Factors that Led to the Withdrawal of Chartered Companies in Africa

By the  end  of  the   19th   century,    most  chartered    companies     had  been   terminated     by  their Metropolitan     governments    that  had  given  them    charters   or trading   licenses.   Responsibility for   further    administration       of  those   areas   were   taken    over   by  the  home   governments. Different     reasons    worked    hand   in  hand    to   explain     the   withdrawal      of  the   chartered companies    from  Africa   by  1900
1.    Royal   Niger  Company    out  of  its  good  performance      in  what   the  British   wanted   in  West Africa,   its  Charter   was  terminated    and  British   Imperial    government    rookover   its services e.g.  it bad  pacified    the  areas,   promoted    trade   in Gold,   palm   oil  and  generally    had  turned Nigeria into  a British   asset.  In South  and  Central   Africa   Cecil  Rhodes'    achievements     were
great   and  the  British   government could        not  fail  to  take  over.   In  East  Africa   although    the
Imperial   British   East  African   Company    was    largely    a failure,    it helped   in bringing   Kenya
and  Uganda   under  the British   control.              
2.    The  companies    had  a number   of  differences    which.  propelled    their  home  governments     to take   over   their   work   e.g.   the   Royal   Niger    Company     had   oppressive     rules    and  harsh conditions    in trading   activities   whIch  were   resented    by  African   and  European    traders.   In
South and Central  Africa,  the British  South African  Company  oppressed  the Shona  and the Ndebele  traders  whose  trade with  the Portuguese  was  banned.  Their  trade  monopoly and mistreatment  of other traders generated  protests  from their home government  that later decided.the  closure of the chartered  company  activities  in central  Africa.
Another  weakness  was  that the companies  had  failed to stop slave  trade completely  e.g. Royal Niger Company  failed to stamp out slave  trade in Nigeria  and also Imperial  British East  African   Company   in  East  Africa  had  failed.   This  was  contravening    the  Berlin conference   theory  of  effective   occupation   that  agitated   for  stopping   of  slave  trade  to promote  stability  for effective  colonial  administration   in Africa.  The failure to stamp  out slave trade by specific  chartered  companies  made the home  government  to come and take over the control of the African territories.
There was pressure  from  other  European  powers  who  were  interested  in the area  where these  companies   operated    e.g.  the  Royal  Niger  Company   was  faced  with  the  French pressure  in West  Africa.  The  French  traders  had  been  outcompeted   by the Royal  Niger Company   and  its  leader  George  Goldie  who  established   stringent   policies  against  the French companies  forced the French to leave West Afnca  unhappy.
In Central Africa, the British South African Company  was faced with Portuguese  pressure. The Portuguese  from Mozambique  wanted to link their political  control  with Angola, their colony  in South West Africa  hence  they had to disorganise  the activities  of British  South African Company  across Central  Africa.
In East Africa,  Carl Peters  of the German  East African  Company  was interested  in taking over Buganda  and so was Lord Lugard and William  Mackinon  of the Imperial  British East African   Company.   Such  pressure   from  other  European   governments    made  the  home governments  withdraw  the chartered  companies  from Africa  and take over the direct administration  of these African  territories.
The financial problems:-
Companies   like  the  Imperial   British  East  African   Company   were  forced  to  withdraw because  of   the reduced  funds  and under  capitalisation.   Lord  Lugard  lacked  funds to run the company  and was forced to recommend  the British government  take over of, their area. This came about as a result of spending  a lot .of their money  in silencing of religious  wars
in Buganda  e.g. by 1891, its annual budget of 40,000 pounds  was oyer and it was saved by
financial  assistance  from the Church Missionary  Society  in the period between  1892-1893. This forced  the British  government  declare  a protectorate   over Buganda  in 1894. In  1895
Kenya  was  declared  a British  colony  leading  to the closure  of the Imperial  British  East
6.      Failure to locate the needed resources:
Some  companies   came  to Africa  following   the  mineral   discovery   in South  Africa  and imagined  that everywhere  in Africa,  there were  minerals  hence  leading  to the collapse  of many  chartered  companies  e.g. the Imperial  British  East African  Company  and Germany East  African  Company  operated  within  the poor  zone  of East  Africa.  Apart  from  Ivory, there  was no dependable  export  to keep these  companies  in business.  East Africa had no
minerals   and   it  was  greatly   inhabited   by  the  pastrolists    who  had  little  to  offer   in terms  of European    trade.
