Tinashe Nyamunda. Journal of Imperial & Commonwealth History. Volume 45, Issue 5, October 2017.
Based on archival research conducted mainly at the Bank of England, the National Archives of Zimbabwe, Central Archival Repository in Pretoria and the Cory Library at Rhodes University in Grahamstown, the article examines the financial planning of the Rhodesian Front (RF) government (1962–1979) in the making of the Unilateral Declaration of Independence (UDI) of 11 November 1965. Its rebellion against Britain occurred in a period of decolonisation characterised by the attainment of majority rule in African countries. Having enjoyed settler colonial status from 1923 and significant political and economic room to manoeuvre, Rhodesians elected the RF into power to protect white minority interests indefinitely. Although the literature has focused variously on the British–Rhodesian impasse, UDI and the liberation struggle, it has neglected financial developments, without which the UDI would never have been declared and sustained for 15 years. This article provides a first in-depth perspective on how financial considerations were just as important as political, social and military considerations in the period between the RF’s rise to power and its rebellion. Central to its analysis is changing imperial and colonial economic relations. Although Rhodesia’s financial system was fully integrated into London’s sterling area by the 1960s, this link was severed following the rebellion and a post-sterling Rhodesian financial system emerged. Given that London had ruled out military invasion to stop the Salisbury rebellion, its only alternative was economic sanctions on the basis of its historical control of the colony’s financial system in circumstances where the colony was keen on using financial instruments to survive punitive exchange control measures and sustain minority rule. This article examines the financial makings of this imperial-colonial conflict and the considerations and activities on the eve of Rhodesia’s UDI. It shows the importance of local political dynamics and their influence on global financial arrangements. Rhodesia’s rebellion, crucially aided as it was by local financial arrangements, became an important international issue leading to the ostracism of the colony through United Nations economic sanctions where it used its monetary system as a rebel bulwark. In a sense, an examination of the making of Rhodesia’s financial system prior to UDI provides an important background account to its subsequent survival of sanctions for 15 years where it had been projected to collapse in just months.
Introduction
This article examines the processes leading to colonial Zimbabwe’s (Southern Rhodesia’s) de-linking from sterling through a Unilateral Declaration of Independence (UDI). In doing so, the study posits that imperial-colonial monetary links were a critical apparatus of Britain’s political and economic control. The early to mid-1960s were critical years marked by the rise to power of the right-wing Rhodesian Front (RF) government – mandated with the pursuit of white supremacy, particularly independence by minority rule. The article challenges existing historiography on Zimbabwe’s liberation struggle by suggesting that, more than other factors, the key to Rhodesia’s survival between 1965 and 1979 was financial management. In fact, this article suggests that historians need to move away from nationalist-driven histories, for example that by Ranger, that only see the liberation struggle as being ‘won’ and ‘lost’ through the battlefield. This study crucially demonstrates that what shaped the outcomes on the battlefields were important considerations of economics and international relations. It was this financial efficiency that allowed the colony to withstand global sanctions and finance its military resistance against the nationalist struggle between the late 1960s and 1979. In this study, the period between the early 1960s and UDI are viewed as the years in which the colonial monetary system begins to be reconfigured in preparation for the colonial rebellion against London. The financial changes in the early to mid-1960s were an important precursor to the centralisation of financial planning in imperial-colonial politics and the liberation war between UDI in 1965 and the 1979 Lancaster House settlement that brought independence to Zimbabwe the following year. Also, the article argues that the sterling link was the main tool of political and economic control of the colonies. Unlike historiography that has over-emphasised political reasons, this article overturns this wisdom by suggesting that in the case of British–Rhodesian relations severing the financial linkages significantly weakened the degree of imperial authority on the colony.
The RF government took on the responsibility of dismantling imperial-colonial relations, particularly monetary links that were a critical apparatus of Britain’s political and economic control. Although imperialism is generally portrayed as hegemonic by imperial historians, the RF government’s monetary reconstitution in the 1960s leading up to the colony’s UDI provides an opportunity to examine London’s capacity to deploy financial methods to influence the political decisions of Southern Rhodesia. Conversely, the RF’s main strategy in preparing for UDI and the consequent sanctions was to reconfigure its economic relations with Britain. The colonial government’s financial reconstitution between 1963 and 1965 and the economic de-linking it was designed to achieve was the main strategy for an enduring colonial rebellion.
The break with sterling was envisaged in a period just at a point at which currencies were expanding as newly independent countries established their own currencies. As these new currencies emerged, the more established imperial currencies assumed the characteristic of being harder and more stable while those of emerging countries were much softer in comparison. The main determinants of the hard–soft spectrum of currency would increasingly be exchange rates, determined by the current accounts of countries involved. Former imperial powers had a clear edge over their colonies, being more industrialised, having sources of capital and therefore foreign direct investment, as well as being influential in setting global commodity prices for their benefit. Market mechanisms were largely set by them and best financial practice, which was designed for their exploitation, was modelled on them, yet the emerging countries did not have the political capacity to match them, being relegated to producers of primary commodities at prices they could not determine and consumers of value added manufactured products. Although local economies appeared to have the authority to set local nominal prices, real prices were difficult to set as international exchange rates and commodity markets compromised price stability over time. The Southern Rhodesian legislators were keenly aware of these dynamics. Although wanting to extricate Rhodesia from sterling control, they were equally wary of the possibility of their own arrangements buckling under pressure from the hard–soft currency dichotomy. Thus, they were prepared to make sufficient safeguards to gain control of local economic fundamentals that could facilitate economic survival and attain growth. Without these crucial financial considerations and preparations by both the British and Rhodesian governments, the imperial authority could never have been confident to use its muscle to persuade Rhodesia to concede to the inevitability of majority rule. Conversely, the colonial state would not have been confident to proceed to and sustain a UDI.
Southern Rhodesia’s path towards de-linking from Britain through UDI in 1965 complicates generally accepted notions of decolonisation. As colonialism was installed through a process which was founded by settler political and economic hegemony in settler colonies, it could not be suddenly dismantled without conflict. Such a sudden cut, as history had demonstrated in the case of Kenya and the Zaire (now the Democratic Republic of the Congo), shattered the colonial order as white settlers were suddenly exposed to violent retribution from aggrieved African nationalists who wanted to ascend to political power and access economic privileges. The events leading up to UDI present an opportunity for disaggregating the diverse racial and class conceptions of independence. Whereas the African nationalists sought majority rule, right-wing settlers pursued autonomy from London but not liberty for the local African people. Although the question remains of what independence means at different times and for a diversity of interests, the period on the eve of UDI provides the opportunity to examine the discourse of the time in very specific ways. It is not limited to broadly conceived notions of political independence, but connected to a practical aspect of it, if not the most central element sustaining political power: finance.
