Guest post: Time for business

The renaissance of African entrepreneurial history

The prodigal has returned. Capitalism, once a central theme in the study of economic history, was cast out in the 1980s and not welcomed back until after the turn of the present century. During the last 20 years, the economic history of Africa has received an injection of vitality from economists who have been attracted by the apparent failure of many states in the continent to climb the development ladder. The resulting initiatives, referred to collectively as the new economic history of Africa, have opened up areas of research previously thought to be beyond recovery.

The most distinctive contributions so far have applied statistical techniques to data that can now be processed rapidly by computer programmes. The results have included new findings on subjects relating to long-run economic growth, notably the slave trade, demography, colonial fiscal policy, real wages, tax burdens, and measures of nutrition and welfare. Although the new school of research makes little explicit use of the term ‘capitalism’, its central interest is in capitalist forms of development, particularly as mediated by colonial authorities.

All of this is well-known and has been widely praised. There are, however, many other forms of capitalism, as there are of economic history, and these also deserve to be given prominence. They have not been displaced by any deliberate act. It is simply that a new trend has a magnetic appeal that attracts the attention particularly of young scholars and can shape the priorities of a generation. Accordingly, what follows here is not an attack on recent scholarly achievements but an attempt to widen the boundaries of research to include themes that are complementary to them. 

Entrepreneurship is one such subject. It is central to economic development, has long been neglected, yet has considerable potential. Its theoretical and empirical challenges should attract new researchers and reward them with findings that contribute not only to a specific place and time but also to broader issues of economic development. Moreover, it is a subject that poses the ultimate test for historical researchers: how to relate the particularities of individuals to the grand events swirling around them.

I shall illustrate these themes by referring to my new book, Capitalism in the Colonies: African Merchants in Lagos, 1851-1931 (Princeton University Press, 2024). In doing so, I should add that I have done no more than open a door to a subject that has long been closed. Inevitably, subsequent researchers will improve on my effort. If they do not, I will have failed.  

My book provides the first substantial assessment of the fortunes of African entrepreneurs under colonial rule. Although entrepreneurs are recognised as being central to the process of economic development, their history has not been subjected to detailed, long-run analysis. The potential indicated by the small number of studies produced in the 1960s and 1970s has yet to be realised. My own study is based on the reconstruction of the lives and careers of 100 merchants in Lagos between 1851 and 1931. This period, which runs from the beginning of colonial rule to the point where it was well established, is long enough to reappraise key issues relating to the emergence and changing fortunes of the mercantile elite.

The environmental context is provided by the generic concept of the port city. I have introduced a sub-category, the colonial port city, which enables Lagos to be compared to similar port cities in Asia and elsewhere. The analysis of entrepreneurship bypasses conventional theory, devised to represent modern industrial societies, and returns to the eighteenth-century French writers (Richard Cantillon and Jean-Baptiste Say) who founded the subject. The world of commerce and agriculture they described is much closer to the environment inhabited by Lagos entrepreneurs in the period I have covered. (The British did not have a word for ‘entrepreneur’ until they borrowed it from the French).

The book argues that African merchants were not only more successful under colonial rule than has conventionally been thought, but were also far more adventurous than the expatriate firms. They held on to their share of overseas trade until the 1930s, and pioneered the main innovations of the period: motor vehicles, sewing machines, publishing, tanneries, and new types of internal trade. They founded the construction industry that built the town, moved inland to start the cocoa-farming industry, which became the second largest in the world, and developed the finance sector that is so vital to Nigeria’s economy today. They took the lead in changing singly-owned, personal businesses into limited liability companies, creating freehold property rights, and promoting wage labour. In short, they were the capitalists who introduced the institutions of capitalism into Nigeria.

The colonial government neither helped African entrepreneurs nor pushed them out of business. The structural weaknesses that are often said to have caused them to fail either did not exist or have been exaggerated. Their fortunes, like those of the expatriate firms, were determined mainly by the oscillations of international trade. Nevertheless, my study invites a successor that will take the story down to the present day. Did the merchants I have studied establish a line of continuity with the economy of independent Nigeria, as I suggest, or did the world slump in the 1930s and the upheaval brought by the Second World War sever connections with the past? This is a subject that awaits its researchers.

My story has been pieced together from a variety of sources, in addition to standard official correspondence and Lagos newspapers. The most important sources are in the port itself and include oral testimony from the families of the merchants in my sample, and some of their private papers. The Law Court, Lands Office, and Town Council Records, like those held by the Registrar of Companies, remain largely unused yet provide much of the detail on which my book is based. Nevertheless, it was leg-work in the town and field-work outside it that brought the merchants and their environment to life.

This subject makes it possible to contribute to the prime purpose of the pioneers of African history, which was to tell the story of Africans in their own continent, while also connecting it to external influences transmitted by the global economy and colonial rule. Above all, the history of Lagos merchants reminds us that economic structures have no life of their own until they are animated by the actions of creative individuals.

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