Chartered companies were trading companies granted permission by their imperial governments to administer areas in which they were operating through concessions and signing agreements with local chiefs.

European traders came in large numbers to operate in East Africa following the successful missions of both explorers and Christian missionaries.  The most active traders included the British and the Germans. 

The traders were looking for new markets, new sources of raw materials and new areas in which to invest their money.

Some European traders formed small trading companies and associations to operate in East Africa while others worked as individuals.  The leading examples include: The Livingstonia Central Africans Trading Company (LCATC) founded by James Stevenson in 1878. He was a Scottish businessman. The company mainly operated in the region between Lake Malawi and Lake Tanganyika.  It set up a steamer service on Lake Malawi and also a boat on Lake Tanganyika to assist the London missionary society. They also built the Steven road to link up the two lakes.

William Mackinon

William Mackinon, another Scottish became the most active foreign trader in East Africa.  He formed the British India steam Navigation Company whose ships travelled all over the Indian Ocean and often called at the East Africans coastal towns.

William Mackinon developed special interest in Zanzibar's dominions and established good working relation ships with sultan to develop the coastal town of Dar-es-salaam towards Lake Malawi.

In 1872, he started a special mail service between Zanzibar and Aden.  As a result, this improved direct contact with Europe.

Mackinon maintained close contacts with the next ruler Seyyid Barghash, through him there was expanded British enterprises into the interior.  He also persuaded the sultan to lease his main land territory to the British company.  Unfortunately very few British traders were willing to invest in East Africa.

In September 1888 Mackinnon had confirmed some of Johnston's treaties in the Kilimanjaro district.  The government had approved the move.  This was followed by negotiations between the British and German governments to define the dominions of the sultan of Zanzibar.

In September 1887, William Mackinnon had formed the British East African Association (BEAA) to trade in the main land dominion of the sultan of Zanzibar.  This association was granted full Judicial and political authority by sultan Barghash.  In addition, they had a right to levy customs duties over the territory between Kipini and Umba River for fifty years.

By 1888, the association was claiming sovereignty over a territory stretching about 300 km in land from the coast and was quarrelling with the German Witu Company.  The company was also in conflict with Italy over sultan's Northern ports of Kismayu, Merca, Mogadishu and Warsheikh.

On September 3^rd 1888, Mackinnon secured a charter for his company.  Under the royal charter, the name of the company changed to imperial British East Africa Company.  This played an active role in the later British colonisation of Uganda and Kenya.

Role of IBEA Co. in the Colonisation of Uganda and Kenya

The company financed the administration of Uganda and Kenya on behalf of the British colonial government. In this way IBEA Company saved the British government from unnecessary financial burden.

It provided the initial skilled manpower for the administration of the British area of influence.  The British government was reluctant to take over responsibilities directly.

The company signed treaties of friendship with Buganda kingdom in 1900, Toro kingdom in 1900, Ankole kingdom in 1901, similar treaties were signed with the Kikuyu, Masai and Nandi.  The treaties were signed on behalf of the British government and were used to claim rightful occupation of the above territories.

It defeated the rebellious societies for example Bunyoro, Nandi, Masai, coastal Arabs and also defeated the Catholic and Moslem resistance in Buganda.  This eased the British colonisation of Uganda and Kenya.

The Company used its authority to help in the effective abolition of slave trade centres. They were destroyed.  The Arabs tried to put up resistance but they were defeated.

The IBEA Company developed several physical infrastructures for example they financed construction of Murram roads, medical centres and administrative posts like Machakos, Rabai, Kampala, Naivasha among others, the company also financed the surveying of the main route of the Uganda railway.

The company created security organs on behalf of the British colonial government.  The IBEA Company had its private army comprising of Sudanese, Arabs, Swahili and Ganda mercenaries.  It was this force that was used to maintain internal stability.

The IBEA Company provided relevant information about the economic potential of Uganda to the British.

There were reports about the fertile Kenya highlands, favourable climate and good soils in Uganda hence the determination to colonise this region. 

Something to note here is that the IBEA company faced difficulties in East Africa.  By July 1891, it was bankrupt.  The company threatened to withdraw from Uganda but Gladstone's British liberal government remained reluctant.

Fortunately, a group of missionaries and the sympathisers raised some 40,000 pounds to enable the company to operate until the end of 1892.  Due to pressure from the retentionists in the British cabinet.  The government agreed to pay the company for the administration of Uganda for the first three months of 1893.

In 1894, a British protectorate was declared over Uganda.  Originally, the protectorate was confined to Uganda, the company rule was withdrawn and the British took over direct colonial administration. The IBEA company surrendered its charter for a total sum of 250,000.

This was a great loss to the company for this only represented the original capital.  There was no compensation for development, the construction of administrative posts and security.