The article begins by outlining the process through which colonial Zimbabwe was integrated into Britain’s imperial sterling network, the ‘mother and prime controller’ of international trade and exchange before and just after the Second World War. It traces how the effects of two world wars and a depression resulted in the retreat of sterling as the international key currency. It primarily considers how the financial retreat of empire shaped political developments in Southern Rhodesia in the 1960s where its white population resisted the attainment of black majority rule. The article particularly explores to what extent this pursuit of minority rule, which resulted in a British–-Rhodesian impasse over the question of independence, was connected with financial considerations and actions. The rest of the paper is divided into three main sections. The first summarises British and Rhodesian financial relations from the 1890s to the 1960s. The second examines the rise of right-wing RF politics and its influence on financial policies. It also discusses how the dissolution of the Federation of Rhodesia and Nyasaland (hereafter the Federation) led to the creation of separate territorial financial and exchange control policies and central banks with a view to increasing autonomy from London. The third section examines how the RF installed a system to remove its dependency on London financial markets and the Bank of England. The Rhodesian experience demonstrates the extent to which British unwillingness to support the colonial racist policy intentions of minority rule in favour of gradual majority rule. More importantly, it examines the capacity of the rebel Rhodesian regime to frustrate African nationalist and imperial interests as well as their impact on regional and international politics. The section reveals the importance of diplomatic and economic mechanisms in facilitating and encouraging UDI, a historical moment of a locally disrupted decolonisation process that delayed the attainment of political independence by a decade and a half. A final section concludes.
Sterling Imperialism: Southern Rhodesia’s Financial Integration
Developments between 1890 when the colony of Southern Rhodesia was founded and 1962 when the RF rose to power provide an important background to the subsequent reconstruction of Southern Rhodesia’s monetary system. They cover a period when sterling was legal tender, including how, even after the colony was allowed to create its own currency, it remained fully tied to sterling prior to the cutting of imperial-colonial financial relations as part of the process of ‘decolonising finance’ in the 1960s. The period up to 1962 constitutes a period when the colonial state, according to Phimister, accommodated imperial influence in its colonial political and economic system, whereas the rise to power of the RF signals the point at which imperial authority was challenged by the colonial government, leading to UDI in 1965. Nowhere is the narrative of imperial accommodation and its subsequent challenge clearer than in issues of money and exchange control. Financial links were the umbilical cord of imperialism, and its cutting initiated a process of autonomous monetary development.
Although some literature has examined the connection between British imperialism, its sterling currency and colonial policy, for example Schenk and Sutton’s work, very little work has been done on British financial policy in Africa, and even less on colonial Zimbabwe. This article therefore fills this lacuna by examining the case of imperial-colonial financial relations and contestations on the eve of Rhodesia’s UDI. At his inauguration in February 1965 to serve on a government committee, the leader of the opposition Rhodesian Party (RP), Alan David Butler, raised a motion on the economic implications of the RF’s new protective exchange controls and recently established Reserve Bank of Rhodesia (RBR) in 1964. Described as ‘[p]olitically liberal but far from an African nationalist’, Butler supported minority rule, but not through UDI. He campaigned for legal, constitutional independence as well as the economic advancement of Africans. London was only prepared to grant independence by African majority rule. Butler’s concerns represent the crossroads at which white Rhodesia found itself between 1963 and 1965, whether to rebel against, or comply with, Britain over the question of independence. At the centre of the political stand-off were financial considerations by both sides.
Butler likened the imperial British–Southern Rhodesia relationship to that of a parent and a child. Although against rebellion as a path towards independence, he suggested that
A strong economy is much more important than … words. Constitutions … themselves cannot create prosperity. I would compare it to a man coming of age. When you become 21 years of age theoretically you can do what you like, legally you have every opportunity to be fully independent but of course you are no more independent than the money that is in your own pocket [own emphasis], or your ability to earn a satisfactory living and pay your own way. Exactly the same thing applies to a country … and so I look for the future of this country through its economic strength and not through a mass of constitutional bits and pieces. If you take any other course then you will not have real independence.
While Butler supported the RF’s economic initiatives, he opposed the rebellion for which they were intended, fearing that a rebellion would not put money in Rhodesia’s pockets. Going further, Butler expressed apprehension that financial independence would remain hampered by an economic structure that excluded black participation. He argued that the state should have adopted the recommendations of the Philips Report, which suggested maintaining a rate of economic development that matched population increase. By contrast, RF legislators ‘reassure[d] [white] people that they … had a future in Rhodesia, and accordingly [sh]ould be prepared to invest their money, their efforts and their industry …’. Although criticised for lacking a comprehensive, inclusive economic plan because of ‘planning and making a declaration of independence unilaterally’, the RF government reconstituted the country’s economy on the basis of white minority privilege and surviving any punitive actions.
The year 1964 marked a departure from London’s financial influence towards economic autonomy under minority rule. Hitherto, Southern Rhodesia had been backed by sterling and restricted from fully exploiting the post-Second World War ‘liberalised’ markets as London had implemented ‘a second colonial occupation’ of its African colonies in the late 1940s and 1950s. Southern Rhodesia had been colonised in 1890 by Cecil John Rhodes’ British South Africa Company’s (BSAC) search for gold. After occupation, currency, expatriate commercial banking and a stock exchange modelled on the Cape Colony and London were established, broadly reflecting how
… the interests of leading Western nations lay in ensuring that the currencies of countries engaged in international trade were soundly based, readily convertible, and otherwise compatible with the working of the gold standard so that world commerce could be conducted and expanded with smooth efficiency.
As the BSAC initially speculated on mining but latterly diversified into land, the ultimate beneficiary of Southern Rhodesia’s colonisation was London. The colony became ‘linked through systematic primary product export to the wider international economy’, serving the early settler economy and its trade with Britain.
Locally, settler economic prosperity was based on African exploitation. Settler colonialism was
… in many ways a story of how a small immigrant white minority arrogated to themselves the right to determine the pace and direction of the nation’s development at the expense of the majority and how the African majority struggled to ascertain their rights.
The main challenge that settler colonialism faced prior to the rise of African nationalism was the extent to which its state was forced to accommodate imperialism. Even with Responsible Government status, which facilitated much room for settler political and economic manoeuvre from 1923 onwards, London still hedged metropolitan interests against the settler state. These included constitutional clauses that theoretically precluded the Colony’s Legislative Assembly from passing laws affecting Africans, the railways, mining revenue and special taxation on minerals, extra territorial matters, as well as measures affecting currency and the imposition of differential duties.
