The Economic Imperialism of the Royal Niger Company

Abstract

The Royal Niger Company was a British chartered company, active from 1886 through 1899 in the territory bordering the Niger and Benue Rivers in contemporary Nigeria, that parlayed its administrative powers into a successful commercial monopoly. Such foreign-owned chartered companies played a significant role in the history of economic imperialism in sub-Saharan Africa. But there is considerable disagreement among economic historians over the profitability of these companies for investors in imperial nations. On one side is the growing group of scholars, many from formerly colonial African nations, who feel that chartered companies were exploitative and profitable for foreign investors (see, for example, 1, p. 319). On the other side are the economic historians who conclude that chartered companies in tropical Africa were generally economic failures, at least from the narrow viewpoint of those who invested in them. A. M. Kamarck, for example, states: "The chartered companies that went out of existence before World War II in no case had given positive returns on the invested capital" (22, p. 190). The purpose of this study is to analyze economic aspects of the operations of the Royal Niger Company in order to demonstrate that this chartered company was unquestionably a commercial success and that its economic profitability had important ramifications in the colonization of Nigeria. In an introductory section factors affecting the establishment of the Royal Niger Company as a chartered company with governmental responsibilities as well as commercial privileges are reviewed. The second section contains a history of the commercial and administrative operations of the Company, with emphasis on the successful implementation of a monopoly policy and the circumstances that led to revocation of the Company's charter. The third section is an economic interpretation of Company operations, culminating in a comparison of the declared profits of the