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.
3. 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.
4. 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.
5. 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.