London protected its interests against a Southern Rhodesian settler state that desired full financial control from early on. Because of recurrent shortages of coinage, partially alleviated by coupons, an economist by the name of William Fosciety suggested to Cecil John Rhodes of the BSAC in 1896 that establishing a State and Public Bank ‘[w]ould … ensure safety to the public and profit to the chartered company, as well as provid[e] a favourable investment for capitalists’. An ordinance to regulate banking and note issue was even considered at the colony’s first Legislative Council meeting in 1899. The State Bank, like the Bank of England, would be divided into two separate departments, ‘confined to the issue, circulation and payment of notes … and the ordinary business of deposit and discount’. Based on gold mined locally, the BSAC would issue a strictly convertible currency. The ordinance included some clauses of the Cape Bank Act (1891). However, as ‘the exercise of responsibility over currency management was always subject to the reserved power of the home government’, London rejected the ordinance in 1907, retaining a full backing of the colony’s currency. Southern Rhodesia could only manage internal state finances through the departments of the Chief Accountant, Audit, Posts, Telegraphs, Mail and Customs, which were amalgamated into the Treasury division in 1903.
Coinage shortages were partially resolved by the Bank Notes Ordinance (1922). It authorised the local branches of the Barclays and Standard Banks to issue a limited number of notes. But raising capital remained problematic as the expatriate commercial banks were not locally regulated. Encouraged by settler agricultural development – particularly tobacco, maize and beef production – London assented to Southern Rhodesia issuing its own currency to encourage further agrarian development. Coinage shortages were eased with the passing of the Southern Rhodesia Coinage and Currency Act (1932) and the Southern Rhodesia Currency Board (SRCB) in 1938. Fully backed by sterling, SRCB notes were printed by the Bradbury and Wilkinson Company of London and regulated and shipped by the Bank of England. The SRCB also issued currency to Northern Rhodesia and Nyasaland.
Facing mounting challenges with capital formation, the Southern Rhodesia prime minister from 1933 to 1953, Godfrey Huggins, complained that the colony had to
… strain a nerve … for the prosperity and general welfare of [the] colony … we have to look for means of cheapening our costs of production before all else, and I submit that the only way we can get cheaper money is for government to start a national bank.
Expatriate banks acted as ‘more or less a kind of garage for money rather than fulfilling their proper function which is to turn the wheels of industry’. Businesses that enjoyed greater access to finance were mostly local subsidiaries of multinational companies such as Anglo America. Karekwaivenane observes that as ‘foreign companies came and listed … locally generated savings were used to invest in expatriate firms and no new capital was brought into the country’. Huggins’ argument was that an institution such as a central bank could have regulated capital movement.
By the 1940s, Southern Rhodesia was ‘linked through systematic primary product export to the wider international economy’, particularly its colonial trade with Britain. The Second World War, however, triggered secondary industrial development through import substitution industrialisation (ISI), leading also to urban expansion. Colonial monetary arrangements had largely displaced indigenous exchange traditions, subjecting Africans to the interests of settler and imperial capital. Southern Rhodesia’s dependency on London capital markets, however, largely prescribed the direction of colonial production. With a diversifying economy, Southern Rhodesia desired financial and monetary policy autonomy. Having conceded much and gained less, colonial development was constrained by Britain’s financial interests. Mining and agricultural development were determined by available finance and sterling market demand. But as the colonial economy matured in the 1940s, it began to diversify its production, industry and markets. This coincided with Britain’s lessening imperial control as a result of the impact of two world wars and a global economic depression. As the classical gold standard collapsed, draining British financial resources, it triggered the gradual retreat of sterling from international prominence, finally resulting in the sterling area’s collapse in 1971. Aided by the Anglo-American agreement of 6 December 1945, the United States dollar became the anchor of the Bretton Woods system. Although victorious in the Second World War, Britain lost its colonies in South Asia, particularly India in 1947 and Pakistan, which was partitioned from it. Britain also lost Ceylon and Burma in 1948 in that region. But Britain held on to the colony of Malaya, which only attained its independence in 1957. In Malaya, London instituted a second colonial occupation to benefit from the colony’s dollar earning capacity. The dominions diversified their trade and liquidated their sterling assets. However, Britain sustained ‘visions of Africa’s role in a revitalised empire … to sustain the dream of world power’, resulting in the ‘second colonial occupation’. As these events unfolded, Southern Rhodesia made even greater demands for increased financial autonomy in its territory.
Although a sterling bloc had been in existence since the 1930s, London made it more discriminatory in response to the convertibility crisis of 1947 and in the hope of recovering sterling’s former glory. African colonies, including Southern Rhodesia, were taken as the source of Britain’s post-war recovery. Southern Rhodesia was very important, for example because it produced Virginia tobacco. The main source of this leaf was the United States, but buying within the empire from the sterling-based currency of Southern Rhodesia allowed them to practise dollar economy. An Exchange Control Act (1947) facilitated the pooling of US dollar securities in London to strengthen sterling’s exchange value. Despite the boom that the exchange controls stimulated in Southern Rhodesia’s tobacco industry, Salisbury’s calls for financial control and the creation of a central bank increased. Serving the two Rhodesias and Nyasaland, the SRCB was deemed inadequate by the colonial government in Salisbury. Its role was limited to issuing sterling-backed colonial currency on behalf of the Bank of England, but was not equipped with any financial devices to direct development. Settler economic aspirations remained constrained as London’s discriminatory sterling network facilitated closer monetary integration with the African colonies.
The discriminatory sterling area was a short-lived mechanism to bolster sterling. Planned through the joint efforts of the Bank of England, the British Treasury and the Dominions and Colonial Office, exchange controls required that ‘colonial territories understood and appreciated the principles and practice of exchange control in the United Kingdom’, especially ‘the economic crisis and the plans for meeting it, and to emphasise the need for dollar (and sterling) economy’. Thus, ‘[i]t was important … that the orthodox British monetary and marketing arrangements were preserved, [as] exchange surplus would automatically accumulate as sterling balances’. As Krozewski highlights, ‘British policy was mainly concerned with import control, the boosting of exports and the control of financial and currency arrangements’.
