Category: Economics

The Indian diaspora is said to be over 30 million. While the popular tendency is usually to talk of the diaspora in the West (which is recent in formation), Indians have played a far more important role in East Africa if we take a long historical view of the past 150 years

Thomas Sowell’s very fine book “Migrations and Cultures” is an eye-opener in this respect as it sheds a great deal of light on the Indian engagement in Africa since the middle of 19th century. This short post dwells briefly on the Indian contributions in East Africa (particularly Uganda / Tanzania / Kenya) drawn mainly from Sowell’s work.

Let’s take the Tanzanian island outpost of Zanzibar off the African east coast. While the Indian presence in Zanzibar today is not much to write home about, this island was one of the first African territories to be settled by Indians. There was a phase in history when Zanzibar was practically run by Indians. In 1860, a report mentioned – “All the shopkeepers and artisans at Zanzibar are natives of India”!

The numbers of Indians in Zanzibar weren’t great. Only about 5000 in the 1860s. But nearly all foreign trade was conducted by them. As of 1872, an American trader owed Indian financiers in the Island $2MM and a French firm owed these financiers at least $4MM.

While in mid 19th century, Indian presence was largely in Zanzibar and some coastal areas of East Africa, the interior was opened up when the British constructed the great railroad that connected Mombasa port in Kenya to Lake Victoria in Uganda in late 19th century. 16000 laborers were involved in the construction of this great pioneer Railway project. Of which 15000 were Indians.

What’s interesting is that these coolies were pretty expensive compared to the indigenous African labor. Yet the expensive indentured Indian labor from thousands of miles away was preferred as they were more valuable and productive than locally available African labor. The railroad construction proved the trigger for much of the Indian migration to the African mainland – particularly Kenya and Uganda. Much of the migration was from Gujarat.

The Indian settlements in these parts were a momentous event in Africa’s long history. In Sowell’s words, the Indian shops in East Africa were the first commercial retail establishments ever encountered by these African villages in their entire history. The Indians in East Africa were the first to import / sell cereal. Sowell credits them for “transforming East Africa from a subsistence and barter economy into a money economy” in the late 19th / early 20th century.

As an example Taxes in Uganda until late 19th century were paid in kind. Starting in 20th century they were paid in money and the currency was rupees!

In 1905, a report in Kenya declared – “80% of the present capital and business energy in the country is Indian”. In 1948, Indians owned over 90% of all cotton gins in Uganda. In the 1960s, when the Indian population peaked in Uganda, their share of the population was about 1%. But as per some estimates the “Asian” contribution (mostly Indian) to the national GDP ranged from 35% to 50%.

In 1952, there were twice as many African traders as Indian traders in Uganda, but the Indian traders did 3 times as much business as the Africans! Despite Govt regulations which hampered Indians from setting up shops (again as per Sowell).

Resentment against Indian dominance eventually got a lease of life when most of the East African countries became independent in the 60s and 70s. The dictator Idi Amin’s expulsion of most Ugandan Indians in the early 70s was a notorious episode at the time when the Asian population in Uganda dropped from 96K in 1968 to ~1000 in 1972.

The case in Kenya was not very different from Uganda. Indians dominated the Kenyan economy. Yet post Kenyan Independence, the pressures to “africanize” meant that the Asian (mostly Indian) numbers in Kenya dropped from 176K in 1962 to 25K in 1975.

Today Indians play a more marginal role in the region than they once did. .While we tend to diss imperialism a lot, we sometimes forget that imperialism was also a driver of such unlikely inter-continental migrations which brought commercial culture to hitherto unexplored regions.

Political independence to the region did not work out very well for the enterprising Indian diaspora. The Indian businessman who had played a large role in building these economies was driven out of it, with little gratitude.

The story of Indians in East Africa is a much unheralded one, that ought to be celebrated more in India, and must be taught in Indian textbooks. This was not a political colonization driven by kings. This was a mission undertaken by hard working ordinary Indians who shone with their probity, enterprise and sweat.

All the more reason to celebrate and commemorate it.

The author tweets @shrikanth_krish