In July 1895, a protectorate was declared over the British East Africa (Kenya).  It was to be administered as an extra by the British consul- general in Zanzibar.  This completed the partition of East Africa on paper.

Difficulties faced by the IBEA Company

These difficult are the same reasons that explain the withdrawal of the IBEA Company.

    The first was the weak financial base.  The company started with only 250.000 pounds and yet much of this was consumed in capital expenditure on infrastructure like piers, roads and telegrams at Mombasa.  This brought no direct or immediate profits.

Severe restrictions. This led to poor performance of the IBEA Company.  By 1887, the company had been restricted by the agreement with the sultan.  The terms of the charter were not fair to the company for example duties on imports collected at the Kenya coast restricted to 5 %.  Subjects of foreign states were exempted from any taxation, the company had to accept freedom of trade within its area of operations and had to pay annual subsidy to the sultan.

Internal resistance.  This resistance was too costly to suppress for example the sultan and the people of Witu, the port at the mouth of river Tana during 1890-1893 prevented the company to use the river for navigation.  The Somali resistance also frustrated the exploitation of Ivory along the Juba river.  Other resistance came from coastal Arabs and Swahili slave traders, Masai, Nandi and Bunyoro.

Lack of rich exportable resources.  These were not available in Kenya and Uganda.  They largely depended on agriculture produce which is a slow process with long term profits and required expanded railway and road network yet not present by then.  Ivory was profitable but was both costly and slow to get hence profits were low.

Financial hard ships and Bankruptcy.  This was another problem faced by the IBEA Company.  By July 1891, it was bankrupt.  The company threatened to withdraw from Uganda.  What really destroyed the company's economic position was Mackinnon's policy of aggressive expansion far in land.  He hoped that the occupation and development of Buganda and the surrounding states would bring in large profits.  The occupation of Buganda was a financial gamble which did not come off not only did it bring in profits, but it brought additional non-profit making governmental responsibilities.  Uganda made the company annual loss of 50.000.

Internal corruption.  This coupled with inefficiency and mismanagement of the company ruined the activities of the IBEA co.  the company lacked experienced officers and the two year delay in recruiting a police force.  It took 2 years before De - Winton was appointed as permanent administrator in 1890.  But he was unsuitable because of his age and lack of vigour.

External rivalry.  This came mainly from other rival companies hence reduced the company's potential in profit making because of tense competition.  It forced rivalry from the German Witu Company and the G E A co especially over the coastal areas around the Kilimanjaro territories and over Uganda.

Establishment of direct and effective colonial administration.  This forced the British government to withdraw the I B E A company from Uganda in 1894 and Kenya in 1895.  The company had completed all that the government had wanted for example it set up police, administrative structures and road nets.  Therefore the company had provided the ground work necessary for easy take over.

Lack of developed road and railway network.  This made transportation costly and also difficult.  Hence the company had to spend a lot of money on construction of Murram roads and administrative centres. This delayed the economic exploitation exercise.

Lack of home support. The imperial government were not willing to use the tax payers money on the company budgets.

There were harsh and deadly tropical diseases that affected the administrators of such companies.

There was lack of trained manpower since there were few whites willing to come to east Africa.

There were also revolts from some African leaders such as Kabalega, Mwanga, Abushiri and chief Awich of Payera in Acholi land.

Huge cost of maintaining foreign armies for example the Sudanese Mercenaries in Uganda by IBEA Company.

Some officials were too harsh to be welcomed in east Africa for example Karl Peters.

There was also a problem of language barrier since most officials took too long to learn the languages of east Africa.

It's argued that the company's expenditure far exceeded her income she was getting much less, thus operating at a loss.  It's therefore from this basis that the company was later to withdraw.

In addition the area in which IBEACO operated had no mineral and profitable export commodities moreover the little trade available was not within easy reach of the coast.

The company was also affected by absence of large navigable rivers into the interior which made travel and transport of  goods slow.

Closely related, there was no proper link between the headquarters in Europe and the company officials on spot which led to unnecessary delays, wastage of time and misunderstandings.

It is also argued that the company had a weakness of inexpert officials many of whom lacked commercial acumen and had a very little knowledge of commercial activities.   It was therefore this poor leadership that greatly undermined the continued operations of the company in East Africa.

Lastly African resistances and conflicts also greatly undermined the existence of the company because in addition to being poorly formed, and grossly under capitalized, the companies resources were largely vested in solving conflicts and African resistances which worsened the financial stand of the company thus leading to withdrawal.

In conclusion, in as much as a number of factors have been advanced to account for the withdrawal of the IBEACO, it's imperative to note that the company came for a purpose which had by now been accomplished and it was high time the company withdrew.  It's therefore not surprising that the withdrawal of the company saw the subsequent occupation of the metropolis power.