The authorities managing the exchange controls adapted them to specific territorial contexts. W.J. Jackson, Bank of England foreign branch official, and H.E. Brooks, of the Treasury, toured the colonies to discuss the measures. While Britain’s East and West African colonies were advised at a conference in Nairobi and Accra, respectively, Southern Rhodesia was consulted separately. This was because it had attained Responsible Government status in 1923. The consultations were necessary as ‘it was felt in London that the colonies had been too long at the end of a limb, trying to work a control the nature of which they could not fully understand’. In the sterling convertibility crisis between 1947 and 1952, ‘the empire occupied a prominent position in Britain’s external economic relations and fulfilled a pivotal role in the discriminatory management of the sterling area’. Southern Rhodesia was briefed that the setting up of the area was aimed at restoring ‘the economic position of the UK’. The loss of other major imperial and colonial territories and investments aggravated the decrease in ‘invisible earnings’ which had hitherto offset balance of payment deficits, hence the need to consolidate African colonies through exchange control. Although the ‘general plan’ of recovery included ‘details of the assistance available to us from the American Loan and Bretton Woods (and the strings attached)’, the consultations emphasised the area’s need for ‘saving dollars’ through ‘import licensing in relation to exchange control’. Export of currency notes and trading activity were closely supervised and banks monitored. This controlled the rate of inflation and protected sterling.
Given Southern Rhodesia’s place in British plans for financial recovery, its calls for financial autonomy were contradictory. When Salisbury emphasised the need to establish a central bank, London instructed a Bank of England official, H.C.B. Mynors, to investigate its feasibility, submitting his report to the colonial treasury in March 1949. In summary, the
… essence of Mynors’ report is that the economy and finance of Southern Rhodesia are so dependent on external influences that they could not be directed to any extent through the mechanism of a Central Bank and to utilize such mechanism for internal control will be tantamount to using a sledge hammer to crack a nut.
Mynors concluded that the SRCB operated with ‘admirable efficiency and economy’. Instead of a central bank, he proposed appointing an experienced banker as chairman of the currency board. He would also act as a liaison between the government and the commercial banks. He would advise the minister of finance on banking and financial trends and combine those duties.
Mynors’ suggestion was taken only as a short-term expedient to allow the colonial financial system to diversify further as there were only two commercial banks and a stock exchange by 1950. However, the government appointed a London merchant banker – Gordon Munro – in March 1950 to ‘pave the way for the Central Bank which the government believes is needed in the Colony’. As the Federation of Rhodesia and Nyasaland was created in August 1953, the accompanying Federal Coinage and Currency Act (1954) was viewed as ‘preparatory to the establishment of a Central Bank’. It was eventually established and started operating on 15 March 1956. A.P. Graffety-Smith, who had succeeded Munro as the chairman of the Currency Board, became the bank’s first governor, himself succeeded by B.C.J. Richards until its liquidation in 1963. The bank was the sole note and coin-issuing authority, but its foreign exchange reserves consisted mostly of sterling assets.
Only a small proportion of the RBR and Nyasaland’s assets was held as balances of the Federal Reserve System and the Reserve Bank of South Africa. Principally, the Federation remained dependent on Britain for credit because the local currency was sterling-backed. Although the emergence of the European Economic Community (EEC) in 1958 lessened the importance of the sterling area for Britain, its currency continued to anchor colonial finances of the Federation. London viewed this connection as necessary given the Federation’s huge development projects funded by the International Bank of Reconstruction and Development (IBRD). The loans for the project were approved on the basis of British surety. Because of this, the Reserve Bank could not be granted discretionary financial powers. The federal economy was prone to sterling convertibility swings. Its economy never enjoyed the advantages of a locally determined monetary policy, meaning that the Reserve Bank was a glorified currency board.
In shifting focus towards regional integration within the EEC, Britain increasingly loosened its discriminatory sterling controls in 1958. This coincided with nationalist demands for African majority rule in central Africa. Whereas in Northern Rhodesia and Nyasaland these demands led to their independence by 1964, Southern Rhodesia experienced a shift towards conservative right-wing politics, the consequences of which would result in the financial reconstitution of the colony and the severing of imperial-colonial sterling links.
The Rise of the RF, Federal Dissolution and Financial Reconstitution
By the mid-1960s, a diversified financial system was in place to bankroll different areas of the Rhodesian economy. Without this, or if Britain had made a credible threat of military intervention, the RF would have been unlikely to have contemplated a UDI. With a sound financial sector and stable economy, the RF state only needed to secure a successful transition from, at subregional level, federal monetary arrangements, and, more broadly, from British monetary dependency.
The Federal years under the premierships of United Federal Party (UFP) leaders Garfield Todd (1953–1958) and Edgar Whitehead (1958–1962) have been labelled by historians as the most liberal years of colonial rule. As the Federal experiment collapsed, Whitehead hoped that racial relations in the colony would transform to the point of abolishing the Magna Carta of white rule, the Land Apportionment Act (1930). This proved unpopular as the UFP lost elections in 1962 to the newly established RF, whose mandate was to protect white supremacy. Further to the RF’s pursuit of minority independence was a discretionary regulation of the financial system to allow it to grow the country’s economy independent of London’s influence in the event of a possible UDI.
Following its election victory in December 1962, the RF demanded that London should give urgent consideration to Southern Rhodesia’s independence. The RF’s conditions included limiting the African voting franchise and maintaining indefinite white economic privilege. Its government also simultaneously passed further discriminatory legislation that locked Africans out of the mainstream economic sectors. The Ministry of Internal Affairs, responsible for African affairs from 1962, rejected the recommendations made by commissions such as the one that produced the Philips Report, which aimed at, among other forms of economic participation, improving African agriculture. Internal Affairs instead passed a policy of community development which was a version of South Africa’s ‘Group Areas Act [1950] in disguise’, ‘little more than a smokescreen for “apartheid, Bantustan, separate development”‘. This would sustain a situation where ‘white settler colonialism was almost complete in its domination: political, economic, social and cultural … pre-empting the development of an African bourgeoisie of any significance, and determining that even the[ir] profit … would be weak’.
While African immigration from Northern Rhodesia and Nyasaland was restricted in the 1960s, the RF intensified an assisted passage scheme for white immigration, and by 1965 even provided subsidised air and sea transport at a cost of £60 per head with a view to providing permanent residency to increase the white population. Even though the RF’s white supremacist agenda was presented as a way of defending ‘western civilization from the evils of communism … to preserve civilized standards from the anarchy and corruption of Black Africa’, London appeared to be ready to work with African nationalists in the interest of majority rule. But faced with an imminent collapse of the Federation, Winston Field, the first RF prime minister, announced in parliament on 3 February 1963 that the best alternative was
to make a clean break and open up a way to negotiation on an equal footing – as fully independent states – and to attempt to reach agreement for the operation of various common services and with trade and economic agreements too.
