Corporate imperialists come knocking

As soon as the 1900 Buganda Agreement was signed, foreign companies turned up in Uganda looking for opportunities to exploit.

One of the earliest, the Uganda Company, was an offshoot of the Church Missionary Society proving that the pursuit of heavenly places did not temper desire for earthly treasures.

The British Cotton Growing Association had, of course played a key role in establishing the crop in the country as earlier reported but there were many more interested parties in the cotton-growing sector, the plantation industry generally, and other parts of the new colony.

The Mabira Forest (Uganda) Rubber Company Ltd., launched in 1906 with authorised capital of £120,000 had its eye – the first but certainly not the last such ‘investor’ – on harvesting rubber and planting rubber trees in the tropical forest but would run out of money and close shop in 1921.

Other companies included the London-based East Africa Syndicate, which, in 1903, was given exclusive rights to prospect for precious stones and minerals over large parts of Bunyoro and Ankole.

Money & economic scrambles
Far from finding the oil in Bunyoro, the gold in Bushenyi and the copper in Kasese, Prof. Mahmood Mamdani notes that, “the search for the golden egg proved fruitless.”

While the early entrants were mainly British, the colony began to attract interest from farther afield.

With all these companies, it was important to establish a banking and monetary system to plug Uganda into the wider colonial economy. In 1901, the Indian Rupee was introduced as the currency in Uganda replacing the cowrie shells that had been the currency throughout most of the second half of the 1800s. (The Indian Rupee would remain the currency of the colony until 1919 when the East African Currency Board was established).

In 1903, the colonial administrators invited the National Bank of India to set up shop in Uganda. Despite its name, the bank (which later became National and Grindlays Bank) was British-owned but had earlier established itself in the Indian colony.

Historian Jan Jelmert Jorgensen notes that the bank, in a practice that modern-day investors would not find surprising, demanded for concessions and guarantees including “suitable accommodation” and “protection from the natives” in Uganda.

“After more negotiations, the colonial state agreed to deposit with the bank all surplus state funds and the salaries of European government employees,” says Jorgensen.

“It also supplied the branch with a guard for five years, free use of the Treasury’s ‘strong room’, a vault door, real estate services and a plot with a 99-year lease at £10 per acre.”

The bank set up shop in Entebbe in 1906 before opening branches in Kampala and Jinja in 1911. A year later, the Standard Bank of South Africa (Stanbic Bank today but which was an overseas subsidiary of the British overseas bank - Standard Bank) opened its first branch in Kampala.

It wasn’t only British and South African interest in the young colony, however. When the First World War disrupted cotton exports to Britain and caused their diversions to India and Japan, it attracted the attention and interest of businesspeople in the two countries.

One of the Indian firms attracted was Narandas Rajaram and Co. Ltd, which Prof. Mamdani notes was well known, experienced in the cotton trade, and endowed with considerable financial resources.

“By 1918, it had become a powerful force in the cotton industry, at one stroke ending the domination of a few English firms and simultaneously forging a strong link between Uganda and the Bombay market,” notes Prof. Mamdani.

While the presence of British and Indian firms is widely known, few Ugandans are likely to know about the presence, at this time, of Japanese financiers like Gosho Kabushiki Kaisha Ltd supporting Indian cotton traders, and firms like Toyo Menkwa Kabushiki Kaisha Ltd., and Nippon Menkwa Kabushiki Kaisha (Japanese Cotton Trading Co. Ltd) which directly owned ginneries in Uganda.

These were by no means all the foreign firms active or interested in the cotton, coffee and other trades in Uganda. However, after the political scramble for Africa, the entry of these foreign firms, financiers and their large chests of capital, set the stage for the second part of the colonisation of Africa and countries like Uganda; the economic scramble for resources and profit.

Citing the research and work of fellow historian Anthony G. Hopkins, Jorgensen notes: “What Hopkins terms ‘the second partition’ occurred between 1890 and 1930 as European-owned firms launched offensives from three initially competing bases – Europe, South Africa and India – to carve out commercial empires in Africa.”

This saw the emergence of plantation farms in West Africa, peasant farm holdings in Central Africa, labour reserves to support mining industries in southern Africa, and a somewhat hybrid version in East Africa.

As told by Jorgensen, “West Africa became the domain of European-based firms, and southern Africa the domain of South Africa-based firms. Central Africa was dominated initially by European-based firms, then jointly by these and South Africa-based firms. East Africa became the joint preserve of India-based European capital and South Africa-based European Capital.

“Except for shipping, European-based firms rarely gained prominence in East Africa, and South Africa-based firms did not enter West Africa in accord with the spheres of influence agreement signed between Unilever and Anglo-American in 1931.”

Looking back to Uganda, the change becomes all that dramatic seen with the benefit of hindsight. In the space of two decades, the old political order had been destroyed and subjugated to foreign political and military control. The economy had not only been transformed from one that was relatively self-sustaining to one that was dependent on the vicissitudes of faraway markets and producers, it had also been put in foreign hands overnight.

In addition, the new entrants were about to commence a battle for economic superiority in the new colony that would shape the long-term nature of Uganda’s economy and cement the inequalities that had placed the natives firmly at the bottom of the floor below the Asian merchant and administrator class and the British governors.

The grass did not know it then but the elephants were about to start fighting and trampling over the cotton and coffee fields.

Continues tomorrow

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