The nationalisation of British banks in post-colonial Tanzania: did the banks’ net capital export position and home government support influence compensation negotiation outcomes?

Using materials from three relevant archives, this article explores the 1967 Nationalisation of the banking industry in Tanzania with particular focus on the three British banks that dominated the sector. Although it is widely agreed that prompt, adequate, and effective compensation should be paid for such nationalisations, studies in this arena have rarely focused on the contestations that impact on the definition and operationalisation of what constitutes fair compensation. This article explores the above dynamics using the Obsolescing Bargaining Power Theory. Evidence in this article suggests that the bargaining position of foreign multinational banks is stronger when they are net exporters of capital from their host countries. Also, the negotiating position of the British banks was further strengthened by the overt and covert support they received from the British Government.