The discussions between Field and Rab Butler, the British foreign secretary, and Field’s successor from 1964, Ian Smith, and British Prime Minister Harold Wilson are the subject of study by Richard Wood. Where the British government was unwilling to grant independence by minority rule, the RF government threatened to compromise the process of dissolving the Federation if its demands were not met. As Colonial Secretary Oliver Lyttleton expressed at the establishment of the Federation in 1953, ‘without the unanimous consent of the four governments … the [Federal] constitution could not be liquidated’. London’s suggestion to discuss independence after dissolution was resisted. Salisbury suspected that London was interested only in trying to get the colony involved in dissolution without any intentions of even seriously considering Rhodesian minority independence.
Field insisted to Butler that the question of Rhodesia’s independence be resolved first and guarantees given before the dissolution process commenced. In January 1963, Field even released nationalists detained under emergency regulations in 1959 and allowed their leader, Joshua Nkomo, to form a new party under the limited franchise of the 1961 constitution as a gesture of good faith to London. As the leading partner in the Federation, Salisbury’s involvement in dissolution was crucial. Butler conceded that, ‘[i]t is clear that the two issues of independence and dissolution are very clearly interconnected’, and discussions and correspondence between Field and Butler over Southern Rhodesia’s independence took place. However, ‘Butler was playing his cards with silken skill. The prime aim was to get Field to the federal talks; but the need for constitutional change – in the franchise, and in the Land Apportionment Act – had quietly been insisted upon’.
The RF’s justification for consolidating Southern Rhodesia as a ‘white man’s country’ is best illustrated by Field’s contention that
Europeans resident in Rhodesia over the years have accumulated the balance of the capital resources of the country. Investment in Agriculture is substantial, and has been accumulated as the result of the ploughing-back of profits into development over a long period of years. Many of our mines, industries, shops and commercial establishments have been built up and developed by the same method. The relatively high development of the economy has been largely due to European immigrants who have made their homes here. Over a long period of years, the savings of Rhodesians over two or three generations who plough the greater part of their profits back into their businesses rather than invest them abroad, have played a large part in capital development.
Emphasising that Southern Rhodesia had ‘managed its own internal affairs for forty years’, the RF demanded ‘complete independence’. Field insisted further that
so long as the last remaining links remain and the impression persists that the United Kingdom has the right to interfere in our internal affairs there is danger of a series of serious incidents of disorder being encouraged from outside in order to compel such intervention by the British government.
With increasing African agitation over political and economic exclusion, Britain never openly tolerated its colony’s racist intentions. But the RF’s authoritarian rule continued to cause frustration to other African countries in the Commonwealth and the United Nations (UN). To facilitate the conference for the purpose of timely dissolution and not further antagonise the right-wing state, Butler cautiously suggested that ‘Her Majesty’s Government accepts in principle that Southern Rhodesia, like other territories, will proceed through the normal process to independence’. His comments appeared to guarantee Rhodesian independence once dissolution was concluded, but without any solid commitment. Although initially demanding ‘unqualified recognition’ of Rhodesian independence, Field admitted that ‘discussion should take place “on the terms” on which Southern Rhodesia should proceed to independence’, thus ‘independence [now] depended not an unequivocal promise but was “subject to satisfactory conclusion of the [Federal Dissolution] discussion”‘. Although Butler appeared to have secured an advantageous position for London, the dissolution process that resulted in independence for Zambia (Northern Rhodesia) and Malawi (Nyasaland) provided the RF government with an opportunity to reconstitute itself towards discretionary financial arrangements that could sustain its economy independently of its neighbours and from London’s influence.
The dissolution conference held between 28 June and 3 July 1963 in Southern Rhodesia was intended to facilitate a ‘speedy transfer of Federal responsibilities to the territories’. But the complexity of the issues required that the territories ‘set up the necessary machinery for a detailed study of these problems and to produce a timetable for the process of dissolution’. The conference thus created two inter-territorial Committees A and B. Committee A presided over the reversion of federal functions such as public service and the judiciary, and recommended on matters relating to assets and public debt. Committee B worked out possible areas of future cooperation in matters relating to IBRD-funded Kariba Dam, air, power, transport and railways. The committees collaborated with the colonial office to ‘work on the basis of seeing … the reallocation of functions … assets … and apportioning liability … among the three successor governments’, concluding their work on 31 December 1963.
The committees produced well over 50 reports on aspects of the dissolution process relating to all matters of governance. Among other institutions, they set up a liquidation agency which presided over the liquidation of assets and reallocation to the territories as agreed. The agency had liquidated the Bank of Rhodesia and Nyasaland by 31 December 1965 and its assets of ‘gold, cash, securities, outstanding loans and other financial assets w[ere] proportionally allocated to the territorial central banks’. This involved the transference of responsibility for currency, banking and exchange control to the unitary territories. The currency of the central African monetary area remained legal tender until June 1965. This was the beginning of the retreat of British financial colonialism from central Africa.
In reconstituting its monetary system even with the remaining sterling links, Southern Rhodesia adapted supporting legislation for discretionary financial control. For example, the Control of Goods Act (1954) stating that ‘goods originating in the sterling territories do not require import control’ was amended. An order-in-council was published in July 1963 stating that when ‘Federation is dissolved … the Control of Goods (Import and Export) order 1960 … [would be] amended by the omission of “the Federation” wherever it occurs and by the substitution of “Southern Rhodesia” in place thereof’. The secretary for law and order reiterated that ‘[i]t is necessary for various reasons for the import and export of certain goods to be controlled … for commercial or trade reasons’. The ‘rules for importation of merchandise’ would now be applied at the discretion of the Ministry of Trade, Industry and Development. Thereafter, an open general licence (OGL) would be awarded only to those who applied to the Treasury and qualified only if they imported capital goods such as spare parts for agricultural and industrial machinery. OGLs were subsequently mostly granted to applicants with projects that boosted the country’s export-earning capacity instead of competing with locally produced commodities.
Although there were real inflationary fears connected to the loosening of ties with sterling, the RF government in 1963 designed some financial safeguards that would also benefit local industry. These included the 1963 amendments to the Exchange Control Act (1954) and the Currency and Exchange Control (temporary) Act (1961), which were adapted to the Rhodesian context to prevent capital flight and avoid damaging the economy through the depletion of foreign exchange. Restrictions to capital transfers were applied mainly through the banking system, whereas other measures covered ‘the import and export of currency notes, postal orders, insurance policies and financial instruments as well as the control, issue and transfer of securities’. While other aspects directly affected such sectors as agriculture or commerce, others with financial implications, for example as provided for by Federal laws such as the Price Control regulations (1954) and the Weights and Measurements Act (1962), were also adequately adjusted. Effectively, certain import businesses’ operations were compromised as they failed to access the OGLs required in the formal acquisition of foreign currency. Access to foreign exchange became exclusive to those who fulfilled the requirements of the state, unlike the previous period when business people took advantage of the common monetary arrangements under the sterling pool. To boost manufacturing through ISI, the government established the Industrial Development Corporation as its investment vehicle.
