CHAPTER XI

THE FINANCES OF NIGERIA

On June 30, 1899, a Treasury Minute informed the Royal Niger Company of the intention of her Majesty’s Government to revoke their charter. At the end of 1899 Sir Frederick Lugard proceeded to Africa to take over the Niger Company’s territories in the name of Great Britain. On January 1, 1900, Crown Colony Administration was established in the Niger Company’s territories, following its similar establishment in the Delta, which had taken place some years previously.[70] In February 1902 the Government condescended for the first time—in the face of public pressure—to publish a report by Sir Frederick Lugard, _dated London, May 1, 1901_. The report, which is very interesting, but in many respects incomplete, notably as regards finance, only brings us down to March 31, 1901, so that, although we are now well on in the third year of Crown Colony Administration in Northern Nigeria, this single report is the measure of the confidence which the Government sees fit to repose in the British people, concerning the direct responsibilities they have acquired over some twenty-five million natives of Africa.

There are several reasons why the public should not rest content with such meagre information. The first reason is financial. The expenditure of the two Protectorates—Northern and Southern Nigeria—is assuming very large proportions, a heavy load of debt weighs over them, and not only is there not the slightest sign of an effort to wipe off that debt, but almost every month that passes sees an extension of liabilities. The present condition of our national finances does not justify a continued attitude of indifference towards the expenditure of public funds on an increasing scale in Nigeria. On the other hand, our main object in West Africa being what it is, viz. commercial in nature, there is extreme unwisdom, from the ordinary business point of view, in neglecting to ascertain how the largest and most important of our estates in West Africa is being managed, and if the outlay is giving now, or is likely to give in an appreciably near future, those returns which the public is justified in expecting.

What, then, are the facts as to the financial situation of Northern and Southern Nigeria? In the first place, there is the debt of £865,000 incurred by the Government in buying out the Niger Company. This debt is, while it exists, a bar to progress, and at a Conference held in London on September 20, 1900, we find Sir Ralph Moor, Commissioner for Southern Nigeria, admitting the fact. When a speaker at that Conference urged that more should be spent on technical education in the Protectorate, and that the necessary amount might be paid out of the surplus revenue, Sir Ralph Moor quickly retorted that they had no surplus revenue, but were “in the unenviable position of owing her Majesty’s Treasury £800,000.” So much for the debt, and the obstacle to desirable improvements which its existence entails.[71]

The debt notwithstanding, the administrative expenditure of Southern Nigeria steadily increases. In the year 1899-1900[72] it reached the figure of £176,128,[73] being an increase of £29,383 over the preceding year, and exceeded the revenue by £12,000. No figures are yet available of the expenditure of Northern Nigeria since the substitution of the Crown for the Niger Company in the _rôle_ of Administrator, but a reference to the estimates of March 31, 1902, shows that Northern Nigeria received a grant-in-aid of £88,800 in 1900-01, and another of £280,000 in 1901-02, which includes the provision of £200,000 for the West African Frontier Force voted in 1900-01. We are, therefore, confronted with a minimum expenditure for Northern Nigeria in two years of £368,800. At this rate it is difficult to see how Nigeria is ever to become self-supporting. Such an enormous expenditure could only be warranted by an extraordinary development in trade, or by the creation of means of communication for that development, to be looked upon in the light of expenditure on capital account. It is all very well to call it “Imperial expenditure.” Of course it is “Imperial” expenditure, and so is every penny spent in the furtherance of British trade abroad “Imperial.” What we have to try and form an opinion upon is whether the administrative expenses of Nigeria are in any way proportionate to the interests which the Administration is supposed to be promoting there. If it is, well and good; if it is not, reform is required.

The relation of the expenditure to the trade of Nigeria is comparatively easy to establish. The total trade (excluding specie) of the Niger Coast Protectorate in 1898-99 amounted to £1,477,398, and the total trade of Nigeria—that is, the Niger Coast Protectorate plus the territories of the Niger Company—in 1900 (excluding specie) was £2,113,878. If we deduct, therefore, the one set of figures from the other we can arrive at a close approximation of the trade done in the former Niger Company’s territories included since 1900 in the Protectorate of Nigeria. The trade of the Niger Company’s territories in 1901 was, therefore, roughly £650,000, of which it is quite safe to assume that Northern Nigeria did not produce more than one-third, if it produced that, the bulk of the trade being confined to the Niger Company’s territories in the Lower River. The trade of Northern Nigeria would thus be represented by some £216,660 out of the total of £650,000. Assuming, for the sake of argument, that it rose in 1901 to £250,000, the total for the two years 1900 and 1901 would be £466,660. Now Northern Nigeria, as already stated, received for the same period £368,800 from the Imperial Exchequer. Pursuing the same method of illustration for the export trade as for total trade, the export trade of the Niger Company’s territories works out at some £360,000, of which, say, one-third from Northern Nigeria, or £120,000. Putting it down at £140,000 in 1901 gives a total of Northern Nigeria’s export trade, or, in other words, Northern Nigeria’s producing capacity for the two years mentioned of £260,000, so that Northern Nigeria is in the disastrous financial situation of spending more than it produces. The one-third basis of calculation is a large and generous one, and Northern Nigeria’s share of responsibility in the debt is not included in the reckoning. The position then, so far as Northern Nigeria is concerned, is unmistakably clear. Northern Nigeria is at present a financial burden to the Empire. Eight years’ experience of Crown Colony Administration in the Niger Delta, where the machinery set up is not nearly so elaborate as in Northern Nigeria and where the natural exploitable riches are far greater, is hardly calculated to cause feelings of confidence as to what eight years of a similar system will lead to in Northern Nigeria. In the three years ending December 1899 the Niger Delta (excluding therefrom the Niger Company’s territories) produced a trade which averaged in value £1,800,000, of which over £1,000,000[74] represented exports. Under the Crown Colony system, with its expensive machinery necessitating taxation to keep up, its military expenditure, and the absence of all commercial co-operation in the Administration, the value of exports has only once (1893-94) managed to rise above £1,000,000, while with that one exception the highest and lowest figures have been £844,333 and £750,223 respectively, and the total volume of trade for any given three years has never reached the average figure of £1,800,000. The totals of the three years prior to 1900 were respectively £1,441,383, £1,389,922, and £1,507,288. Making every allowance for the fall in the market price of certain products during recent years, which, by the way, has been to some extent counterbalanced by the increased export of new articles, the conclusion to be derived from these figures is that the Crown Colony system in Southern Nigeria has not yielded results which the country has the right to expect, and the moral is that, whatever may be the position of affairs in other British possessions in West Africa, Englishmen should really pull themselves together and seriously consider whether the brilliant future which Nigeria should have in store for it is to run the risk of being compromised just for want of a little courage in facing the facts as they are.