Depression in economic means a period in an industrial nation characterized by low production and sales, unemployment, inflation, decline of trade etc.  thus, Great Depression was the worst longest economic slump that featured the capitalist world following the horrors of WW1.

This is an economic crisis within the capitalist economy which is caused by over production starting from 1929 – 1933.


The economic Depression occurred in 1929 when in 24th October the US – New York stock market crashed and went until 1940’s.


1. Existence of high inflations.

2. Mass unemployment due to lack of economic activities.

3. Low purchasing power among the population because of unemployment.

4. Protectionism policy; whereby different nations adopted various policies to domestic market protection.

5. It characterized by famine, starvation and hunger hence death of many people.

6. Low production of industrial goods and general fall prices in a long run.

7. Closure of financial institutions i.e. banks and insurance companies.

8. Poor provisional of social services and closure of industries.


Qn:    How did the Great Depression affect the East Africa and what were solutions to the problem?
Qn:    Examine the effects of the Great Depression (1929 – 1933) on Africa

1. The International Credit System

After WW1, USA became the world’s chief creditor to European powers.  Much of Europeans remained dependent on USA for credit.  However in 1929, there was financial panic in USA as American investors began pulling their money and demanding repayment of loans, thus the collapse of the New York stock exchange affected many West European powers.

2.  The nature of capitalist production system

Production under capitalism is so competitive hence a depression is inevitable since the production under capitalist system involves 4 stages namely:- Boom, Crisis, Depression and recovery.

3. The outbreak of Russian socialist revolution of 17th October 1917

Following the Russian socialist revolution, the socialist powers refused to buy the goods from the capitalist powers.  So, the capitalist powers had lost market for their goods hence over production.

4.   The Great Crash of the New York stock exchange

The wall street crash of 24th October 1929.  It is the time when there was financial panic in USA, many investors started to sell their shares thus causing price production.

5. Effects of the WWI of 1914 – 1918.

This led to the decline of European nation while economy of U.S.A was gain momentum at the end of the war the purchasing power of European nations declined while production of raw materials and commodities increased.

In U.S.A production become non sellable and profitless which accelerated to price fractuation in U.S.A hence this led to G.E.D of 1929 – 1933.

6. Over production.

U.S.A produced manufactured goods because U.S.A thought that her markets were stable as it was before and during WWI e.g. U.S.A produced more food, zinc, copper, cocoa etc.

This led to the fall of process in U.S.A and European nation were not able to absorb all manufactured goods this led several industries bankrupt and closed, farmers also were not producing more because they had no money to run agricultural activities, all these led to profit less among the formers and industrialist hence the G.E.D in U.S.A.

7. Socialist revolution of 1917.

Russia introduced the socialist revolution after the Bolshevik revolution of 1917 whereby began to spread different parts of the world, this led imperialist nations to lose markets to those socialist nations,

Hence over production of raw materials and manufactured goods in USA and the fall prices which led to the occurrence of G.E.D.

8. The effect of protectionist policy.

Immediately after the WWI U.S.A was economically stable which helped other European countries to revive their own economies, however the European countries used the loans from U.S.A to restrict their industries and stabilize the economy & at the same time European nations initiated protectionist policy to defend their industries and agricultural production,

This led USA to lose market in European nations hence it increased agricultural productions and industrial productions in U.S.A leading to overproduction, profitless among the farmers and industrialist hence the G.E.D in U.S.A.

9. The collapse of the New York exchange in Oct 1929.

Because this had a lot of impacts on U.S.A economy e.g. the poor people spend their savings to buy few shares while shares were not sold due to lack of money among the traders and workers.

Also stock exchange lost value whereby shares were sold on credits, banks were run bankrupt due to the fact did not return the money because shares were not sold as a result links were closed, this led to unemployment to the people worked in industries and financial institutions,

Also farmers who borrowed money from the banks to buy shares did not return the money to banks because shares lost value and were not sold, asa result of farmers to undergo crisis and their farms were taken by bankers due to the failure of paying back the debt hence G.E.D in U.S.A


1. Industrial production dropped severely. This is because there was the fall of industrial and agricultural production hence industries and agricultural sector were producing under their capacity.

2. Fall of process of raw materials and manufactured and goods which accelerated to propping of agricultural production and commodities.

3. Unemployment where by many workers were sucked or taken away from their work so as to reduce the cost of production.

4. Low wages and salaries to those few remained employed.

5. Fall of international trade; this is due to protectionism policy but also accelerated same countries to reduce custom duties in order to attract traders.

6. Currencies lost their values e.g. German Dutch Mark.

6. Most of the imperialist countries started to adopt protectionism policy in order to protect their domestic market, industries and agricultural sector.

7. The fall of purchasing power because many people had unemployed and countries declined their economy.

8. The rise of dictatorship in the world especially in Italy, Germany and Japan where by directors in those nations used the effect of G.E.D to mobilize people and get to leadership.