Following the dissolution of Federation, the financial sector and broader economy were reconstituted to protect Rhodesia from external forces by taking the necessary ‘centralizing responsibility for controls and prohibitions’. As the Federal dissolution Committees A and B concluded their work in December 1963, it was up to the respective governments to adapt their legislation and institutions to their territorial economies. Salisbury was determined to make financial provisions suitable for settler political and economic interests that could withstand economic pressure from its neighbours, Britain and the UN. The establishment of the RBR, the accompanying Exchange Control Act (1964) and the creation of the RF cabinet’s Ministerial Economic Coordination Committee (MECC) became the basis upon which the Rhodesian rebellion against Britain was financially planned.
‘No Sentiment Attached to Money’: Colonial Financial Reconstruction for UDI, 1964–1965
The beginning of 1964 closed the chapter of Federal dissolution, allowing Rhodesia further opportunity for political and economic reconstitution. As Britain refused to recognise white minority rule, the pursuit of independence through constitutional negotiations proceeded with much frustration for Rhodesia, ultimately leading to increasingly hardening settler government attitudes that culminated in UDI. The positive economic developments that accompanied the post-dissolution years gave the RF state confidence to ‘go it alone’, an option they would not have considered otherwise. On the back of a retreat of British imperial influence, the Rhodesian government proceeded to establish the RBR, passed exchange control legislation, created the MECC, and created a local currency between 1964 and 1965.
Among the first regulations designed to sustain a functional post-Federal monetary and exchange control system with regards to the customs and excise system was implemented on 28 February 1964. The exchange control system that had existed on the basis of the British post-Second World War sterling area created preferential tariff regimes for former British colonies as members of the Commonwealth. In 1964 Rhodesia’s new unitary tariff system was designed to facilitate ISI. The Minister of the Treasury John James Wrathal noted that even the former Federal partners of Zambia and Malawi would not only attempt to industrialise, but also doubly protect their local industries while reducing dependence on Rhodesia’s manufactured products. In the case of a contracted internal market, external competition would be high and industrial capacity compromised. Not only would tariffs protect the domestic market for local enterprises, they would also raise revenue. The tariff system acted as ‘[o]ne of the Government’s essential tasks in streamlining the fiscal system’. If deployed efficiently, excise duties and tariffs were crucial exchange control tools that protected the local currency by checking imported inflation.
The RBR was established on 22 May 1964 to assume currency, banking and exchange responsibilities ahead of the termination of the Federation’s common monetary area on 1 April 1964 and the liquidation of its central bank on 31 December 1965. The Reserve Bank of Rhodesia Act (1964) was modified to suit unitary financial arrangements. With a strong general reserve fund of £1 million held by the Reserve Bank, imperial and colonial monetary ties were weakened. The RBR’s new governor had been the chief cashier of the Federal central bank, N.H.B. Bruce, deputed by G.C. Gough, formerly an employee of the Bank of England.
With the attainment of political independence, the establishment of Reserve Banks was an expression of economic liberation in African countries. However, retaining currency links allowed the imperial centre to continue exercising some degree of economic influence. In spite of the remaining sterling links, Rhodesian currency assumed a greater degree of autonomy, particularly as it called upon commercial and merchant banks to maintain their statutory reserves with its central bank. For Bruce, ‘it was considered desirable to have a more direct means of controlling credit, in addition to the other powers vested in the bank’, a new condition that accompanied the establishment of a territorial monetary authority. Moreover, the creation of the Reserve Bank also reduced Rhodesia’s financial dependence on London. In a letter congratulating Salisbury on the establishment of the Reserve Bank, a Bank of England official highlighted that relations between the two banks would become that of banker and client, with the Bank of England being the banker and the RBR an independent client rather than an adjunct or colonial branch. Rhodesia’s financial system also became closely coordinated with other ministries and departments, such as customs, trade and agriculture.
In April 1964, the common monetary area was terminated. On 2 June, ‘Rhodesia assumed full sovereignty in matters of currency, banking and exchange control’. The territorial banking sector, now fully governed by the Reserve Bank, was required to make statutory deposits of funds. In November 1964, Federal notes were replaced by Reserve Bank currency. Currency exchange with other countries, including sterling scheduled territories and even the former federal partners, became subject to monitored rates. Goods and capital movements became regulated, with the Reserve Bank fully employing the money supply and interest rate function to regulate the economy and manage the value of the national currency. Although theoretically designed to be independent of the central state, the bank was closely supervised by the Ministry of Finance. Rhodesia’s last remaining links with London were the full sterling cover and the colony’s Reserve Bank banker–client relationship with the Bank of England.
The effects of these financial changes on the Rhodesian economy were immediately positive, partially aided by the boom in global commodity markets in the 1960s. Wrathal reported that the economy was growing, contrary to the doom predicted by some contemporary economists or the vote of no confidence exhibited in the large emigration of white, coloured and Asian people as the British–Rhodesian impasse over the question of independence intensified. Being the first financial policy since 1953 in which Rhodesia had full unitary responsibility over its economic policy, not least diminished British exchange control interference compared with the period 1947–1956, the economy, which was characterised by 4.9 per cent increase in gross domestic product, gained some buoyancy. Gross national product (GNP) had risen by £6,600,000 from £309,600,000 to £316,200,000, in 1962–1963, but this had risen even further to £331,700,000 in 1964. Although per capita income in relation to GNP had slightly declined from £61.9 to £61 per head, improved export–import performance in 1965 offset this. This restored confidence in the economy.
Rhodesia’s economy improved from the slowdown of the years between 1957 and 1961, growing by 5½ per cent in 1964. Even as white emigration soared and the construction industry began showing signs of contraction, manufacturing, agriculture and mining performed relatively better and African employment increased. African earnings improved by 4 per cent, the export of domestic products to countries other than Zambia and Malawi soared by 10 per cent, record exports of Virginia flue cured tobacco were experienced and there was a rise in industrial production and tonnage hauled by the Rhodesia railways. As the economy benefited from the newly reconstituted financial arrangements, the frustrations over the constitutional negotiations between Wilson and Smith in 1964 only encouraged the RF that UDI was a plausible course in the event of Britain’s refusal to grant minority independence.
