“Entrepreneurship in King Leopold’s Congo Free State”

Marc Deloof

University of Antwerp

Abstract: I investigate colonial entrepreneurship in King Leopold’s Congo Free State (CFS). The CFS presents a compelling case for studying colonial entrepreneurship. The global surge in rubber demand in the late 19th century made the CFS an attractive investment destination. Entrepreneurs were able to secure funding for international new ventures from a vibrant Belgian capital market. From 1886 onwards, a significant number of new ventures began operating in the CFS, especially after 1898 when a new railway line made inland Congo more accessible. Most of these ventures were listed on the stock exchanges in Brussels or Antwerp shortly after their founding, allowing for an assessment of the stock performance of a broad sample of entrepreneurial firms that encompasses most private business operations in the CFS. An analysis of director interlocks between these firms and Belgian banks listed on the Brussels Stock Exchange (BSE) reveals that the Belgian financial establishment was a crucial contributor to CFS entrepreneurship from the start. While the number of CFS firms was small and their economic importance was limited, almost all the large financial firms, including the Société Générale de Belgique, had two or more CFS firm directors on their board. Financial firms were much more involved in CFS firms than in other Belgian firms operating abroad. The performance of CFS firms was generally disastrous. Concession firms with a CFS ownership stake performed better than independent firms, but they were still poor performers compared to firms operating  in Belgium. One of the few winners in the CFS was the CCCI, a holding company that was established in 1886 and controlled some of the largest firms operating in the CFS. The high returns of the CCCI were driven by two very profitable investments. Consistent with the “during a gold rush, sell shovels” adage, their most profitable investment was the Compagnie du Chemin de Fer du Congo which operated the railway that connected inland Congo with the sea. Their second highly profitable investment was the Compagnie du Katanga, a concession company that had the exclusive mining rights for the Katanga region in the south-east of Congo.