A Historical In-depth Discovery of Trade in West Africa Since 1896
Here’s what you need to know:
- On January 1, 1945, Barclays DCO and the Bank of British West Africa (BBWA) signed a formal written agreement titled “Co-operation Between Banks in West Africa” — a document historians Gareth Austin and Chibuike Uche later recovered from BBWA’s own corporate archive (catalogued as Ms 23538) and used to establish, in far greater detail than previously known, exactly how far the two banks’ collusion actually went.
- The agreement wasn’t a vague understanding — it included specific, numbered clauses restricting competitive behavior between the banks, with paragraph 4(g) prohibiting certain competitive activities to “preserve mutual stability,” and paragraph 4(i) laying out the banks’ own stated reasoning for that restriction.
- The scandal: this was no brief or isolated arrangement. Barclays and BBWA were, in the words of the academic research examining their records, “the only two major banks to operate in British West Africa” for most of the colonial period after 1916 — and by 1960, their alliance controlled roughly 90% of all deposits across the region, a dominance the 1945 agreement formalized in writing and both banks continued actively managing well into the 1960s.
Most historical accounts of colonial-era banking collusion in West Africa rely on inference — patterns of pricing, patterns of behavior, the kind of circumstantial evidence historians reconstruct after the fact. This one doesn’t have to. The agreement itself survives, with a title, a date, and numbered clauses.
The Document: What “Co-operation Between Banks in West Africa” Actually Was
It’s worth explaining precisely what this document is, since it’s an unusually direct piece of primary-source evidence for exactly the kind of arrangement historians usually only get to describe secondhand. Dated January 1, 1945, and held in BBWA’s own corporate archive under catalogue reference Ms 23538, “Co-operation Between Banks in West Africa” was a formal written agreement between Barclays DCO and BBWA — the two dominant commercial banks operating across British West Africa at the time. Business historians Gareth Austin and Chibuike Uche, in a 2007 Business History Review article drawing directly on both banks’ surviving company records, used this document to demonstrate that the alliance between the two institutions was “more far-reaching than has previously been shown,” extending beyond simple price coordination into a genuinely comprehensive arrangement.
It’s worth understanding why a formal written agreement between two ostensibly competing commercial banks matters so much historically. Cartels and price-fixing arrangements typically survive in the historical record only through indirect evidence — parallel pricing, unusually stable market shares, contemporary complaints from excluded competitors — because the parties involved generally have every incentive to keep such agreements informal, verbal, and undocumented. A dated, titled, numbered agreement that both banks retained in their own corporate archives for decades represents something considerably rarer: direct, internal, contemporaneous documentation of exactly what the two institutions agreed to, in their own words, at the time they agreed to it.
The specific structure of the agreement is worth noting precisely, since it wasn’t a loose or general statement of intent. Austin and Uche’s research cites specific numbered clauses within the document — paragraph 4(g), which prohibited certain competitive activities between the two banks specifically to “preserve mutual stability,” and paragraph 4(i), which separately laid out the banks’ own stated justification for that particular restriction. This kind of granular, clause-by-clause structure reflects a document drafted with real legal and commercial care — not a casual handshake arrangement, but a considered, formalized understanding both banks intended to actually operate under.
What the Agreement Actually Committed Both Banks To
Beyond the specific competitive restrictions in paragraph 4, Austin and Uche’s broader research findings — drawn from the same body of archival material — describe an alliance that extended well past simple pricing coordination. The collusion, in their words, escalated to include “not only comprehensive price-fixing but also restrictions on the products offered,” meaning the two banks weren’t just agreeing on what to charge customers, but actively coordinating which banking products and services would even be made available in the first place, narrowing the range of financial options accessible to West African businesses and individuals regardless of price.
It’s worth including the researchers’ own balanced explanation for why this arrangement persisted for so long, since the full picture is more complicated than pure predatory intent. Austin and Uche describe the collusion as “partly a defensive response to a perception that the market was too small for full rivalry” — a genuine commercial calculation that West Africa’s colonial economy simply couldn’t support the costs of two banks competing head-on for the same limited customer base. But their research is equally direct that this defensive logic wasn’t the whole story: “there was a rent-seeking element too,” meaning both banks also recognized, and deliberately exploited, the extra profit available specifically because eliminating real competition let them charge more, and offer less, than a genuinely contested market would have allowed.