9. GED finalized almost the decline of Britain super powerness.

10. It led to reduction of public servicesin order to reduce the cost of administration.

11. Rise of dictatorship in Europe and Japan.


Qn: How did the Great Depression affect East Africa and what were solutions to the problems? 

As European powers were effected by the Great Depression, it became inevitable for Africa to be affected by the Great Depression due to the fact that African colonies were dependent on Imperialist European.

(a) Fall of commodity price especially agricultural output

The price depressed made African farmers get limited benefit from their cash crops like cotton, sisal, coffee, tea, etc.

(b) Fall of Government revenue

eg. Hut tax and poll tax which in 1929 – 1930 was £ 750,000 dropped to £ 450,000 in 1931 – 1932.

(c) Mass unemployment

The fall of prices in agricultural products such as coffee and cotton and the reduction of wages to workers led to many migrant labourers to be unemployed (reduced from work).

(d) Intensive exploitation

The economic depression led to establishment of agricultural schemes and projects eg in Tanganyika, the introduction of Groundnuts schemes in Nachingwea, Kongwa and Urambo.

(e) It led to the rise and consolidation of African consciousness

due to formation of social and welfare associations which united Africans against colonialism eg. In Tanganyika, the Tanganyika African Association (T.A.A.) was formed in 1929 by Ali Mponda.


1. The fall prices of raw materials.

2. Massive unemployment because Africans who were employed in colonial sectors majority of them were sucked because colonialist faced crisis.

3. Low wages paid to few employed people in colonial sectors.

4. It led to intensification of exploitation/high exploitation of Africa resources because the colonialist exploited more the African resources in order to compensate the problem of crisis in their countries.

5. Reduction of social services in the colonies in order to reduce the cost of administration.

6. The increase of taxation in order colonialist to get money from colonies to revive their economy.

7. The fall of purchasing power in the colonies.

8. The rise of prices of manufactured goods in the colonies.

9. Increased the struggle for independence in Africa due to the effects of G.E.D in the colonies like exploitation.

10. The formation of cooperative unions/societies in order to demand for their rights like high wages, good working condition, high prices for their raw material etc.


1. Farmers of medium and small sizes were affected following the fall prices of their raw materials, thus led them to fail to pay the rent they took from the bank hence forced them to sell their land and remain tenants.

2. The financial system were also affected which led to the collapse of New York stock exchange and bankrupt of many banks reg. It was estimated that by 1932, ½ of the total bank had run bankrupt.

3. Unemployment, Many Americans were unemployed due to the effects of G.E.D whereby it was estimated that almost 17 mill of people were jobless in America & in New York alone 25 mill were jobless.

4. The fall process of raw materials. This caused farmers to reduce quantities productivity e.g. wheat and barley so as to create the scarcity of raw materials.

5. The decline of industrial period, this led industries to start producing under their capacity fearing over production of manufacturing goods.


(a) Introduction of grows more campaigns among Africa population.

In Tanganyika & Nigeria peasants were forced to grow move cash crops eg. The destocking of cattle introduced in sukuma land to force people produce cotton, Nachingwea groundnut scheme, Uruguru terracing scheme.

(b) Colonial Education policy changed

to allow agricultural school to be established in Africa to train agricultural instructors e.g  Ulatiguru & Nyakato in Mwanza (TZ), Yaba High College in Nigeria and Makerere in Uganda etc.

(c) Extension of colonial infrastructures

to facilitate transportation of Raw materials from producing areas to the coast for export e.g in 1928 the branch from Tabora to Mwanza and from Moshi to Arusha was build.

(d) Establishment of import substitution industries and processing industries were established in Africa e.g Coffee refineries and cotton ginneries were established to reduce the bulky of raw materials for export.

(e) Expenditures on all Government projects were reduced e.g The budget for welfare services such as water supply, housing, hospitals etc. were cut off.

Qns: Why Russia was not affected by G.E.D of 1929 – 1933?

1. Withdrawing of Russia from WWI of 1914 –1918.

This led Russia to concentrate on production and building her own economy for so long and stopped Russia to spend more in the war likewise but also Russia did not pay for war damage.

2. Protection policy.

Russia did not import and export goods from any capitalist nation. It avoided the direct contact with capitalist in trading system.

3. Good leadership of Russia leaders like Lenin, Joseph Stalin.

The policy of these leaders was to build Russia and use resources available effectively and not depending from the capitalist nation.

4. No over production of goods for competition with the capitalist.

This enabled Russia to produce goods which could be used by only Russians in order to build their own economy and not otherwise.

5. The Bolshevik revolution of 1917.

This brought socialism and useful shearing of production, this led Russia to use production for all people in Russia societies and not for the capitalist.

6. Russia had no colonial empire.

This avoided Russia to have more over production to spend in the colonies as the capitalist produced hence Russia had to produce for the consumption of all people in Russian society which did not learn to over production of manufactured goods.



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