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ZUMA SUCCESSION: The Businessman vs The Ex-wife… or Is it All Smoke and Mirrors?

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Cape Town, South Africa – THE SUCCESSION WILL NOT WAIT FOR THE STARTING GUN

The starting gun has yet to go off, but that hasn’t stopped the campaigns to succeed President Jacob Zuma at Union Buildings from racing ahead.

At the end of January this year, South Africa’s ruling party, the African National Congress finally announced the exact date of the party’s 54th National Conference in December 2017, and by so doing, drew a line under the phony war between factions of the party for what I am calling the Zuma Succession.

Like the original ‘phony war’– the derisive term given by journalists to the period from October 1939 when Germany invaded Poland to March 1940 when no land operations were undertaken by either the Allies or the Germans – the phony ANC war among those most likely to succeed President Jacob Zuma at the helm of the continent’s oldest liberation movement has seen no real action and has been a time when the various factions of the party have been busy testing the waters to measure support for their preferred candidates in the battle to come.

The phony ANC war among those most likely to succeed President Jacob Zuma at the helm of the continent’s oldest liberation movement has seen no real action and has been a time when the various factions of the party have been busy testing the waters

According to a statement from the party’s headquarters at the end of a three-day National Executive Committee (NEC) meeting on January 27, ‘The National Conference will be held from December 16-20 in Gauteng.’

And while officially the party has announced a roadmap to be taken before potential candidates can begin to marshal their forces to lobby for support for leadership positions at the conference in December, in reality the race has been on ever since October 2015, when President Zuma declared he would not be standing for an extra term as president of the party.

The ANC’s conventions dictate that hopefuls for party posts should not campaign for themselves and that their supporters should wait for nominations to be made at branch level, which in this case would be in September and October this year.

As the party battles to contain political factions from jumping the gun ahead of its elective conference in December, Secretary General Gwede Mantashe did not seem to help matters when he said recently that the party would have to ask itself difficult questions if it did not elect its deputy president to succeed the outgoing president.

The Business Day news website quoted Mantasheas saying: ‘Now, I don’t want us to create traditions that do not exist, but when we elect a deputy president, you should be having succession in mind, that’s a more correct argument. Once you have a deputy and you elect someone else, you ask yourself difficult questions: Is this deputy not competent enough to be the successor?’

At the party’s NEC in January, all the unofficial campaigning and strategising by the various factions and their putative candidates was supposed to have been rendered a false start. However, it is clear that unlike at the Olympics, nobody appears to have been disqualified for jumping the gun.

It is generally agreed among political commentators and analysts that the ANC is split into two broad camps. These are the so-called tenderpreneur faction and the ‘reformist’ faction.

 

A SPANNER AMONG THE TENDERS

Nevertheless, the president’s 2015 statement about standing down, did throw a spanner in the works for the tenderpreneur faction that had reportedly been working on the premise that Zuma would hang on as the party’s head, until the party’s National Governing Council meeting of 2019.

This group hoped that by so doing, Zuma would help the party harmonise its presidential term with that of the national government.

However, this faction seems to have fallen foul of the principle of political uncertainty, which is contrary to Isaac Newton’s clockwork universe, where everything follows clear-cut laws on how to move and prediction is easy if you know the starting conditions. The political uncertainty principle makes such prediction very fuzzy.

Now, I don’t want us to create traditions that do not exist, but when we elect a deputy president, you should be having succession in mind, that’s a more correct argument- ANC Sec-Gen Gwede Mantashe

It would seem however that not all was lost for the group. Their main aim is to prevent Zuma being succeeded by trade unionist-turned democracy negotiator, turned uber-successful businessman and deputy leader of both the party and the country, Cyril Ramaphosa. If Zuma won’t hang on, then their plan B is for a woman to succeed Jacob Zuma and for this campaign they have the backing of the powerful ANC Women’s League.

By the way, their candidate is not just any woman, but NkosazanaDlamini- Zuma, until recently the head of the African Union and an ANC heavyweight in her own right. She was also once married to President Jacob Zuma.

