From 1 January 1900 until amalgamation in 1914, Nigeria was administered as two separate fiscal units under the Colonial Office:
Protectorate of Northern Nigeria (1900–1913, HQ at Zungeru then Kaduna): Established under Lugard following the takeover of Royal Niger Company territory. Revenue sources: caravan tolls at Lokoja, Jebba and Baro; cattle tax (jangali) from the Fulani pastoralists; partial direct tax under the 1906 Native Revenue Proclamation; land revenue; native court fees. Headline figures (Northern Nigeria Blue Books, 1903–1913):
• 1903 revenue: ~£82,000 · expenditure: ~£420,000 — gap met by Imperial Treasury grant • 1907 revenue: ~£275,000 · expenditure: ~£615,000 — grant £340,000 • 1912 revenue: ~£430,000 · expenditure: ~£744,000 — grant £314,000
The Northern Protectorate never balanced its books in its 13-year separate existence. Lugard's 1903–1911 tax reforms attempted to fix this by demanding sterling rather than cowries or thaler — the trigger for the Satiru Rising of 1906 (see How the currency fell before the flag) and persistent emirate non-compliance.
Colony of Lagos & Protectorate of Southern Nigeria (1900–1913, HQ at Lagos): Revenue sources: customs duties at Lagos, Forcados, Calabar and Bonny on imported gin, salt, cloth, gunpowder and tobacco; export duties on palm-oil, palm-kernel, cocoa and rubber; harbour dues; the Lagos Railway working surplus. Headline figures:
• 1900 revenue: ~£480,000 · expenditure: ~£440,000 — surplus £40,000 • 1907 revenue: ~£1.4m · expenditure: ~£1.3m • 1912 revenue: ~£2.1m · expenditure: ~£1.9m
The Southern Protectorate ran consistent surpluses every year from 1903 onward. The asymmetry was the operational reason for the 1914 Amalgamation: Lugard's report on amalgamation (Cmd. 468, 1912) was, at base, a fiscal case for subsidising the North out of the South's customs receipts — a practice that has continued in some form ever since (see the 1914 Money entry).