R E S T R I C T E D FL £ ?Y RETUN eWVr t No. E.A. 45-b t g u ~RE"-,... u DEESK WMTHIN i 0NE W.YEEK7 Public Disclosure Authorized This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized THE ECONOMIES OF BRITISH EAST AFRICA Public Disclosure Authorized March 7, 1955 Public Disclosure Authorized Department of Operations Europe, Africa and Australasia CURRENCY EQUIVALENTS £ 1 million U.S. $2.8 million 20 EA shillings - i£1 - U.S. $2.80 100 EA cents 1 EA shilling - U.S. 14 cents U.S. $1 % 7.14 EA shillings = 714 EA cents U.S. $1 million - £357,143 THE ECONOMIES OF BRITISH EAST AFRICA TABLE OF CONTENTS Page BASIC STATISTICS . CHARTS . INTRODUCTION AND GENERAL CONCLUSION ..... THE ECONONY OF-KENYA . 1 Conclusions . 16 THE ECONOMY OF UGANDA. 18 Conclusions . 29 THE ECONOMY OF TANGANYIKA . 31 Conclusions . .. .. 41 APPENDICES MAPS BasiciStatistlcs Kenya Uganda Tanganvika Area (square miles) 225,000 94,000 363,000 Ppulation: Total 5,700,000 5,400,000 8,000,000 of which: Africans 5,500,000 5,300,000 7,900,000 Asians 130,000 50,000 75,000 Europeans 42,000 6,000 17,000 La_tUoDA Income:* Total 100 100 90-100 (E million) of which: Agriculture 45 60 60 of which: African 25 55 45 a) subsistence economy (21) (25) (33) b) money economy ( 4) (30) (12) Non-African 20 5 15 Cash Crops for Exports (1953) (E million) Sisal: Non-African 2 - 12 Coffee: African - 9 4 Non-African 7 3 1 Cotton: African 1 17 5 External Trade (1953) (£ million) Total Exports 19.5 33.4 35. Total Imports -4 Z5.7 _9". Balance - 28.8 + 7.7 + 7.5 Dollar Exports 1.8 2.0 6.3 Dollar Imports 2.6 1.0 2.0 Dollar Balance - 0.8 + 1.0 + 4.3 Public Finances Budget (1953) (E million) Government revenues 21.4 17.7 14.7 Government expenditures 22.9 17.4 14.7 Balance - 1.5 + .3 - * Crude estimates Basic Statistics (Cont.) Kenya Uganda Tanganvika 1953 Structure of Government Revenues Customs and excise duties 35% 24% 29% Export duties 1% 24% - Income tax 29% 10% 29% Others J5 42% _L21 Total 100% 100% 100% Public Debt (£ million) Total direct debt 35.9 9.9 10.0 Net direct debt (after deduction of accumulated sinking funds and money relent) 25.5 0.3 8.0 Annual service on net direct debt (1953) 1.2 .5 Net direct debt service ratio to Government revenues 6% - 3% Contingent liabilities for EAHC (jointly and severally guaranteed): Amount authorized (but not yet fully contracted): 72.7 BRITISH EAST AFRICA TOTAL EXTERNAL TRADE* 1(MILLIONS OF £ ) 150 150 YEARLY 100 100 IMPORTS%,,,,., 50 , ,50 50 __ _____________ __ _ EXPOR~;EPOTs_IMPORTSI . , 5 0 *Includes re-exports BALANCE OF TRADE (MILLIONS OF £) +30 + 0YEARLY.t3 t30 +20 _ +20 + I 0 ~~EXPORT SURPLUS%, +10 o-+10 +1 0 0 -10 -10 IMPORT SURPLUS -20 -20 IMPORTS BY TERRITORIES (MILLIONS OF V) 60 _ 60 YEARLY KNa ~ TAN GAN YIKA 40 40 20 / ,___, '~~,,, , 20 _______- . _ _________ I ' 0UGANDA 0 0 EXPORTS BY TERRITORIES (MILLIONS OF L) 60 60 YEARLY UGANDAm-.. 40 40 20 ~~~~~TANGANYIKA . __ 20 20 20 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50 '51 '52 '53 '54 12/13/54 No.965 IBRD - Economic Staff BRITISH EAST AFRICA DOMESTIC EXPORTS OF MAJOR COMMODITIES- 1938-39,1948, AND 1951-1953 TANGANYIKA UGANDA KENYA QUANTITY VALUE (MILLIONS OF CENTALS) (MILLIONS OF £) 1.5 ...... * 30 1.0 20 .5 10 0 (THOUSANDS OF LONG TONS) (MILLIONS OF £) 200 777 AL ~~~~~~~~~~~40 150 7 30 I 0 0 ~~~~~~~~~~~~~20 50 I 0 0 -~~~~~~~~~~~~~~~~~~~0 '38-'39 1948 1951 1952 1953 '38 -'39 1948 1951 1952 1953 AVERAGE AVE RAGE 12 /13/54 No. 966 IBRD- Economic Staff BRITISH EAST AFRICA GOVERNMENT REVENUES AND EXPENDITURES (MILLIONS OF L) 40 KENY_ 40 Including emergency fund expenditure ,/ \ 30 - 30 20 RVNE 20 REVENUES-5z/ ~~~~Excltiding ^ erner~~~gency fund expenditure I10 _ o10 _~~~~~~~~-- ~- ,~ EXPENDITIURES 0 !'O~~~~~~~~~~~~~~ 30 30 20 - 20 REvENUES-*:/ 10 . -/'f-10 - ' e-EXPENDITURES _ 0 30- 0 TANGANYIKA 20 20 I0 o REVENUESt ~-- '4EKPENDWTURES 0 j I I II I - ot 1945 1950 '54-' 1938 1940 (Ending *First six months of 1954 at annual rate June 30) PLANNED 12/13/54 No1.967 I BRO - Economic Stoff THE ECONOMIES OF BRITISH EAST AFRICA Introduction and General Conclusions 1. British East Africa comprises the territories of Kenya, Uganda and Tanganyika. Together they make up an area of widely varying climate and topography and lack any natural unity. East !frica lies north and south of the Equator and stretches inland over 700 miles from the Indian Ocean to the Belgian Congo. It is the size of Western Europe, but large tracts of it are infested with tsetse fly or are too arid to support life. In it there live less than 20 million Africans, a quarter of a million Asians and some sixty-five thousand Europeans. Each of the three terri- tories has a different political status: Kenya is a Crown Colony (except for the coastal strip which is a Protectorate), Uganda is a Protectorate, and Tanganyika a U.N. Trust Territory. 