Yakubu Mukhtar's Trade, Merchants and the State in Borno, c. 1893-1939 is an excellent analysis of the economy of Borno during the first few decades of British colonialism. Mukhtar's study endeavors to examine the question of trade and economy in colonial Borno in the context of northern Nigeria's economic reorientation to the coast and the thorny issues of dependency theory and vent for surplus theory. Relying on oral sources, colonial reports, and previous scholarship, Mukhtar found the Borno case to not support either theory strongly. Moreover, he found that the colonial state and its reliance on indirect rule, plus issues of transportation and prices for Borno's exports, made Borno rather late in terms of becoming a major exporter of commodities like gum arabic, cattle, or groundnuts. The thorny issues of compelling peasant producers to shift to gum arabic, impose taxation in cash rather than in kind, and attempting to work with "traditional" rulers led to problems like the persistence of slavery until the 1930s or widespread smuggling across colonial borders. One can see the frustrations of the colonial officialdom who sought to make administration of Borno pay for itself despite the troubled economy inherited from Rabeh.
Indeed, while British colonialism did not bring Borno into the international capitalist system (that already happened through trans-Saharan trade and Sudanic trade in commodities that linked precolonial Borno to Europe and the Mediterranean), British rule did gradually lead to a more thoroughly monetized economy with closer integration into the world capitalist system. With the extension of the railway to Kano and the 1930 extension to Nguru, Borno's hides, skins, gum arabic, cattle, and natron more easily reached Lagos and other regions. European and Levantine commercial firms began to increase their operations in Borno and northeast Nigeria, particularly important as an important node in trade of cattle, kola nuts, cloth, salt, and textiles with the French colonies of Niger and Chad. Again, much of this was not new. Borno had long been a center of Sudanic commerce and its role in the production and distribution of salt, dried fish, livestock, textiles, natron, kola nuts, and other commodities had made it the most important area of the Central Sudan before the Sokoto Caliphate's rise. What British rule did was improve security and, gradually, with the railroad, modern roads, and lorries, increase the scale of trade. Borno remained a peripheral part of Northern Nigeria in comparison to Kano, but the quantity and amount of goods exported to Lagos and beyond gradually led to more local consumers of imported European goods and an indigenous merchant class.
What is most interesting about Mukhtar's study of Borno's economy in the colonial transition is the issue of continuity and change from precolonial patterns. Slavery, as previously mentioned, continued despite British crackdown on slave traders. The system of indirect rule also led to attempts to work with the Shehu and his administration, albeit changing the titled nobility from absentee to settled ones in the villages and towns outside the capital. Borno Resident officials like H.R. Palmer were active in promoting possible exports for Borno, such as gum arabic, while persuading the Shehu to promote gum arabic to the peasantry and engage in trade with European firms, like the Niger Company. Indigenous merchants of Kanuri and Hausa origin, or the once dominant North African traders, also continued to operate in Borno with some enjoying close relations with the traditional authorities. North Africans gradually lost their position of prominence due to the decline of the trans-Saharan trade. While trans-Saharan trade routes connecting Tripolitania with Kano and Zinder sometimes included a stopover to Borno, the second decade of the 20th century saw an end to that. North Africans began to shift to Lagos and working as agents of European firms. Nonetheless, they continued to enjoy a prominent role that led to the establishment of the Fezzan ward of Maiduguri and religious, cultural, and social relations to Borno's authorities. Levantines and even Yemeni traders also entered Borno during this period, sometimes also becoming agents of European firms. Access to credit gave the Levantines an advantage over local traders, who competing with African merchants buying and selling the same commodities. Nonetheless, a number of Hausa, Kanuri and other West African traders became prosperous through kola nuts, cattle, hides, and cotton cloth trade. Their unfamiliarity with bookkeeping, lack of access to credit, and perhaps Islamic and cultural practices that impeded the chances for their businesses to survive the founder's death made it harder for them to maintain a position comparable to that of the Levantines.
Ultimately, the question of Borno's economy and the colonial transition was a mix of moderate improvements and frustrated hopes. New exports like gum arabic and groundnuts replaced slaves, ivory and ostrich plumes, which definitely represented a major shift in Borno's non-Sudanic trade. However, the improvements in transportation were not as widespread or quick enough to have facilitated the development of these exports earlier in the colonial period. Furthermore the persistent problem of food supply and the delicate ecology of the area meant it was not guaranteed that Kanuri peasants would dedicate themselves to gum arabic instead of subsistence crops or groundnuts. Of course, Borno's distance from Lagos and the Atlantic also contributed to its importance. So, while remaining a periphery of Kano and Lagos, Borno was actually hugely important for the trade in cattle and natron from Chad and Niger. Wadai's cattle, for example, were often shipped through Borno to reach Southern Nigeria. Borno was likewise important in producing grain for trade to Niger and Chad. Borno's economic position was thus something of a paradox. It benefited from its geographic position while also suffering from it. The region appears to have experienced something of a boom after 1939 with some exports, but never to have developed the type of successful indigenous business class of Kano. Certainly the benefits of Borno's gradually improved economic situation were also felt unevenly. Peasants and the lower classes may have benefited from access to cash and more affordable imports from Europe, but ongoing issues of transportation, price fluctuations and the depression years must have limited the positive outcomes of this era.