Many colonies in Africa were severely impacted by the Great Depression.

Broadly speaking, the fiscal policy of British, French, and Belgian colonies in the first decades of the 1900s was to try as much as possible to make budgets self-funded through local taxation (taking the form of head tax on everyone, income tax on individual Africans and Europeans who made sufficient income, or tax on export commodities.)

Additionally, immediately after World War 1 there was a commodity boom in prices for things like rubber, copper, palm oil, cotton, etc. The 1920s saw strong private and corporate investment in tropical africa, either in the form of capital investments for the creation of mines and plantations. Or else, in private investment in colonial bonds, which helped fund infrastructure projects (roads, rail, irrigation and dams, ports) and promise future returns.

The economic slowdown in heavily industrialized countries like US, UK, Germany, France meant much reduced demand for industrial commodities like rubber, copper, palm oil, cotton, cocoa. This in turn meant much reduced commodity prices. In the case of West African cocoa and palm-oil producers, the trees that produce these products take time to fully mature and produce fruit. So, land cleared and cocoa trees planted in 1926 or 1927 would finally be producing in 1931 as the depression set in. So, in West Africa, Cocoa and Palm oil growers continued to export greater amounts of commodities during the 1930s, at lower and lower prices.^1

In the Belgian Congo, the situation for rubber producers was somewhat different. Britain, Netherlands, India, Thailand and France agreed to the International Rubber Regulations Agreement (IRRA) which created a cartel to stabilize the price of rubber for producers. This agreement set limits on production and export, and prevented the establishment of new plantations in Netherlands East Indies, Malaysia, Thailand, India.

Importantly, Belgium was not a signatory to this agreement, and so rubber producers in Belgian Congo could enjoy the benefit of stabilized rubber prices without having to abide by the export limitations of the IRRA.^2 In this same time, the Firestone corporation began to establish large rubber plantations in Liberia as a reaction to IRRA's cartelization of the rubber industry.

In the Copper-belt of Belgian Congo and Northern Rhodesia, the 1920s had seen a great deal of investment in opening of copper mines and mobilizing a labor force to work in these mines. Quoting from Copper, Borders and Nation Building by Enid Guene^3:

By the time Northern Rhodesia copper entered the world market in 1931, the onset of a severe depression in 1931 dramatically reduced the price and demand for copper on the world market. In copper mining, the Depression years were 1929 to 1936, with copper prices starting to fall in mid 1930 and hitting bottom in 1932. 4 Mining companies in both southern Katanga and Northern Rhodesia reacted to the slump in copper prices by curtailing production and reducing the size of their labour force. Recruitment for the Katanga mines in Northern Rhodesia, which had already been decreasing for some years, came to a final end on July 31 1931. In addition more than two-thirds of the UMHK workforce was laid off – the African labour force was reduced from 16,000 to less than 5,000 between 1930 and 1932 – with the Northern Rhodesians being especially targeted.

The number of Northern Rhodesians settled in Katanga drastically reduced from an approximated population of 20,000 in 1929 to an approximated population of 7,200 in 1932.2 In the meantime, due to the combined effect of the Depression and the repatriation of Northern Rhodesia-born miners from the Congo in 1931, workers started to flock in the Copperbelt mines in such numbers that recruitment was no longer necessary and was disbanded in 1932. What had been the companies’ dearest hope just a year or two before, was now almost an inconvenience as there were more voluntary recruits than the Copperbelt mines could realistically accommodate.

In addition the Depression was eventually to close all of the Copperbelt mines except the Roan Antelope and Nkana, and even these two remaining mines sharply scaled back production. African employees on the mines, which had hit a peak of 31,941 at the height of the construction boom in September 1930, dropped to 19,313 by the following September, and to 6,677 at the end of 1932. During 1931 and 1932, some 58 % of the workforce lost their job and unemployment on the mines was subsequently widespread.

Dismissed Africans were simply supposed to go home to rural villages during the slump. But many, having worked for some years on the Copperbelt or in other urban centres in Katanga, Southern Rhodesia, or South Africa had been away from the villages for a long time and ‘felt so out of touch they refused to return’

As I said before, the fiscal policy in the 1920s was to encourage fiscal self-sufficiency of a colonial budget based on taxation. As the economic depression deepened in the early years of the 1930s, British, French and Belgian colonial administrators saw tax revenues decline. Partly this was due to the reduction in tax incomes from commodity exports, partly because corporations simply shut down production of mines or plantations given unfavorable economic conditions. Meanwhile, investors who had been eager to invest in in colonial bonds in the 1920s became increasingly anxious that their investments bear fruit.

Under these conditions, the proportion of the adminstrative budget going towards debt service increased dramatically. In Belgian Congo in 1929, debt service took up 17% of the budget. From 1934-1936, debt service was between 40% and 44% of budget expenditures each year.^4 In the case of Belgian Congo, this severe budget crisis meant that the metropolitan Belgian government gave the colonial government a subsidy which in 1934 and 1935 amounted to 30% of colonial expenditures.^5

These subsidies notwithstanding, the budget crisis of the early 1930s delayed a lot of the social development schemes of colonial administrations. Funding for hospitals, education, transportation was all squeezed.

In response to these budget crises, the various colonial administrations responded in several ways to make up the shortfall. According to the historian Basil Davidson, the 1930s was characterized by quality of life deteriorating while taxes levied increased.^6 Aside from direct taxation (the head tax), colonial administrations instituted fees for services in this era.

Also, the economic crisis increased the colonial states reliance on compulsory labor to accomplish developmental goals. An example is the French establishment of the Office du Niger in 1932, which utilized forced labor from 20,000 Malians for construction of dams and irrigation canals, in a scheme for large-scale cotton production in the middle Niger.

Another example is Belgium's "Total Civilization" plan of 1933,^6 which allowed for compulsory cultivation of rubber, palm oil, and coffee as a way to combat african "idleness" and envisaged as a way to turn "natives" into yeoman farmers.

Another response, particularly in the British colonies, was the establishment of agricultural marketing boards. Similar in intent to the IRRA rubber cartel, these marketing boards were the insertion of the colonial state as the single buyer of agricultural products. These marketing boards were empowered to establish price minimums and maximums, in order to stabilize prices. Profits the marketing board made in re-sale of commodities on the international market would then be placed into a stabilization fund, and if the international price ever fell below marketing boards minimum price, stabilization fund would make up the difference for farmers.

In reality, the international funds never ended up falling below marketing board minimums, and the boards ended up being another way of imposing a direct tax on farmers in the late colonial era, which carried on into the independence era.

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1 An Economic History of West Africa by A.W. Hopkins. pp 254.

2 Colonial Exploitation and Economic Development; the Belgian Congo and the Netherlands Indies compared edited by Ewout Frankema and Frans Buelens. pp 198.

3 Copper, Borders and Nation Building; the Katangeze factor in Zambian political and economic history PhD thesis for Africa Studies Centre Leiden by Enid Guene pp 87-88.

4 Colonial Exploitation and Economic Development pp 91

5 Palgrave Handbook of African Colonial and Post Colonial History Edited by Toyin Falola and Martin Shanguhyia. pp 541

6 Colonial Exploitation and Economic Devlopment pp 204

Further Reading-

Palgrave Handbook of African Colonial and Post-Colonial History chapter 5 "Africans and the Colonial Economy" and 24 "Colonialism and Development in Africa"

Taxing Colonial Africa by Leigh A Gardner

Colonial Meltdown; Northern Nigeria in the Great Depression by Moses Ochonu

The Economies of Africa and Asia in the Inter-War Depression by Ian Brown