Establishment of Colonial Economy

1. It was export-import oriented colonial economy specialized in production of raw materials for the metropolitan industries and importation of manufactured goods in the colonies.
2. It was based on the exploitation of African resources such as manpower minerals and so on.
3. It was based on monoculture system of production.
4. They specialized in the production of major commodities such as Mauritius - sugarcane and Ghana - cocoa.
5. It involved the building of physical infrastructure such as roads, harbours and railways for easy transportation of raw materials.
6. It was characterized by domination of European. African role of middlemen was suppressed instead of that European established their trade companies.
7. Colonial production was based on coercion. The colonialists used Africa as a dump place for their manufactured commodities such as clothes, wine, sweets and beards.
8. Introduction of money economy.
9. Establishment of processing industries such as cashewnut popping industries.

1. Colonies were expected to provide raw materials, both agricultural products and minerals, to the factories of the European countries. Examples of the agricultural raw materials includes cotton, coffee, sisal, pyre thrum, tea, cocoa and palm oil.
2. Colonies were expected to import manufactured goods like clothes, shoes, blankets and utensils from Europe.
3. The colonized people were expected to provide cheap labor for the benefit of colonial masters.
4. Colonies were also expected to be self-supporting. This means that the colonized people were expected to raise revenues that could support administrative costs of colony.

Preservation

1. Labor unit. e.g. The use of family labor.
2. Traditional system of production e.g. shifting cultivation mixed farming and inter cropping. This was done mainly in the peasant economy.

Creation

1. Introduction of money. e.g. Indian currency like Rupees during Germany rule.
2. Introduction of kipande system. Forced people to walk with identification card.
3. Introduction of cash crops.
4. Taxation.
5. Forced labor.
6. Migrant labor- Migrant labors were the labors come from the distant areas where the labor reservations were established.

Destruction

1. Local handcraft industries were destructed.
2. Importing ready manufactured goods to Africa.
3. Banning of local industries.

1. Presence of resistance from the masses. In some areas in Africa, which were centralized, were strongly resisted new colonial economies systems e.g. disagree to pay taxes, land alienation etc.
2. Ignorance and absence of reactions of people. Colonialists preserved some traditional African economic systems because in some areas Africans were ignorant with a new economic system and were not ready to apply them.
3. Reluctant/ conservativeness of the people. Some areas Africans were not ready for the changes hence colonialists preserved their traditional economic systems.
4. Absence of enough land. In some areas, land alienation was impossible hence, colonialists left the Africans to maintain their traditional economic systems under colonialist supervision.
5. Good traditional labor system. Some of the African societies had good traditional labor system that is family, which ensures constant supply of labor and production, which prevent colonialist to apply new economic systems.
6. Awareness of cash crops production. In some areas, In Africa including Buganda they had knowledge of practices cash crops even before colonial rule hence colonialists preserved them.