Interestingly, President Zuma himself has for some time been suggesting that it was time South Africa had a female president – a move which has been seen by his supporters as being outright backing for Dlamini-Zuma.

In fact, one commentator, Susan Booysen, a professor at the Wits School of Governance, suggested as far back as 2014 that the plan was for Dlamini-Zuma to be parachuted into the party presidency via the creation of a position of second deputy president, as a way to dilute Ramaphosa’s standing.

The tenderpreneur faction represents the status quo. However, recently, it was reported that the pro-Zumafaction may be reconsidering their backing for Dlamini-Zuma because she appears to have reservations about having her own reputation and legacy tainted by being seen to favour them. The former AU chair has reportedly been unwilling to give any undertakings that she will pander to their agenda.

 

THE WIFE IS HER OWN WOMAN, IT SEEMS

Dlamini-Zuma may have been married to Jacob Zuma once and may still have cordial ties with him, but she has also been known to chart her own political path and at times this has been one diametrically opposed to the president’s.

According to one analyst, ‘There are apparently also concerns, including from the president, that Dlamini-Zuma still maintains a close relationship with former president Thabo Mbeki. It is still a sticky point that at the ANC’s Polokwane Conference in 2007, Dlamini-Zuma featured on both the Zuma and Mbeki slates but she declined the Zuma camps’ nomination and stood on Mbeki’s ticket.’

While it is common knowledge that Zuma and his predecessor Mbeki see eye to eye on very little if anything at all, the one thing that is generally agreed by political observers is that both men have showed an antipathy to their  deputy ascending to the top job. Earlier in the year,Zuma told interviewers from the SABC that it was not ANC policy or tradition that an ANC deputy president should automatically replace a president during an elective conference.

In Kwa Zulu Natal, a hotbed of Zuma support, there is open opposition to Ramaphosa in the ANC ranks. Ramaphosa has also been vigorously opposed by the ANC Women’s League, the party’s Youth League and the uMkhonto we Sizwe (abbreviated as MK) Veterans league. All of these groupings have already pronounced Dlamini-Zuma as their preferred candidate to succeed Jacob Zuma both as party and national president.

Conventionally, the ANC prefers that aspirants not promote their own candidacy and instead pushes for nominations to be made at branch level. Of course, in these situations, what the party would prefer and what actually happens tend to be two different things.

On the other hand, the traditions of the ANC, which have seen the deputy president ascend to the presidency, suggest that the scales are tipped in favour of the ‘reformists’ who back Ramaphosa. However, Ramaphosa’s silence on important matters have caused him to be seen as aloof.

 

THE JOHANNESBURG CANDIDATE

Nevertheless, and for whatever it may count for the voters in the party’s election, in the boardrooms of the firms that make up the Johannesburg Stock Exchange,Ramaphosa is the best candidate. He has also been endorsed by the Congress of South African Trade Unions (Cosatu) a powerful bloc in the tripartite alliance (which also comprises the ANC and the South African Communist Party) that has enormous influence on who eventually takes over the ANC leadership.

Already the undeclared contest for the top job has caused friction among the party cadres. For instance, an NEC member has already publicly put down the Youth League president, Collen Maine, for going ahead to endorse ‘certain leaders for the presidency without the mandate to do so.’

It is generally agreed that the ANC is split into two broad camps:The so-called tenderpreneur faction and the ‘reformist’ faction

But as the factions square up against each other in the phony war, seasoned Zuma watchers are expecting the wily old operator to have an agenda for his own succession very different from the one ascribed to him in the current accepted narrative. It is entirely possible that Zuma’s ready support for Dlamini-Zuma is all smoke and mirrors to cover the identity his real preferred successor.

There have been suggestions that the president’s support for Dlamini-Zuma over Ramaphosa is calculated and that he is fully expecting Dlamini-Zuma to be rejected because of her perceived close ties to him and that this would then prepare the ground for a ‘compromise’ candidate who would be the person Zuma has wanted to take over from him all along.

The question, however, is just who this ‘dark horse’ candidate could be if he or she even exists?

