Hi, and welcome back to the course African development from the past to the present. My name is Ellen Hillbom, and I'm a professor in economic history at Lund University. I'm now starting the third module of the course, which I have termed the Colonial Era. It is a term that I use somewhat freely as the module starts in the decades before territorial occupation and end before political independence. It is important to keep in mind during this module that colonialism should be understood as a process that changes its characteristics over time, and not a onetime event. This first lecture connects to the last lecture in the previous module on the pre-colonial era. Then I talked about early trade in general, and specifically the effects of the slave trade. Now, I will talk about the changes that happened to Africa's participation in the international market after the fading out of the trans-Saharan trade on the slave trade. During the second half of the 19th century, there was an increase in new export goods, primarily agricultural products. This lecture is on how this change came about, what it meant for the economic development on the African continent, and which African states profited from the new opportunities. Before we dive into the changes that took place in Africa, I would like to say a few words about how international trade generally change during the second half of the 19th century. The change was based on a technological innovation, the steam engine. The innovation of the steam engine some 100 years earlier in Britain, was the start of the first Industrial Revolution. While industrialization primarily spread in Europe and North America during the 19th century, and not in Africa, this technological change had implications for Africa in several ways. First, industry needed certain commodities produced in Africa, such as palm oil and rubber. This created an international demand for such exports. Second, the economic growth associated with Industrial Revolution resulted in increasing incomes for certain groups in Europe. Better standards of living combined with growing urbanization, drove a general change in consumption patterns. This resulted in an increase in demand for agricultural goods, such as cocoa and groundnuts. Third, the innovations using steam power included steamships and trains that made transportation of goods generally easier, cheaper, and more reliable. The so-called Transport Revolution facilitated an overall increase in international trade from the 1870s. This also affected trade to and from Africa. The new demand for agricultural products were most apparent in West Africa, and it was African small-scale farmers who dominated the production. The chief export products from West Africa were palm oil, rubber, groundnuts, cocoa, honey, and beeswax. The goods came from different systems or production with variations in labor input, use of natural resources, capital investments, technological levels, and so on. It is interesting how existing West African systems or production adapted and reform themselves in response to the increasingly profitable production of internationally marketable crops. Let us look at a few examples. Palm oil was an ingredient in soap and margarine, and was increasingly used as a lubricant in machines. In 1810, West Africa exported 1,000 tons per year to Britain. But this export increased, reaching an annual average of 50,000 tons between 1860 and 1890. To encourage production and to control the trade, the European trading companies established regular contacts with the African producers. To the small-scale farmers, palm oil production had advantages. First, it required no capital investment at the initial stage because the palm grew wild. Second, it did not require much labor, which was generally in short supply. Third, because of the difference in seasonality between crops, palm oil production was no threat to the production of food crops. The other major export crop was groundnuts. This plant came from the Americas in the 16th century. The oil was used in soap production, and in the 19th century, France was the chief trading partner. From the 1830s, there was a significant and increasing export. Gambia exported 47 tons of groundnuts in 1835, which by 1851 had increased to over 11,000 tons. Groundnuts had been cultivated for a long time, and was already integrated in the existing agricultural systems or production. Just like palm oil, groundnut production did not require big initial investments, but it coincided with the agricultural seasons or food crops, which was a downside. Finally, crude rubber was another expanding export crop used for tires in the new European and American car industries. This export started before colonization, and then continued a couple of decades into the 20th century when rubber began being produced artificially. Northern Guinea, today's Ghana, the coast of Congo, and Angola were places chiefly affected by the export boom. By 1891, Ghana had become the third largest producer of natural rubber in the world. In societies that had previously based their wealth on slave trading, the political elites sought to find new sources of income. Plantations were set up to produce, for example, palm oil or cocoa, often using bonded labor. But the materials needed for producing the new export crops, such as rubber and cocoa harvested from trees were readily available, and could be gathered or cultivated by many people. This encouraged bigger groups of producers, and the income from the new export goods was passed on to a larger proportion of the population. This development potentially resulted in a more equitable distribution of incomes among the old slave communities, and social stratification was somewhat reduced. But trade is not only about exports, also imports into Africa grew primarily cloth, firearms, alcohol, and metals. The existing African handicraft manufacturing sectors could not compete with a price for European industrial products. There was also a competition between the growing mining industry, the agricultural sector, and the manufacturing over the scarce labor force. High prices and lack of labor undermined the African production, and open up for more imports from Europe. Competition affected the production near the coast the most, while high transport costs became a trade barrier protecting inland production. At the same time, a positive development was that increasing incomes among a growing share of the population and some urbanization created a demand for African product. A general problem for the survival of African manufacturing in the midst of increasing international trade or too slow technological development in the sector. An exception was the Kingdom or Merina on Madagascar in the mid 19th century. There was an intensive and highly productive rice cultivation, and the profitability in agriculture enabled the imperial state to initiate an industrial venture. It started textile production, then went on to manufacture small arms, and even began to refine agriculture products such as sugar and tobacco. Because of the lack of sufficient capital for major investments in machinery, the system or production relied on labor intensive methods and to some extent, slaves were used. Eventually, the industrial experiment failed. While low wages kept the labor costs down, it prevented the development of a domestic market for the industrial products. On top of producer prices, infrastructure was bad, and transport costs is high. All in all, there was no real profitability. The economic progress of existing systems of production and growing wealth in a number of communities led to changes in social-political structures, state formation, and political cooperation. While the segmented political systems remained, the most centralized sociopolitical systems became increasingly common and more developed. One example of such an African state was the state of Asante in Ghana. During the 1870s, it controlled an area equivalent to one-third of today's Ghana, and collected tribute or taxes in an area three times larger. At the time when the European powers eventually started their colonial project, Africa was neither poor nor isolated. Instead, several independent African societies were active and quite successful in the international economy. This economic progress may have been one reason for the growing European interest.