Credit in early nineteenth century West African trade

Abstract

Little attention has been paid to the great growth of trade in West Africa in the nineteenth century prior to the ‘economic revolution’ which began towards its close. As far as the export-import trade at the coast is concerned, British statistics show that between c. 1810 and c. 1850 the import of various manufactured staples increased by factors from at least 3 to as much as 50. The question arises as to how such a large increase in the volume of trade on the coast was financed in the absence of banking procedures. On the Senegal and Gambia and in the Niger delta, the traditional eighteenth-century practice by which visiting European merchants advanced credit to African brokers in goods continued. On the Gold Coast and at Sierra Leone and Lagos, however, a new class of local importers, of African as well as European origin, emerged and were able to secure credit from European exporters. But, though, less flexible than the newer system, the old system, with its tendency to monopoly on the part of both European traders and African brokers, seems to have permitted the greater expansion of credit. However, by the second half of the century, both systems were under strain and leading to conflicts over debts and jurisdiction, which are examined. Ultimately both were replaced by the European trading houses entering the interior trade through the use of paid agents, many of whom were recruited from among the new merchant class of Sierra Leone, the Gold Coast and Lagos.