On the recommendation of
Alfred Milner, 1st Viscount Milner, Lawley was appointed as Lieutenant-Governor of the
Transvaal in July 1902. The Transvaal Colony had been established on the area which was previously the Boer republic of the same name, and Lawley was its first lieutenant-governor. He arrived in Pretoria at the end of August and was sworn in as lieutenant governor of the Transvaal on 29 September 1902, serving as such until December 1905. South Africa in 1902 was emerging from the bitter conflict of the
Second Boer War and under the leadership of Lord Milner, the Lieutenant Governor of the Transvaal had the arduous task of post war reconstruction. The visit of Joseph Chamberlain, the Colonial Secretary, greatly facilitated this and generous financial provision was made for rebuilding the devastated farms and settlements. However given that Britain had just conquered the Transvaal with its rich gold fields, diamond and platinum mines, this was the very least that could be expected. The administration brought in new cattle to restock the farms, tackled disease among livestock, and re-opened the mines controversially using imported Chinese labour in the Rand Goldfields, an idea backed by Lord Milner.
Joseph Chamberlain went with Lawley on a tour of the Transvaal and endeavoured to establish cordial relations with the defeated Boers. On 25 June 1905, the
Cullinan Diamond was discovered at the Premier Mine, near
Pretoria. The diamond, which was cut to create the four Stars of Africa, was presented by Louis Botha, the First Prime Minister of South Africa, to
King Edward VII in 1907. Lawley's administration also saw the legislation introduced, which led to the creation of the
Kruger National Park. and the
University of the Witwatersrand. At one of the schools established at that time by Bishop William M. Carter and the Mirfield Fathers, a young
Desmond Tutu received his education. Lawley's administration undertook the task of demarcating and allotting separate reserves in the Transvaal for indigenous Africans. In the end, Lawley set aside only about 3% of the Transvaal for Africans. The Kgatla responded by requesting Lawley to merge Kgatla reserves in Bechuanaland and the Crown colony into a single settlement. The request was turned down by Lawley, who, however, permitted Lentshwe to appoint his brother Ramono as his deputy over Saulspoort. Nonetheless, he pointed out the extent of success that had attended their work. The town of Lawley in Transvaal is named after Arthur Lawley.
Mohandas Gandhi founded his Tolstoy model farm near the town of Lawley. Lawley encountered
Mohandas Gandhi in the Transvaal and Gandhi wished him well when he was appointed Governor of the Madras Presidency in India. ==Governor of Madras==