On 9 November 1964, the Rhodesian prime minister, Smith, appointed two cabinet committees. Committee ‘A’, chaired by Smith himself, considered ‘all aspects of a unilateral declaration of independence with a view to the eventual publication of a white paper document for public information’. Other members consisted of Deputy Prime Minister Clifford Dupont, Minister of Internal Affairs William Harper, Minister of Law and Order Desmond William Lardner-Burke, and Minister of Trade, Industry and Commerce George Wilburn Rudland. Committee ‘B’, examining the economic aspects of UDI, was chaired by Wrathal, with other members being Rudland, of Trade, Industry and Commerce, the Minister of Agriculture Lance Bales Smith, and R.H. Coates, Palgrave of the cabinet secretariat. To establish a sustainable UDI economy, the cabinet also established coordination machinery such as the National Economic Advisory Committee (NEAC), the MECC, and various subcommittees, such as the Treasury department’s Development Coordination Commission in November 1964. Initially established in 1963, the MECC had been replaced by the Ministerial Development Coordination Committee on 19 November 1964 but reconstituted on 2 February 1965. These committees thus coordinated a financial system structured to sustain a rebellion/UDI economy. This centralised economic planning led to improved agricultural yields, enhanced production in mining and an expanding manufacturing sector by 1965. In fact, although the country was a primary commodities exporter, ‘of the 20 most important exports, over half were manufactured or processed goods, many of which did not appear or were of very minor significance four or five years earlier’. The production of these manufactured goods would eventually help to sustain the Rhodesian rebellion just long enough for its rebel government to negotiate a favourable settlement with Britain and the nationalists.
With UDI looming, external diplomatic pressure mounted against Salisbury. It had become clear that the colony would not compromise on the independence issue. On 22 April 1965, a UN committee for the liberation of colonised countries and peoples reported that the situation in Rhodesia was grave. At meetings held between 30 April and 6 May, the Security Council considered a letter submitted by 35 African states ‘requesting the Council to examine the very serious situation in Southern Rhodesia’. The Council thus adopted Resolution 202 of 1965, which recognised London’s imperial responsibility over Salisbury, although Rhodesia was never really a colony in the strictest sense. The Council ‘approved the opinion of the majority of the population of Southern Rhodesia and that the United Kingdom should convene a constitutional conference’, requesting all member states, including the UK, not to recognise a UDI by a minority government, and encouraged the imperial government not to transfer ‘any of the powers or attributes of sovereignty, but to promote the country’s attainment of independence by a democratic system of government in accordance with the aspirations of the majority of the population’.
London still believed in its coercive capacity to influence political events in Rhodesia by economic means. Following the collapse of settlement negotiations between July and August 1965, when Rhodesia refused to accept the principle of unimpeded progress towards majority rule, British Prime Minister Harold Wilson reiterated that in the event of a UDI Britain ‘would not allow Rhodesia to go unpunished’. Business civil society groups felt threatened by this. Various business groups submitted eight reports to the RF government which overwhelmingly discouraged the course to UDI. The Rhodesia Tobacco Association, for example, feared the loss of Commonwealth preference, which would in turn endanger an agreement between British manufacturers and Rhodesian producers.
Dismissing these associations as bogeymen, the RF government published a White Paper on 26 April 1965. It argued that Britain ‘would not fully impose sanctions and even if she did, Rhodesia was sufficiently prepared’. The White Paper argued that,
Economies in the country to the North could be crippled; Withdrawal of preference and trade was a two edged-sword; Rhodesia could redirect her trade for there was no sentiment attached to money [own emphasis]; Britain would not attempt to destroy Rhodesia’s economy and stable government when countries to the North give every direction of submitting to Communist influences; An embargo on Rhodesian tobacco would give America a virtual monopoly; Rhodesia could repatriate foreign workers to Zambia and Malawi; Economic sanctions would hurt all races; Counter measures had been prepared to protect Rhodesia’s national interests, economic and otherwise; History has shown that sanctions will not work; and in the long run Rhodesians had nothing to lose but all to gain by accepting their responsibilities and becoming completely independent as a sovereign nation.
Ultimately, concerns shifted away from examining the feasibility of UDI and its possible economic consequences towards outlining the preparedness of Salisbury to sustain it.
After the collapse of negotiations in August 1965, Rhodesia concentrated on consolidating its finances. Britain began to realise that financial and economic pressure on Rhodesia was more complicated than initially envisaged. Although the notion of ‘kith and kin’ influenced imperial action, particularly the realisation that armed intervention in Rhodesia was off the cards, London had to consider carefully its own financial anxieties before deploying punitive exchange controls. Although the UK could apply the Emergence Laws (re-enactment and repeals) of 1964 and the Exchange Control Act (1947) to block Rhodesian assets in London under the code name ‘Blacksmith’, the imperial authority was anxious about the possible impact of the colony’s reprisal. In the event of UDI, Britain could expel Rhodesia from the sterling area and impose tighter exchange controls, which meant denying the colony access to preferential commonwealth trade. The third stage would involve blocking, with the help of the British Board of Trade, both official and private colonial accounts held in London to the value of £34 million.
Suspicious of Rhodesia’s possible withdrawal of gold-denominated assets of close to £3 million and other assets worth about £24 million, Sir William Armstrong of the Treasury instructed the Bank of England that ‘If any unusual orders are received [from the Reserve Bank of Rhodesia], it will be necessary to consult urgently as to the action to be taken’. Alarm had been raised when Rhodesia unilaterally acquired 100 bars of gold at a cost of £500,000 from South Africa to increase the colony’s gold-to-currency ratio to 25 per cent. Explaining to the Bank of England, Bruce Noel argued that ‘We did not approach you with a view to purchasing additional gold because we felt that, in the present circumstances, there would have been every justification for some reluctance to accede to such a request’. Rhodesia was beginning to diversify into non-sterling-denominated assets to pre-empt such punitive actions as ‘goldsmith’ which London had prepared. Goldsmith represented an important coercive financial strategy for London. Rhodesia’s strategy, however, would result in Britain facing greater financial loss on balance. First, Salisbury would repudiate colonial debt held by UK stockholders amounting to £75 million. Moreover, on top of restricting copper exports crucial to Britain, Rhodesia would appropriate British investments in the colony.
British financial authorities were worried that blocking Rhodesian assets could provoke other scheduled territories to consider withdrawing their own sterling assets from the Bank of England. London had already lost many former sterling investments following the post-Second World War financial arrangements. Applying ‘Blacksmith’ threatened Britain’s financial position in the global financial system. The expulsion of Salisbury from the sterling area was likely to hurt London more than it did the recalcitrant colony. Treasury official A.K. Rawlinson viewed this as ‘a matter of grave concern’. Although some Commonwealth governments supported London, they could still withdraw their sterling balances, prompting a run on the Bank of England, which held £2.3 billion of scheduled territories assets, on the balance of a total net worth of £4.4 billion.
