Mercantilism refers to large scale trade or commercial trade conducted through overseas. The first stage of capitalism that appeared during 15th Century where by trade and commerce was conducted by European countries with the continent of Africa, Asia and America through overseas trade and also silver (precious metal) were used as the coin.
Western Europe and Africa had a relationship which ensured the transfer of wealth from Africa to Europe. According to W.Rodney on his book How Europe under-developed Africa 1972 argued that; over that period Africa helped to develop Western Europe and at the same time Europe under-developed Africa. Trade helped Europe to get numerous developments also the North America benefited from this merchantalism while Africa did not benefit. The impacts of Merchantalism in Europe and Africa are as follow;
1. Gold and silver accumulated during this period played a very important role in expanding capitalist capital in the economy of Western Europe because it was gold and silver that determined the value of capitalist to develop in terms of money.
2. These trades speed up the European technological development. Example the Trade helped the Europeans in the development of ship building from the 15 th C-19 th C where by sea going vessels of different sizes were designed for slave trade and carrying raw materials from America to Europe and later carry commodities to other parts of the world where markets were available.
3. Merchantalism led to the rise of Sea ports town like Liverpool, Bristol, etc. in these sea ports towns there was a development of manufacturing centers like Ian Cashing which depended on the growth of the port of river.
4. Speed up the development of industrial sector; industries such as textile industries, flour milling, ship industry etc. With development of industries in Europe, it helped European countries to develop as far as capitalism was concerned.
5. The Capital derived from merchantalism helped to a great deal to strengthen transitional links within Western European economy. Example sugar from Caribbean islands was exported from England to France and other parts of the European continent.
6. Merchantalism continued to be source for capital accumulation by European merchants whereby the capital was to be invested in investments such as banks, industries, transport and communication for European development hence capital accumulation was possible due to much exploitation of African resources during merchantalism.