Why did most African colonies fail to make a profit and why would Europeans keep them?
In: Economics
The simplest way was resource extraction: many colonies had valuable raw materials for the colonizers to exploit.
But the other, perhaps more important, aspect was that colonies were captive markets: the people living there could be forced to only buy goods made by the colonizer.
It’s hard to generate profit when dealing with income from very physically diverse locations. But they provided tactical resources that themselves were worth it (rubber, gold, slaves, etc). And it was a situation that if you didn’t have the land then another power would take it – and as a European nation you’d be worse off. So even if you lost money overall it was a needed investment.
We’ve invested so much. We can’t throw our investment away!
These people cannot govern themselves, they need us.
Our enemies might take advantage of our withdrawal or replace us.
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