Other than Dlamini-Zuma and Ramaphosa, there have been other names mentioned as possible successors to President Zuma. The frontrunners among these are Speaker of parliament BalekaMbete and Home Affairs Minister MalusiGigaba.

Mbete, who is seen as close to the president, would fit the mould of a female successor and has already made statements to suggest that she may fancy a shot at the main chance. In April last year, a commentator on the Daily Maverick website,RanjeniMunusamy, wrote that the Speaker, who also happens to be ANC chairwoman, appeared, at that time anyway, to have the support of the ‘premier league,’ an informal grouping associated with President Zuma and that she had spoken of having had ‘many people’ approach her to run for the ANC president’s job.

 

THE YOUTH LEAGUE FACTOR

Gigaba, on the other hand, would fit into the narrative where some ANC members have been calling for generational change at the top of the party. Born in 1971, Gigaba is a former president of the ANC Youth League, which over the years has come to be viewed as an influential component within the broader ANC, one that provides a training ground for future ANC leaders. Nelson Mandela and Julius Malema, now head of the opposition Economic Freedom Front party, were also former presidents of the league. Gigaba too has said he is not averse to suggestions that he lead the party, hinting during an interview in August 2016 that while it was not up to him to decide who became the next leader, he was available.

https://www.youtube.com/watch?v=tqC44XldMvY

That said, the big money at the moment is on either Ramaphosa or Dlamini-Zuma. They are the foremost candidates and also the two with the most to prove.

The pro-Zuma factions of the party would like to see his legacy continued by Dlamini-Zuma while the anti-Zuma camp are backing Ramaphosa hoping he will rid the party of Zuma’s legacy of perceived corruption.

Below are biographies of both the leading hopefuls in the Zuma Succession race. The profiles were compiled from multiple sources:

 

Cyril Ramaphosa

Cyril Ramaphosa was born on November 17,1952.

He was elected Secretary General of the African National Congress in 1991. He is widely respected as a skilful negotiator and strategist, and played a leading role as an ANC negotiator at CODESA (Convention for a Democratic South Africa).

He is also known for the role he played in building up the National Union of Mineworkers into the biggest trade union in South Africa.

Following the first democratic elections in 1994, Ramaphosa became a Member of Parliament. He was elected chairperson of the Constitutional Assembly on May 24,1994 and played a central role in the drafting of the South African Constitution.

Many expected him to go straight into national politics, but it was not to be. The story goes that he wanted to become Nelson Mandela’s deputy in 1994, and that when Mandela overlooked him, he became so upset that he refused to attend Mandela’s inauguration as president and he also declined a post in government.

If he could not be king in the political realm, he would conquer the economic one.

After leaving mainstream politics, Ramaphosa became the symbol of black capitalism in South Africa. Among other positions, he is executive chairman of Shanduka Group, a company he founded. Shanduka Group has investments in the resources sector, energy sector, real estate, banking, insurance, and telecoms (SEACOM). He is also chairman of the Bidvest Group and MTN. His other non-executive directorships include MacsteelHoldings, Alexander Forbes, Standard Bank and SABMiller. In March 2007, he was appointed non-executive joint chairman of Mondi, a leading international paper and packaging group, when the company demerged from Anglo American plc.

There have been suggestions that the president’s support for Dlamini-Zuma over Ramaphosa is calculated and that he is fully expecting Dlamini-Zuma to be rejected

Today, according to a BBC profile, Ramaphosa is the second richest black businessman in South Africa, with global financial publication Forbes putting his wealth at $675million. (The richest black businessman just happens to be his brother-in-law, Patrice Mostsepe.)

Ramaphosa always kept a foothold in the ANC, serving on its top leadership body, the NEC – a position that, his critics say, gave him insider information and unparalleled access to government ministers as he built his business empire.

The BBC wrote of him: ‘These accusations grew after police killed 34 workers in August 2012 at the Marikana platinum mine –  the most deadly police action since white minority rule ended.

