THE GREAT DEPRESSION OF 1929 – 1933
Depression in economic means a period in an industrial nation characterized by low production and sales, unemployment, inflation, decline of trade etc. thus, Great Depression was the worst longest economic slump that featured the capitalist world following the horrors of WW1.
The economic Depression occurred in 1929 when in 24th October the US – New York stock market crashed and went until 1940’s.
CAUSES OF THE GREAT DEPRESSION ON 1929/1933
Qn: How did the Great Depression affect the East Africa and what were solutions to the problem?
Qn: Examine the effects of the Great Depression (1929 – 1933) on Africa
(a) The effects of WW1
The WW1 had destroyed much of European Industries, banks, infrastructures etc hence loss of European economies.
(b) The International Credit System
After WW1, USA became the world’s chief creditor to European powers. Much of Europeans remained dependent on USA for credit. However in 1929, there was financial panic in USA as American investors began pulling their money and demanding repayment of loans, thus the collapse of the New York stock exchange affected many West European powers.
(c) The nature of capitalist production system
Production under capitalism is so competitive hence a depression is inevitable since the production under capitalist system involves 4 stages namely:- Boom, Crisis, Depression and recovery.
(d) The outbreak of Russian socialist revolution of 17th October 1917
Following the Russian socialist revolution, the socialist powers refused to buy the goods from the capitalist powers. So, the capitalist powers had lost market for their goods hence over production.
(e) The protectionist policies adopted by the capitalist powers
IT led to economic recession i.e. they encouraged export of their goods but discouraged import of goods from other countries.
(f) The Great Crash of the New York stock exchange
The wall street crash of 24th October 1929. It is the time when there was financial panic in USA, many investors started to sell their shares thus causing price production.
THE GREAT DEPRESSION OF 1929 – 1933
IMPACT OF THE GREAT DEPRESSION ON AFRICA
Qn: How did the Great Depression affect East Africa and what were solutions to the problems?
As European powers were effected by the Great Depression, it became inevitable for Africa to be affected by the Great Depression due to the fact that African colonies were dependent on Imperialist European.
(a) Fall of commodity price especially agricultural output
The price depressed made African farmers get limited benefit from their cash crops like cotton, sisal, coffee, tea, etc.
(b) Fall of Government revenue
eg. Hut tax and poll tax which in 1929 – 1930 was £ 750,000 dropped to £ 450,000 in 1931 – 1932.
(c) Mass unemployment
The fall of prices in agricultural products such as coffee and cotton and the reduction of wages to workers led to many migrant labourers to be unemployed (reduced from work).
(d) Intensive exploitation
The economic depression led to establishment of agricultural schemes and projects eg in Tanganyika, the introduction of Groundnuts schemes in Nachingwea, Kongwa and Urambo.
(e) It led to the rise and consolidation of African consciousness
due to formation of social and welfare associations which united Africans against colonialism eg. In Tanganyika, the Tanganyika African Association (T.A.A.) was formed in 1929 by Ali Mponda.
MEASURE/SOLUTIONS TO THE GREAT DEPRESSION
(a) Introduction of grows more campaigns among Africa population.
In Tanganyika & Nigeria peasants were forced to grow move cash crops eg. The destocking of cattle introduced in sukuma land to force people produce cotton, Nachingwea groundnut scheme, Uruguru terracing scheme.
(b) Colonial Education policy changed
to allow agricultural school to be established in Africa to train agricultural instructors e.g Ulatiguru & Nyakato in Mwanza (TZ), Yaba High College in Nigeria and Makerere in Uganda etc.
(c) Extension of colonial infrastructures
to facilitate transportation of Raw materials from producing areas to the coast for export e.g in 1928 the branch from Tabora to Mwanza and from Moshi to Arusha was build.
(d) Establishment of import substitution industries and processing industries were established in Africa e.g Coffee refineries and cotton ginneries were established to reduce the bulky of raw materials for export.
(e) Expenditures on all Government projects were reduced e.g The budget for welfare services such as water supply, housing, hospitals etc. were cut off.