This paper traces the process of the decline of African middlemen in Eastern Nigeria from wealthy entrepreneurs of the late nineteenth century to petty traders after 1930. Four phases are identified in their decline. During the first phase, 1900–5, the middlemen lost only the political control of their trading areas but benefited commercially. The establishment of colonial rule expanded their market. And with the reluctance of expatriate firms to move into the interior, the continued ignorance of the natives of the actual prices of their produce and of imported goods, and the encouragement from the colonial administrators, African middlemen prospered.
These advantages were lost during the second phase, 1905–16. As the firms began to move inland from 1905, they traded with the natives and fostered a new group of smaller and dependent middlemen. The middlemen's market began to contract and their wealth declined. Their fortunes worsened during the third phase, 1916–30. With the opening of the Eastern Railway to traffic in 1916 and the increased construction of roads during this period, the firms intensified their penetration of the interior, swallowing up what remained of the middlemen's market. The introduction of produce inspection in Eastern Nigeria in 1928 added more hardships for the middlemen, putting many out of business. And by 1930 the trust system, upon which most middlemen depended after 1916 for raising their trading capital, collapsed, leaving most of them impoverished.
Thus, after 1930 African middlemen were no more than petty traders, trading with little capital and making marginal profit. They became incapable of challenging the expatriate firms in the import–export trade as their predecessors had done in the nineteenth century. The firms employed various trade malpractices to ensure that the African traders retained this status until the 1940s.