‘With Mr Ramaphosa a director in Lonmin– the multinational that owns the mine – he was accused of betraying the workers he once fought for, especially after e-mails emerged showing he had called for action against the miners for engaging in “dastardly criminal acts” – an apparent reference to their wildcat and violent strike.’

Although to some his reputation was tarnished, his election as ANC deputy leader showed he retained massive support among the party’s rank and file, dating back to his role in the struggle against apartheid.

His nomination for the post was supported by influential figures in the National Union of Mineworkers, which he founded in 1982, as well as the South African Communist Party – a clear sign that, despite his wealth, they do not believe he has abandoned his roots.

 

Nkosazana Clarice Dlamini-Zuma

Born on January 27,1949 in KwaZulu-Natal, South Africa,  NkosazanaDlamini-Zuma is the immediate former Chairperson of the African Union. Previously, she served as the South African minister of home affairs.

She is a longstanding heavyweight in the ANC, boasting anti-apartheid struggle credentials as an underground member of the party when it was still banned. Some of these positions include being a member of the NECand the party’s National Working Committee. She is also a member of the Women’s League NEC and the National Progressive Women’s Movement of South Africa.

A medical doctor by training, Dlamini-Zuma was married to President Jacob Zuma from 1972 to 1998. The couple met in exile in Swaziland, during the depths of the apartheid era. In 1972, Dlamini-Zuma became Zuma’ssecond wife and the couple went on to have four children.

Though divorced, they are seen to still enjoy good relations, often shaking hands and hugging in public at ANC events or government conferences. Nevertheless, their political relationship has been through ups and downs with Ms Dlamini-Zuma at times seeming to back her former husband, and at other times overtly siding against him.

Dlamini-Zuma went on to become democratic South Africa’s first health minister between 1994-1999, having been appointed by Nelson Mandela. His successor, Thabo Mbeki, put her in charge of foreign affairs, where she worked to implement his much-derided ‘quiet diplomacy’ with neighbouring Zimbabwe as it sank into a deep crisis under President Robert Mugabe.

In Zuma’s administration, she served as home affairs minister, where she was credited with reform of a department mired in bureaucracy and corruption, before she took the African Union Commission posting in 2012.

The soft-spoken Dlamini-Zuma appears to lack the easy charm and common touch that her former husband has used so effectively to shore up his support, and she still must overcome widespread prejudice over her gender.

According to a BBC profile, the suspicion, now openly articulated by President Zuma’s opponents, is that the current South African leader is actively promoting his ex-wife’s bid to replace him, in the belief that as president, she will be able and willing to protect him from what he sees as a range of politicallymotivated legal challenges and corruption investigations that could well pursue him after he leaves office.

Ms Dlamini-Zuma will have to position herself as something other than a continuity candidate if she is not only to win December’s vote, but to convince South Africans that after nearly a quarter of a century in power, the ANC still deserves to remain in power come 2019.

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Mr Githahu has worked across the media in Kenya since 1989 with stints at almost all the major media houses and is now a freelance writer/editor based in Cape Town.

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Fire and Chaos: Mathare’s Chang’aa Problem and the Optics of Policing

In the 1980s and 1990s parts of Mathare gradually became the epicenter of the large scale production and distribution in Nairobi of chang’aa and a booming local economy emerged that has since become a major source of contestation between the police and the residents.

Fire and Chaos: Mathare’s Chang’aa Problem and the Optics of Policing
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On Wednesday 3 April 2019, social workers, youth group members, activists and friends, all residents of Mathare, huddled together on the top floor of the Macharia building near the Olympic petrol station off Juja road in Nairobi, as they watched in horror, as two schools were engulfed in a fire. Thick, black smoke circled up and soon blanketed the entire valley. Alongside the two schools, another thirty or so houses quickly burned down to ashes in the raging fire. People raced to quell the fire with buckets of water, but police blocked their paths. Angry shouts filled the air as licking flames destroyed businesses, schools and homes in a matter of minutes.