For the exchange controls to be fully effective against Rhodesia, Britain needed the economic cooperation of South Africa. Given the racial geopolitics of the region, however, this was unlikely. Instead, Rhodesia made adequate preparations to circumvent punitive exchange controls by its neighbour. The representative of the Standard Bank, for example, revealed that its Rhodesian branches were unlikely to be affected by British asset freezes as it had few funds in London. Rawlinson observed that,
… if however the Rhodesians took that [UDI] course … short of armed intervention, which H.M.G [Her Majesty’s Government] did not intend, there was no hope of unseating the rebel government and replacing it with another more amenable to HMG’s wishes.
Britain’s position was built on sand. In central Africa, although Zambia’s Kenneth Kaunda dissociated his country from Salisbury, his country still had its own problems, having only just attained its independence. Malawi continued to trade with Rhodesia and had even less influence on the geopolitics of the region at the time. Given the shortcomings of its central African allies and the limitations of ‘Blacksmith’, London’s only option was to continue negotiating.
Smith took advantage of Britain’s vulnerable position, testing Rhodesian public opinion when he controversially bet on 12 October 1965 that Rhodesia would be independent by Christmas. Although UDI was initially set through cabinet agreement for 25 or 26 October 1965, the event was delayed for two reasons. The first was the intervention of the British prime minister, Harold Wilson, who flew to Rhodesia for more negotiations. The second reason was that the colony wanted to maximise the income from the marketing of tobacco as part of its final preparations for UDI. The Special Committee on the Independence of Colonial Countries and Peoples adopted a further three resolutions on the same day under which the UN General Assembly condemned any attempts by Rhodesia to seize independence illegally, which would be flouting
the principle of equal rights and self-determination of people proclaimed in the Charter of the United Nations and in the declaration of the granting of Independence to Colonial Countries and Peoples contained in the General Assembly resolution 1514 (XV) of 14 December 1960.
The UN independence committee called upon the UK
to take up all possible measures to prevent a unilateral declaration of independence and, in the event of such a declaration, to take all steps necessary to put an immediate end to the rebellion, with a view to transferring power to a representative government in keeping with the aspirations of the majority of the people.
In spite of this advice, Salisbury disregarded London’s calls, wrongly arguing that the Africans in the colony were satisfied with the RF government, its 1961 constitution and the maintenance of minority rule. The desperate last attempts of London only encouraged the colony to proceed with its plans. With a formidable Salisbury–Pretoria–Lisbon axis in place through the 1964 trade agreement, the unholy trinity’s mission to maintain white supremacy in southern African was well under way. The financial coercive strategies, as London discovered, would have little effect. Expelling Rhodesia from the remaining sterling area would only fulfil one of the colony’s historic intentions of establishing a unitary financial system free of London’s imperial control. Although the loss of preferential treatment in Commonwealth trade appeared daunting on paper, not all Commonwealth nations would comply. Meanwhile, Salisbury had begun to diversify its trade.
Following the collapse of the last negotiation on 3 November 1965, Smith announced that ‘there was no prospect of agreement on the amendments to be made to the 1961 constitution’. The only remaining option to attain independence was ‘to take it, seize it, assume it’. That day, arguing that he wanted to stabilise the country’s external reserves and maintain levels of imports comparable to 1964, but really in final preparation for UDI, Wrathal imposed controls on all imports. In a 20-minute radio broadcast on the fateful November day, Smith announced Rhodesia’s UDI on the basis of the 1961 constitution amended to suit sovereign independence. Going it alone and maintaining that a ‘stand has to be made for principle’, Smith ignored the condemnation of London and several other governments that did not recognise Rhodesian independence. In spite of the calls for refraining from rendering any support to the minority regime by members of the UN General Assembly made in the previous week on 5 November to pre-empt the imminent UDI, the illegal regime of Rhodesia was never entirely isolated and had made sufficient safeguards to sustain the rebellion. At that point a new chapter in the Rhodesian crisis began as it took a new attitude towards negotiations. What then unfolded was to be determined by the manner in which the UK and other countries applied pressure on Rhodesia to concede and consider renegotiating.
Conclusion
After UDI, Rhodesia’s financial system directly financed the colony’s political and economic survival for a decade and a half despite initial claims by London that its rebellion would collapse in a matter of weeks. The role of central financial planning was central Rhodesian survival. Historians have yet to examine this theme in detail. This article begins to fill this gap, arguing that Britain’s financial influence had diminished by the 1960s and was incapable of influencing political decisions in its last colony, Rhodesia. It has examined how currency is central to an understanding of UDI. The article also challenges the view that imperial-colonial ties always endured beyond independence with former colonies as junior partners. The Rhodesia example illustrates that it successfully implemented financial strategies and made economic alliances that helped to frustrate Britain. The Rhodesia crisis is a prime example of imperial hangover. Even as Britain’s imperial ambitions were exhausted, the Rhodesian rebellion provides an example of an overhang in which British imperial responsibilities were required, but its authority in both political and economic terms proved insufficient to discharge its historical authority sufficiently.
The article has also examined the extent to which financial considerations were central to Rhodesia’s UDI experiences, and shifted attention from the issues of the franchise, land and the politics of control that many historians have explored. The article concludes that financial considerations were central in deciding whether or not to proceed with UDI. It reveals London’s own financial vulnerabilities, which limited its capacity to use monetary and financial coercion to stop the rebellion in its colony. The Rhodesian economy, supported by legislative and financial safeguards, as well as by trade cooperation with Lisbon and Pretoria, underpinned the colony’s survival. For the RF state, UDI was a better alternative to sacrificing white supremacy to nationalist independence. Bond aptly summarised that ‘even in the semi-periphery of world capitalism, an autarchic economy can grow extremely rapidly, and an increasingly empowered state can direct investment in a manner conducive to corporate profitability’. The conditions for this centrally controlled dynamism were ‘the powerful yet flexible state economic apparatus, the cohesion and class solidarity of industrialists, existing manufacturing overcapacity’, but even more crucially, ‘the availability of cheap, repressed labour’. An important addition to this analysis includes the exclusion of the vast majority of Africans from the tightly bound urban, ‘white’ economy. UDI introduced a phase where Rhodesia deployed its political alliances and financial strategies to navigate contentious domestic and foreign affairs characterised by an emerging and subsequently escalating internal nationalist struggle for majority rule and the pressure from the community of nations through sanctions and other means.