The Transvaal’s unsuccessful campaign against the Pedi in 1876 was interpreted by British policymakers as evidence of the republic’s impending collapse. Lord Carnarvon appointed Theophilus Shepstone Special Commissioner for the Transvaal and empowered him on 9 October 1876 to take over the republic with or without the consent of its volksraad. The decision combined political opportunity with wider strategic and economic ambitions.

The Transvaal was believed to contain mineral deposits that could make it the richest part of South Africa. It also obstructed the movement of African labour from the republic and neighbouring regions, while its proposed railway to Delagoa Bay threatened to reduce dependence on British colonial harbours and open relations with foreign powers. Carnarvon additionally expected annexation to encircle the Orange Free State and pressure it into an agreement.

Shepstone took over the Transvaal on 12 April 1877. The operation was relatively simple because the republic was bankrupt and its president unpopular, but it failed to conciliate the Boers. Their determination to recover independence strengthened, and the annexation became a major obstacle to the British federation scheme. Carnarvon then appointed Sir Bartle Frere governor and high commissioner to advance that scheme.