This act of arson by police of a part of the Mathare neighborhood took place on the fourth day of a raid against the local alcohol economy, spearheaded by the notorious ‘killer cop’ known simply as Rashid. A public execution of two teenagers in Eastleigh on 31 March 2017 caught on amateur video that went viral established Ahmed Rashid’s notoriety. Ironically, the raid under his command, targeting the local alcohol economy in Mathare, started on Sunday 31 March 2019—exactly two years since that public execution. Over that period of two years, Rashid has killed, maimed and harassed many people, particularly young poor men from Mathare, and with absolute impunity.

On Sunday in late March, Rashid walked into Mathare accompanied by a troop of police officers from different police squads down the valley where they barged into homes and bars to destroy alcohol and other belongings of local business owners and their employees. The Pangani OCS (Officer Commanding Police Station) and the Area Chief both claim to ‘have had nothing to do with the raid’, despite eyewitnesses sharing accounts of regular police and AP (Administrative Police) officers and equipment active during the raid. Mathare residents wondered how the police could conduct a full-scale police raid lasting a number of days without the consent of the authorities. That first night of the raid in Mathare was marked with fear, chaos and gunshots. Residents lost weeks of work and earnings, and others nursed bruises and deep cuts whilst defending homes and properties from the pillaging police. By Monday morning, that part of Mathare sunk into deep lamentation.

Kingi from the Social Justice Centers Working Group found his grandmother crying on Monday morning; Shosho Kingi has distilled and sold alcohol for more than four decades and has raised her children, grandchildren and great-grandchildren while doing so. The police had poured her kangara, the distilling mixture, which had been almost ready for cooking. Subsequently, she had lost 4500 shillings, her monthly earnings, and was left seriously in debt. Thousands of small business owners and their employees and tens of thousands of their dependents suffered the same fate. On Monday, all the jiko’s (‘kitchens’) near the river remained closed; no one could work while the police patrolled in search of alcohol and production tools to destroy. This went on until on Wednesday, tensions between hungry and angry residents and police culminated into protests by alcohol distillers.

History of the local economy

To understand the impact of this crackdown on people living and working in Mathare, a brief insight into the history of the alcohol economy is crucial. As early as the 1930s, women who settled in abandoned parts of the quarry that later came to be known as Mathare earned money through sex work and selling home-brewed alcohol such as busaa and chang’aa. The colonial capital Nairobi only allowed a limited number of ‘native’ bachelors living in designated housing facilities. This area was also wedged in by the Royal Airforce Eastleigh Base (currently known as Moi Air Base), an askari barrack, and a transit camp for the Kings African Rifles. Other police barracks and army bases further away from Mathare also had close ties to sex workers in Pumwani, Pangani and Mathare. The massive influx of soldiers and prisoners of war (Italian POWs) during 1940-45 further attracted a growing number of female sex workers who increasingly settled in Mathare where rent was cheaper than in Pumwani.

As early as the 1930s, women who settled in abandoned parts of the quarry that later came to be known as Mathare earned money through sex work and selling home-brewed alcohol such as busaa and chang’aa

These women were among the many young people who were forced to leave their increasingly overcrowded homesteads in the ‘Native Reserves’ in the pre-WWII colonial period in search of work for cash to pay for hut tax, among other things. Even if women comprised the majority of residents in Mathare from the onset, men also increasingly came to live here. During the late 1930s, many of the rural-urban migrants also came from other illegalized squatter communities in the Rift Valley, where former farm workers had been displaced from European farms as a result of the gradual mechanization of farm work. Following these and other developments, Mathare became the bedrock of urban resistance against the colonial government and formed an important node in the Kenya Land and Freedom Armies (KLFAs)—also known as ‘Mau Mau’. The colonial government detained large sections of what it considered to be the ‘Kikuyu’ population and transformed many ‘Native Reserves into ‘emergency villages’, which functioned as concentration camps during the ‘state of emergency’. Close to a million people were locked inside these camps, and tens of thousands of people, suspected of being freedom fighters, were imprisoned in makeshift prison camps scattered all over Kenya. Upon their release, many of these ex-detainees could not return to the ‘Native Reserves’, as most of these areas were by now seriously overpopulated, while other places had been confiscated by the different authorities that had collaborated with the colonial government, with local chiefs being an example. As a consequence, released from prison, these men and women had no choice but to join illegalized squatter communities in either rural or urban areas, including Mathare.

