This paper argues that attempts by the European colonial powers to implement welfare measures in Africa after World War II represented efforts to newly legitimize and to stabilize colonial rule as well as to make colonial territories south of the Sahara more productive. Soon, however, colonial governments and politicians had to realize that their social policies created massive problems, but did not stabilize neither the colonial economies nor the ideological basis of colonial authority. Still, the project of the welfare state exerted considerable attraction on African nationalist elites. After indepedence they designed their new states as welfare states, but were soon confronted with the legacies of a weak and authoritarian colonial state and with very limited economic possibilities, especially after the oil shock 1973/74. Around this time, the new term "urban informal economy" started to be used to capture what didn’t fit inside national labour and welfare regulations. This analytically highly problematic term pointed to the continued - indeed growing - importance of forms of work and welfare that lay outside the forms of labour and welfare legislations which African countries inherited at independence and outside the limits of the imagination of policy-makers who thought they were modernizing Africa.