2. Some sixty years ago, the British moved into Kenya and Uganda with the construction of a railroad line from the coast to Lake Victoria. The Highlands of Kenya, deserted at the time the British came, soon attracted settlers, while in Uganda the Protectorate agreements delimited very restrictively rights of occupancy and still more of ownership. Kenya has a sizeable element of settlers; Uganda has not; Tanganyika falls in be- tween. Until 1917 it was a German colony, then fell to the United Kingdom first as a mandate then in 1946 as a Trust Territory under the United Nations. The three territories have important Asian communities, mostly engaged in trading, and these communities are expanding both as a result of natural increase and of immigration. 3. As in every multi-racial society, tensions inevitably arise which range from economic rivalry to conflicts of traditions and civilizations. These tensions have been particularly acute recently in Kenya where a localized African open revolt, '"lauMau," aims at throwing Europeans out of the country. This revolt is progressively coming under control and a campaign has been aunched to win also the Africans' "hearts and minds." In Uganda a constitutional crisis, for which solution appears to be in sight, has for the last year brought the native ruler of the main province in opposition to the British Administration of this territory. Tanganyika enjoys the best social and political relations. The UTnited Kingdom's declared policy for East Africa is to prorote economic developrent and political advancement leading to the elimination of racial discrimination. 4. The three territories are constitutionally independent of each other and each runs its own political, economic and financial affairs. However, they face comrmon economic problems because they are all some- what similar under-developed areas. Since they all have British Admini- strations, they tend to tackle their problems in sim41ar ways, but except in limited-fields'of the Fast Africa High'Commission, they do not tackle them in common; r Through'the High Commission, however, they do collab- orate over a limited'range of common services, of which the railways and harbors, and the posts and telecommunications are the most important. The High Commis.qion, set up in 1948, consists of the Governors of the three territories and the East Africa Central Legislative Assembly, which includes government officials8and members of the Legislative Assemblies of each territory as well as members nominated to represent particular interests. The.High Commission has no resources of its own other than those attributable to the Railways and Harbours and Posts and Telecommunications Administrations, and the borrowing it performs on behalf of these services is severally and jointly guaranteed by the three territories. 5. Many economic links attach the territories.to the United Kingdom. East African currency, which is common to the three territories, is tied to the British pound: it is backed 100%o by the sterling holdings of the East African Currency Board and is automatically convertible into sterling at par. About 60% of the foreign trade is with the United Kingdom and the rest of the sterling area. Most of the inflowing private capital comes from London and the United Kingdom Gov-ernment helps in the financing of their public development by giving East African countries access to the London market, and by making them direct grants and loans under Colonial Development and Welfare schemes. All public debt of the three territories is in fact in sterling. In addition to' development aid, Kenya is cur- rently receiving financial assistance for.meeting the costs of her Emergency situation. Substantial amounts of East African short-term capital, on the other hand, originating either from public funds and reserves or from demand deposits of commercial banks, are currently in- vested in London. ' I 6. The economies of the three territories are all primar-ily agri- cultural, but there are striking differences in the relative importance of African and.European producers. In Kenya sisal and coffee are pro- duced on large European estates. European farms produce a large surplus of grains for African consumption end dairy farming is largely in European hands. In Uganda cotton and coffee, the main export crops, are produced almost entirely by Africans on small family'plots.