 

Why chartered companies were withdrawn

They had become bankrupt and therefore unable to finance administration,

They had been personalized by their leaders.

They had become too corrupt because their leaders embezzled company funds.

Missionaries stopped sponsoring their activities e.g. IBEACO lost the financial support of Church Missionary Society (CMS)

They had failed to defeat all resistances e.g. IBEACO failed to defeat Kabalega of Bunyoro and the Nandi of Kenya.

Lack of exports to boost their revenue.

Home governments wanted to take over company work.

Some companies had finalized their activities.

Lack of exploitable resources e.g minerals forced the companies to surrender their rights or charters.

The Berlin conference 1884 had called for effects occupation (development) of colonies in Africa.

There was an increased European rivalry for territories in Africa

They had failed to extend European influence to all areas of their Jurisdiction e.g Northern Kenya and Northern Uganda.

Carl Peter's in the German Colonisation of Tanganyika

He was an active and aggressive, a trader and an imperialist in East Africa particularly in Tanganyika.  He formed a society for German colonisation in 1884 drawing its support mainly from the petty and rich middle class who were interested in the creation of settler colonies.  It was to organise, and finance expeditions to Africa and create empires for Germany.

Carl peters was also determined to see that German rule was established permanently on the African continent. He particularly wanted to prevent the siege of German settlement or any encirclement of German settlement in East Africa by British forces under Cecil Rhodes from S. Africa.  He was prepared almost at any length to achieve these aims and to use any means however ruthless.

He financed and protected missionary activities in Tanganyika for example the activities Berlin III missionary group.  This was a brainchild of the German colonisation society.  It laid a foundation for the further integration of Tanganyika societies.

Carl peters, German commercial and industrial groups exerted a lot of pressure on Bismarck and the German government to yield and accept the idea of colonisation.

In 1884 Carl peters started his activities aimed at acquiring colonies in Africa for German government.  With three companies, he arrived in Zanzibar under the disguise of searching for commercial prospects.  By November, he was on the main land.

He signed treaties with the chiefs of Usagaro, Ukami, Uzigna and Ungulu.  He even alleged that these chiefs handed over their sovereign or independence rights to the German colonisation society.  In 1885 when he returned to German, he persuaded the government to recognise these treaties.  These treaties were later used during the West African Berlin conference to claim justification for the effective occupation of these territories.

He was the founder of the German East Africa trading company in 1888.  This was to act as one of the German colonial agents in Tanganyika.  The company received a charter from the German government to protect her imperial interests in addition to commerce

Administrative centres were opened in Uluguru valley, one in Uzigua, two in Usagara, two in Pangani valley, one at the coast and Bagamoyo.  This later provided the basis for German colonial administration.

He controlled and monopolised commercial activities and the entire economy of the coastal towns for example he got permission from the sultan in 1886 to levy and collect custom duties.  This provided revenue for the company.

His company financed and provided the initial personnel for the administration of Tanganyika on behalf of the German colonial government.  For example the company took over control of the coastal towns.

He intimidated and put off rival imperial British East Africa company from Tanganyika.  He even secured already of friendships with Kabaka Mwanga of Buganda before the British intervened.  It was through the second Anglo-German agreement of 1890 that the German government persuaded him to withdraw the company there by leaving Uganda to the British.

Finally in 1890, Carl Peters G E A company failed to suppress local rebellions in the coastal areas.  This led to direct colonial government intervention. The charter was withdrawn there by marking the end of the company rule in Tanganyika.

Problems faced by the Company

The company failed to succeed in trade because the Germans were unable to compete with the long established Arab, Swahili, Indian, Nyamwezi and Izigua traders in the area.

The company persuaded settlers to grow cash crops that is plantation agriculture which would provide revenue to the company. But Usagara proved too unhealthy for Europeans and the German settlement scheme was abandoned.

Financial bankruptcy was yet another problem faced by the company.  At first a lot of money had been spent on settling up cash crop plantations but this scheme failed.  The crisis was also worsened by inefficient and corrupt administrators.

There was strong resistance from the coastal peoples.  There were three serious rebellions which attempted to drive out the Germans from Tanganyika.  One was led by Abushiri in the North coast area, another in southern port of Dar-es-salaam, Kilwa and Lindi while the third in Uzigua was led by Bwana Kheri.

It was this failure to suppress the local resistance that finally forced the colonial government to intervene and protect its interests in Tanganyika.

 

ACHIEVEMENTS OF COMPANY RULE IN EAST AFRICA

Chartered companies in East Africa had the following effects.

• They signed treaties e.g. IBEA Company signed many treaties with Mwanga, Ntare of Ankole among others.