Professor of International History, Gareth Austin, examines "The Colonial Past and Africa's Potential Economic Development" in the Autumn edition of Globe, the Graduate Institute review.

Some optimists, not just conservatives, dispute the premise of the question: orthodox Marxists argue that colonial rule introduced and established capitalism south of the Sahara, and thereby began to liberate the region’s full productive potential. Pessimists, too, exist on both left and right: the dependency school of the 1970s shares with recent liberal institutionalists the belief that while the capitalism of colonial regimes sufficed to facilitate the exploitation of African labour and natural resources, it was completely inadequate to stimulate long-term productive investment. Many historians think both sides exaggerate the impact of colonialism, especially as most of Africa had only 60–80 years of European rule.

For convenience, let us define “potential economic development” as the maximum possible level of income per head, whose achievement probably requires long-term structural change to move the economy higher up the “value chain”. “Potential” depends on resources; resource “endowment” is not static. Most of Africa’s current mineral wealth was unknown or not existent when the “Scramble for Africa” began in 1879, either because the deposits had yet to be found, or because the minerals did not yet have much commercial value. Technical innovations in industrialised countries, from milk chocolate and the motor car to nuclear power and the mobile phone, created or multiplied the markets for some of Africa’s key exports.

Assessment of colonial impact depends partly on identifying where African economies were headed at the time of colonisation. There is a near-consensus among economic historians that most of Sub-Saharan Africa was short of labour as well as capital, often until well into the 20th century. While cultivable land was relatively abundant, its potential was restricted by harsh environmental constraints (thin soils, extreme seasonality of rainfall, endemic diseases often precluding use of animals for transport or ploughing). These conditions help explain why intensive agriculture, though ancient in certain areas, did not spread; and why centralised states, again ancient in parts of Africa, did not displace mini-states and “stateless” societies even in the 19th century. Ethiopia was an exception: in an environment unusually conducive to the plough, large agricultural surpluses provided the base for the most logistically-resourced state in Sub-Saharan Africa. By no coincidence, it was the one state which defeated the attempt to make it a colony, until Mussolini’s invasion in 1935. Pre-colonial Africa was not static: African households and states adapted to their conditions in ways that gradually ameliorated or altered them, notably by selective adoption of new crops from parallel latitudes in Asia and the Americas.

African initiatives continued under colonial rule: not everything that happened during colonialism was the result of European policy. This was most vivid in the so-called “peasant” colonies, where most of the land remained under African control. In Ghana and Nigeria, it was Africans who adopted the cultivation of cocoa, then an exotic crop, and this initiative was the basis of their economic growth. Ghana became the world’s largest producer of cocoa beans, and there is now quantitative evidence that Ghanaians achieved higher nutritional welfare and purchasing power as a result. Even in “settler” and “plantation” colonies, where Africans were deprived of most of the land, it was often Africans who pioneered the growth of food production for urban markets during the early colonial period.

Conversely, Europeans generally sought to rule Africa cheaply, hence the frequency of “indirect rule” (through chiefs and other African intermediaries). In 1939, there were supposedly 43 million people (probably several million more) in British tropical Africa, but only 2000 white administrators, police and soldiers. Again, foreign investment in colonial Africa was small. For the entire 1870–1936 period it amounted to less than £13 per head (in nominal terms) overall. As today, the major exception was investmentin extractive industries, which explains why in South Africa this figure was nearly £56 per head.

So, what can be said about the effects of colonial rule on Africa’s long-term development potential? Colonial governments introduced railways and later invested in motor roads. Governments and missionaries established schools. Public health measures contributed to the origins of a major increase in African population from the 1920s, though conventional estimates of a doubling of population during 1900–1960 are exaggerated. Colonial governments used forced labour but suppressed the internal slave trade and eventually prohibited slavery itself. Though the states bequeathed by the Europeans at independence were weak in revenues and legitimacy, they tended to be larger, wealthier and with more educated officials than pre-colonial states. In that sense there was a step towards the construction of states with the capacity to promote development by mobilising resources and providing a consistent framework of rules to facilitate economic activity. Pessimists berate colonial governments for failing to establish free markets in land; but the existing land systems, largely indigenous in origin, sufficed to support the cocoa booms.

Notoriously, colonial economies were predominantly exporters of primary produce. In itself, that can be defended: the comparative advantage of land-abundant economies lay in land-extensive agriculture like cocoa growing, or mineral extraction. But investment in education and electricity was too scant to facilitate a further move to industrialisation. Monopolistic control by European firms of some sectors of “peasant” colonies squeezed opportunities for African entrepreneurship. In settler economies, governments seized land to force Africans to sell their labour. This artificially cheap labour contributed to the expansion of mining. By 1939, settler politicians in independent South Africa and in relatively autonomous Southern Rhodesia were using the state to promote industrialisation. But, as became clear in apartheid South Africa by the 1980s, an internationally-competitive manufacturing industry required large supplies of inexpensive skilled labour – impossible with racially segregated education and jobs.

It is wise to be cautious about historical determinism. In this case, it is hard to be sure that colonial rule permanently lowered or raised the developmental potential of Africa. But at decolonisation African economies were too short of labour and education to permit the post-independence industrialisation drives much chance of success. Today, however, African labour forces are relatively cheaper, and much better educated; in some cases, state capacity may also have improved sufficiently to facilitate a more rapid realisation of the continent’s economic potential.

This article was published in French (paywall) in Le Temps on 17 September 2013.

Read more about International Geneva and the Future of Africa in Globe.