The Scale & the Duration
The agreement’s practical effect on the market is worth stating precisely, since the numbers involved are genuinely striking. By 1960, the Barclays-BBWA alliance controlled roughly 90% of all bank deposits across British West Africa — a level of market concentration that left the remaining fraction of the region’s formal banking sector to be divided among every other institution combined, colonial or indigenous.
This wasn’t a short-lived wartime arrangement that quietly lapsed once the immediate pressures of 1945 passed. Archival records held separately at the Barclays Bank Archive (catalogued as BBA 11/2105) document the two banks actively managing and discussing this cooperative relationship well over a decade later — specific, dated internal correspondence between Barclays DCO’s own assistant general manager and its Ghana district manager in November 1958, a direct communication from BBWA to Barclays DCO in October 1959, and further correspondence from Barclays DCO’s assistant general manager to its Ghana and Sierra Leone directors in December 1960. A letter from Barclays’ own chief accountant’s department to a company museum curator, dated February 1971, still referenced the original 1945 agreement directly — meaning the document remained part of the bank’s own institutional memory and record-keeping for over a quarter of a century after it was signed.
The Scandal’s Direct Consequence: A Connection Already Documented Elsewhere in This Blog
There’s a specific consequence of this arrangement worth drawing out explicitly, since it connects directly to material already covered elsewhere on this site. The same Austin and Uche research explicitly examines “the relation between the security that the banks achieved through their agreements and their very cautious lending policies” — meaning the 1945 cooperation agreement and the broader collusive dominance it formalized weren’t isolated to pricing and product restrictions alone. Removing genuine competitive pressure between the region’s only two major banks also removed much of the commercial incentive either institution had to lend more aggressively, take on riskier African-owned business ventures, or compete for underserved customers by offering better credit terms than the other.
This is the same underlying discriminatory lending pattern already documented in this blog’s earlier coverage of African Continental Bank and the crisis that eventually reached a future Nigerian president — internal Barclays correspondence admitting managers had to “flout controls” for “political reasons” when extending credit to African customers, a pattern of exclusion serious enough to drive the creation of Nigerian-owned alternative banks in the first place. The 1945 cooperation agreement helps explain part of the structural “why” behind that pattern: with 90% of the region’s deposits controlled by an alliance that had formally agreed to avoid competing with itself, neither Barclays nor BBWA faced any real market pressure to change how, or to whom, they extended credit.
The Myth vs. The Reality
| What people assume | What actually happened |
| Colonial-era collusion between Barclays and BBWA is a historical interpretation reconstructed from indirect evidence | A dated, titled, numbered written agreement — “Co-operation Between Banks in West Africa,” signed January 1, 1945 — survives directly in both banks’ own corporate archives |
| The agreement primarily concerned pricing, with the two banks otherwise competing normally | Research based on the banks’ own records describes the arrangement as extending into “restrictions on the products offered,” not pricing alone |
| The 1945 agreement was a temporary, wartime-era arrangement that lapsed once conditions normalized | Internal correspondence shows both banks actively managing the relationship it established as late as 1958-1960, and the document was still being referenced internally as late as 1971 |
| The banks’ cautious, restrictive lending policies toward African customers were unrelated to their commercial arrangement with each other | Academic research directly links the security the two banks achieved through their collusive agreements to their shared, “very cautious lending policies” |
Close: The Document That Confirms What the Archives Already Suggested
“Co-operation Between Banks in West Africa” isn’t a title historians assigned after the fact to characterize a pattern of behavior — it’s the actual name both banks gave their own formal agreement, written into a document they each kept, referenced, and managed for decades. Combined with the discriminatory lending pattern already documented elsewhere in this blog, the 1945 agreement offers a rare, direct look at how two colonial-era institutions didn’t simply happen to dominate West African banking for over four decades — they wrote it down, formalized it, and kept managing it long after the ink had dried.
Sources and further reading.
