonize Africa and utilize its many resources as a means of promoting modern civilization (Moore, 2008).
European penetration into Southern Africa in the late 19th and early 20th centuries by
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In order to understand the nature of the economic system and business activities in Southern Africa, it is essential to be aware of the different types of imperial governance that were utilized during this time. The first type is Indirect Rule, and it was often used in African colonies that were imperially ruled by the British. With this type of rule, the African citizens were given technical autonomy in ruling their country, however, the actual economic and political decisions were made by the imperial ruling officers of the European country. The second form of imperial governance is Settler Rule, in which Europeans relocated to the African colonies and seized direct rule over the colonies. The final type of governance was executed through Trading Companies. These were private companies that were granted large territories in Africa by the various European governments through a charter. The purpose of the trading companies was to exploit the natural resources in Africa in order to benefit the ruling nations, recruit labor within the colonies, and set up a legislation and taxation system (Moore, 2008).
This was the first time that these regions had such structured government, so the people were all disarmed to assist their compliance with the new rules. The colonies were given more freedoms when the European governments deemed they were capable of autonomously running a civilization. Laws such as the 1909 South Africa Act gave added freedoms to the British colonies of Transvaal, Natal, Orange Free State, and the Cape (Marks, 2014).
While various combinations of these three types of governance were employed throughout this time period in southern Africa, the trading companies played a significant role in the economic structure and business activities. Charters for trading companies in southern Africa were granted to important, wealthy businessmen who sought to exploit the resources of their respective colonies for their own financial gain (Marks, 2014). This arrangement drove the economic system in the colonies, although it did not necessarily benefit the African standard of living. For example, the most powerful trading company in the southern region of Africa was the British South Africa Company (BSAC), which was formed in 1889 by Cecil Rhodes. The BSAC ruled over the colonies of Nyasaland, Northern Rhodesia, and Southern Rhodesia until 1923. This company was known for using tremendous force in colonization (Moore, 2008). The specifics of the key industries of diamonds, gold, and labor, which contributed significantly to the economy, will be discussed in the following sections.
For an interactive map of the colonies and their imperial rulers throughout Africa's history, click the button below.
Header Photo: Williams, G. F. (1905). Kimberley Mine. [Photograph]. Retrieved from https://commons.wikimedia.org/wiki/File:Kimberley_Mine_shaft.png. Available under the Public Domain. Map:Encyclopædia Britannica, Inc. (n.d.).European penetration into Southern Africa in the late 19th and early 20th centuries. [Map]. Retrieved from https://www.britannica.com/place/Southern-Africa/European-and-African-interaction-in-the-19th-century. Licensed for educational purposes.