Economics of the Niassa Company
The Niassa Company was never able to raise sufficient revenue from its investor to provide for a viable infrastructure to the area under its control. Its initial capitalization of 300,000 pounds was only a fraction of what was required. Contemporary colonial thought held that the key to profitability would be a railroad from Port Amelia to Lake Niassa, which would open the interior of the territory to investments in agriculture and mines. However, the cost of such a railroad would have been over 3 million pounds, which the company could not afford.[5]
For revenue, the company partly relied on the chibalo system, a corvée labor policy, which forced the natives to work on plantations, and public works projects. Rubber and sisal were primary revenue crops. The chibalo system enabled the Niassa Company to establish plantations and to force peasants to work for them and prevent them from growing their own crops for sale.
In addition, the company relied on a hut tax to fund its operations. Although theoretically a tax on each dwelling, in reality the tax was on each adult person, which could be paid in cash or in produce. The hut tax, which was two escudo in 1921 was increased to 50 escudo in 1927 and to 85 escudo in 1929. This was party due to devaluation of the escudo, but was also due to a dwindling tax base, as thousands of Mozambicans sought refuge in Tanganyika or Nyasaland to avoid the tax. As a tax of 50 escudo was the equivalent of three months paid labor, many people fell deeply into debt or forced labor.[5]
The territories total profits amounted to only 115,000 pounds in 1926, which it was able to maintain only by ever more onerous application of hut taxes and the British investors refused to extend more capital unless the concession was extended past 1929, which it was not.[3] At the time the concession ended, the company owed more than million pounds to its creditors as opposed to only 75,000 ads in assets.[4]
