3.1 Nigeria’s Economic Dynamics

Colonialism is a major feature of the economic history of Nigeria. Britain eventually gained control of Nigerian administration. After independence, the Nigerian economy seemed very promising. Many saw Nigeria, with 15% of Africa‘s population, as an emerging economy. However, this potential never materialized. A series of unfortunate political and economic events have stalled Nigerian growth. The country still plays an important economic role in the world, especially as a producer of fossil fuels.

Nigeria during the Atlantic slave trade

During the precolonial period there is already direct contact with Europeans who operate in port cities such as Bonny as well as indirect contact though the purchase of European goods through trade as well as the production of products intended to be sent to port cities. This commerce of course was added onto the slave trading networks which had existed since around 1500. As a result of a meeting of European powers in Berlin in 1884, the interior of Africa was divided into colonial possessions of European countries. The English move into the land of the Igbo followed shortly thereafter, covering the period from 1889-1914. And, in 1914, northern and southern Nigeria were united for administrative purposes into a single British colony.

History of tax in Nigeria

The European struggle to establish communities and trading posts on the West African coast from about the mid-17th century to the mid-18th century was part of the wider competition for trade and empire in the Atlantic. The British, like other newcomers to the slave trade, found they could compete with the Dutch in West Africa only by forming national trading companies. The first such effective English enterprise was the Company of the Royal Adventurers, chartered in 1660 and succeeded in 1672 by the Royal African Company. Only a monopoly company could afford to build and maintain the forts considered essential to hold stocks of slaves and trade goods. In the early 18th century, Britain and France made inroads on the Dutch hold on West African trade; and by the end of the French Revolution and the subsequent Napoleonic Wars (1799–1815), Britain had become the dominant commercial power in West Africa.

The slave trade was one of the major causes of the devastating internecine strife in southern Nigeria during the three centuries to the mid-19th century, when abolition occurred. In the 19th century, Britain was interested primarily in opening markets for its manufactured goods in West Africa and expanding commerce in palm oil. Securing the oil and ivory trade required that Britain usurp the power of coastal chiefs in what became Nigeria.

That was an unplanned consequence of the creation of the Sokoto Caliphate in 1804. At its peak, the Sokoto Caliphate was the most populous state in Africa. The Caliphate occupied most of north-central and north-west Nigeria, as well as parts of neighboring countries of nowadays Nigeria. Internal peace and market integration was a basis of the commercial prosperity of the Caliphate. Hausa merchant diasporas ran an extensive export-trade network and the state had regular increase of the labour supply through the importation of “pagan” captives as slaves. Many cities became bigger, especially, its commercial capital Kano, which was the biggest manufacturing center in the region. The clothing was exported from Kano to all over West Africa. The formation of the Sokoto Caliphate made Islam a mass rural religion for the first time in the region. The Caliphate introduced Islamic taxes that facilitated economic expansion.

Formal “protection” and—eventually—colonization of Nigeria resulted not only from the desire to safeguard Britain’s expanding trade interests in the Nigerian hinterland, but also from an interest in forestalling formal claims by other colonial powers, such as France and Germany. By 1850 British trading interests were concentrating in Lagos and the Niger River delta. British administration in Nigeria formally began in 1861, when Lagos became a crown colony, a step taken in response to factors such as the now-illegal activities of slave traders, the disruption of trade by the Yoruba civil wars, and fears that the French would take over Lagos. Through a series of steps designed to facilitate trade, by 1906 present-day Niger was under British control.