THE MULTIPLICITY OF TRADERS AND THE PRODUCTIVITY OF TRADE
The remarkable number of traders selling imported merchandise, frequently in very small quantities, is a conspicuous feature of the West African economies. A large number of intermediaries is also to be found in the handling of produce, though here they are not quite so numerous and conspicuous. It is often said by administrators that in the southern parts of Nigeria and the Gold Coast everybody is engaged in trade, and this is scarcely an exaggeration.
The large number of intermediaries and the diversity of conditions in which they operate result in great differences in individual status and volume of trading. The large European merchant firms stand in a class by themselves with trading turnovers of several million pounds a year. They act as import and export merchants and are also engaged in a variety of other activities which, in the case of the largest firms, include the operation of industrial and transport enterprises, shipping lines, timber concessions and estates. Much the largest is the United Africa Company, which, together with its subsidiaries and associates, conducts a business in West Africa and elsewhere totalling between £200 and £300 m. annually. There are African traders with annual turnovers amounting to several hundred thousand pounds. They often operate in streets in which children sell a few empty bottles or cigarettes. Similar contrasts can be found in produce buying.
The number and variety of intermediaries have been much criticized by official and unofficial observers. They are condemned as wasteful and are said to be responsible for wide distributive margins both in the sale of merchandise and the purchase of produce. These criticisms rest on a misunderstanding. The system is a logical adaptation to certain fundamental factors in the West African economies which will persist for many years to come. So far from being wasteful, it is highly economic in saving and salvaging those resources which are particularly scarce in West Africa (above all, real capital) by using the resources which are largely redundant and for which there is very little demand; and thus it is productive by any rational economic criteria.