Africa’s Long History of Trade and Markets
Market reforms in Africa can be thwarted because of propaganda asserting that markets are a Western import. Notwithstanding the currency of this belief, it is patently absurd. Markets flourished in Africa prior to colonialism, and wherever they are repressed, the result is social immiseration, as economist William Hutt points out in his pathbreaking study, The Economics of the Colour Bar. Merchants in precolonial Africa organized large-scale trading networks that spanned several regions.
According to Alberta O. Akrong (2019), the diversity of African trade transacted on land and waterways enhanced the continent’s accessibility to strategic resources. Like elsewhere, in precolonial Africa, Africans designed mechanisms to enable commerce. Gareth Austin in his research documents a litany of such institutions, including rotating credit facilities and secret societies. Chronicling the primacy of markets in precolonial West Africa, he offers a captivating account of trading networks:
Among the Hausa diasporas that conducted most of the long-distance trade of the eastern half of West Africa, trading caravans moved between market-places, at which the itinerants would stay with landlords from the same ethnic group, who would introduce them to local trading partners and generally assist them to make contracts. Credits would also be available between members of the same diaspora: “moral hazard” being reduced by common membership. It was reduced also by common religion, which in the case of the Hausa diasporas … was Islam.
Ethnicity and religion featured prominently as levers of trade in precolonial Africa. For example, unlike the Hausas, who professed Islam, the Aro community employed indigenous religion as a tool to legitimate trade. Undeniably, markets were crucial in precolonial Africa, but we readily admit that they were not undergirded by impersonal trust. The arrangements in precolonial Africa reflect what economists describe as “lim
Article from Mises Wire