Building Up Goodwill: British Business, Development and Economic Nationalism in Ghana and Nigeria, 1945–1977

Contemporary sub-Saharan Africa presents a puzzle to many observers, and has generally been perceived as a hostile environment to modern business. It is indeed difficult to make sense of politics and business on the continent without understanding how African colonies turned into independent countries since the late 1950s, and how they evolved into postcolonial states from the 1970s onwards. Imperial business was witness to these fundamental changes in African societies and deeply affected by it. Although some economic indicators in the 1970s were relatively favorable (many commodity prices were high), this was the decade when the severe decline of Africa, both in relative and absolute terms, began. While the colonial powers had left, imperial business stayed behind and forged close links to African political elites in the 1950s and 1960s. By the 1970s, they were challenged, both in Africa and internationally, as being part of a new form of colonialism. Foreign companies became deeply involved in the upheavals and challenges in African countries as they learned to negotiate the treacherous political environment before and after independence.

My PhD dissertation is a study of companies’ quest for legitimacy in times of political transformation. In the case of British business in Ghana and Nigeria, these companies were, moreover, relatively disengaged from their host societies, as they had previously been able to operate within an imperial culture that allowed them to ignore many dissatisfied voices. As firms began to adapt to the new political framework that emerged as the British Empire withdrew from its West African colonies, they forged new contacts with the new governments and its local workforce. Ghana became independent in 1957 and Nigeria followed three years later. Throughout most of the 1950s and 1960s, a climate of optimism prevailed, but by the 1970s the relationship between foreign business and host governments came under severe strain, the roots of which dated back to the 1960s and in some cases even the late 1940s and 1930s. What made the 1970s such an important decade was the convergence of local and international trends. Within African states redistributional struggles could no longer be mitigated effectively, and a distinctly African version of a modern state fully came into its own: the postcolonial state. This was a state fundamentally based on African traditions of rule and wealth accumulation, despite appearing in the guise of a modern constitutional state.

Internationally, criticism of multinational corporations was ripe, and influential books such as Walter Rodney’s “How Europe Under-developed Africa” were widely read.¹ Even within international business studies an important scholar like Stephen Hymer, whose doctoral dissertation had advanced the field substantially, converted to neo-Marxism and condemned the extractive nature of multinationals.² Governments in Latin America, Asia, and Africa demanded greater control and ownership over foreign companies operating in their territories. In this climate, companies that had weathered the storms of decolonization now found themselves faced with a global wave of expropriations quite unlike anything that had occurred before. It has been widely perceived as an attempt of developing countries to take control of foreign investment. However, the experience of British companies in Nigeria and Ghana tells a different story. Most managed to retain control—although three of the companies researched lost parts of their operations. From their archives and a close analysis of the actual practice and impact of the specific form of legislation that was prevalent in Africa, it becomes clear that multinationals were far from the only, or even the primary target in this “battle for control”. Throughout the 1950s and 1960s, they had successfully positioned themselves as partners in African development strategies, and although this defense was eroding later on, in the 1970s they were fairly deeply embedded in the business environment and much of the attacks against foreign investors just served to reinforce this trend by increasing the collaboration with African partners.

Scope of This Study

In my doctoral dissertation, I have analyzed corporate responses to deal with political and social transformation in culturally and geographically distant host economies. For this I chose five British...