7         Lack  of inadequate    experienced    staff:
Most  of  the  chartered     companies      employed     local    and   foreign    staff    who   were    not experienced.      The   Africans     who   were   employed     were    illiterate   and   had   no   skills   in government    and  trade  Issues.  Similarly,    at the London   headquarters    of the  Imperial   British East African    Company,     directors     lacked    proper    coordination,      their   plans   were   often
contused,  unserious  and  quite   unreliable     William   Macknon    himself   was  full of  sheer  and       ..
mockery   (pretence)   and  one  British   scholar   had  this  to say;
"William    Mackinon    had  no  quality   for  pushing    an  enterprise    that  depended    on  quick decisions   and  smartness".
Mackinon   is blamed   to have  employed    staff  from  outside   East  Africa  without   much  regard
of  their   experience     and  qualifications      leading    to  the  poor   performance     of  the  Imperial British  East   African    Company.     A  similar    story   affected    other   chartered     companies     in Africa
8.       Poor  communication  system:
Generally,  the  whole   of the pre-colonial    Africa   had,  railways,   no  established    water  canals
and  even most   rivers   and   lakes   were   not  navigable.    Traders    used   local   paths   until  they established       some    feeder    roads    and   railway     lines    by   themselves      which    were    also inadequate.       These    problems      made    trade    expensive      which    resulted      into    improper coordination     which   created   inefficiency    hence   leading   to  the  closure   of  their  activities    in Africa.
9.         Lack  of home   support:
It  should    be  noted    that  after   they   had  been   given   charters    by  home   governments,      the traders    cook  over   the  whole   responsibility      of  keeping    law   and   order,   signing    treaties, carrving   out  administration,    looking    for  valuable     economic     ventures     for  their   home gl)" governments     All  these  were   done   at  the  company's     cost.   Because    of  such  a heavy   duty
without home  government   financial    support;    companies     like  the  Imperial    British   East
african company and German East African Company  had  to withdraw    from  East  Africa .
10. African hostility
Local revolts were also strong problems to chartered companies.    A fncan   chiefs   had  grown
 Rich because of slave trade eg Jaja of Opobo in niger   Delta   states.   Such  chiefs   were  at
  Loggerheads with the company agents who were busy  stopping    slave   trade   and  promoting legitimate  trade
In suppression of such revolts, companies    had  to  incur  high  costs   which   culminated    into their  bankruprcy    hence  leading  tv  their  closure     A  good  example    was  Abushiri    revolt   in Eastern Tanganyika    which hindered   the operation   of the German   East  Afncan   Company   in the area.   Such   resistances  were  common    in West   Africa   under   George   Goldie   and  even was   one   or  the  cause   of  the  Shona-Ndebele      uprising      against    Cecil   Rhodes    III Central Africa  in 1897  98 period.
11.    Presence of wild animals and hostile tribes:
This was because. they. operated. in tropical  rain  forests.  As a result,  a good number  of traders wer,e eaten by wild animals. More to this, some African tribes like the Nandi never welcomedthecompany     administratorsdue'to    their natural hostility against foreigners  and their long standing desire to keep their independence  intact
12.     Presence of diseases
AU the above  problems  coupled  with  tropical  diseases  were  a great  hinderance  to  the activities of these companies.  This caused their respective home governments  to come and take over the administration  of these areas under their control.
In conclusion therefore,  the factors that led to the withdrawal  of the chartered  companies were mainly grouped  into two categories  i.e. the companies  inherent internal and external weakness  plus the physical  and human nature  of Africans.  This  forced the Metropolitan governments  to come  and occupy  these  prepared  areas  in the name  of colonisation   by 1900.