The war in Africa saw some major developments in late 1940. Italy had joined the Axis powers with an ambition to dominate the Mediterranean. It seized British Somaliland in August 1940 and then invaded Egypt from Libya the following month. But by the end of the year, the momentum had shifted. On 6 December 1940, Italian-run Cyrenaica fell to Wavell's forces. Wavell telegraphed the War Office asking for guidance on the administration of occupied Italian colonies. The fall of Eritrea and Ethiopia in April 1941 expanded the set of challenges confronting him. Initially, the British government considered the possibility of permitting the continuance of Italian rule in Eritrea and Somalia, and even thought of returning Eritrea to Italian rule after the war. But the rapid collapse of Italian rule in Cyrenaica and Italian East Africa meant that other plans had to be considered. For the time being, Wavell suggested that military government be established in the Italian colonies, with Cyrenaica, Eritrea and Somalia being administered on a ‘care and maintenance basis’ in line with the Hague Convention of 1907. Ethiopia was a special case because of the return to the country of its emperor Haile Selassie.

Some of these questions were discussed at a meeting at the War Office on 30 January 1941. The meeting was chaired by Frederick Bovenschen, soon to be permanent undersecretary at the War Office, and attended by representatives of the Foreign, Colonial and India Offices. At the meeting and a War Cabinet meeting three weeks later, it was decided that the newly conquered territories should be administered by the War Office. The Foreign Office did not have experience of this kind of work, and to give responsibility to the Colonial Office would imply that the new territories might be incorporated into the empire. An interdepartmental committee was set up in March to give advice on these matters to the Secretary of State for War. The work itself was assigned to the Directorate of Military Operations – which was part of the general staff. The Directorate was designated MO11. The plan was to use the form of military government adopted by Allenby in Palestine during the First World War, which was for the commander-in-chief to govern through political officers especially appointed for the work.