After independence in 1963, alcohol production and distribution remained a home-based economy in Mathare, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the late 1980s and early 1990s that parts of Mathare (especially the following ‘villages’: Bondeni, Shantit and Mabatani) gradually became the epicenter of the largescale production and distribution in Nairobi of chang’aa. According to several bar owners we spoke with, the influx of rural-urban migrants during this period boosted the selling of chang’aa to unprecedented levels. Demographic records and academic estimates vary greatly but it is safe to say that the population in Mathare rose from a few thousand during the colonial era to many tens of thousands between the 1960s and 1980s. The trend of rapid urbanisation, especially in informal settlements, that took off after independence in 1963 accelerated during the 1990s. Population growth in Mathare only declined slightly during the late 1990s and early 2000s, when even more ghetto areas rose up to absorb the bulk of rural-urban migrants.

After independence in 1963, alcohol production and distribution remained a home-based economy in Mathare, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the late 1980s and early 1990s that parts of Mathare (especially the following ‘villages’: Bondeni, Shantit and Mabatani) gradually became the epicenter of the largescale production and distribution in Nairobi of chang’aa.

A government decree banned chang’aa and busaa production in 1983 but the incoming MP of Mathare at the time allowed the continuation of home-based chang’aa production in return for electoral support (interview with Shosho Kingi, 3 November 2005). It was easier to distill chang’aa at home (and later at the river) without police detection than busaa, and the profit margins for chang’aa were also much higher. Soon, the Mathare river saw multiple cooking sites along its banks. Unfortunately, these profit margins have fallen significantly since the late 1990s, following a convergence of rising food prices (especially a type of molasses called ngutu) and increasing demands for police bribes since the 2000s. Still, the local alcohol economy sustains thousands of people in Mathare directly and is fundamental to most other economic activities located here. For example, shortage of firewood plagues adjacent neighborhoods, but not in Mathare. Every other small business on Mau Mau Avenue in Bondeni, one of the 13 ‘villages’ in Mathare sells large quantities of firewood. These firewood sellers have arrangements with construction companies for frequent early morning deliveries. Old wood from scaffolding at construction sites is transported to the area in large trucks. Every day, these trucks drop off mountains of firewood intended to fuel the widespread and constant distillation of alcohol at the sites near the river. At the same time, young men in search of work hang around these businesses from sunrise to midday to help offload the bulks of firewood and chop them into smaller pieces in return for a small stipend. Thousands more depend indirectly on the alcohol economy in Mathare. All this provides some insight into the abrupt devastation to the livelihoods of thousands and thousands of people caused by frequent crackdowns on the local alcohol economy by police.

The culture of policing in Mathare

After days without work and food, alcohol distillers took to Juja road on Tuesday morning, 2 April 2019, to protest the illegal and violent raid by police. A few media outlets, such as Ghetto Radio, squarely blamed ‘angry youth’ for starting the fire. Nothing could be further from the truth. We have spoken to many eyewitnesses who saw police officers deliberately setting the houses and schools alight. The so-called ‘angry youth’ were alcohol distillers who had not earned a living for three days. These (mostly) men make at most 300 Ksh a day for 10 hours of backbreaking work, barely enough to provide for a family of four. Hence, these families do not have any savings to rely on when work is disrupted by state violence, and the illegal raid by police had left hundreds if not thousands of families hungry for days. This led several husbands, fathers and brothers to take to street and fight for their families, and they burned tires on the road to underscore their demand to work by blocking traffic. As has been witnessed by several people, during the ensuing fracas one officer carelessly threw one of the burning tires into a row of make-shift houses and carpentry workshops along Juja road, all constructed of highly flammable materials. Other eyewitnesses saw police officers who violently blocked people to try and stop the fire of reaching the labyrinth of homes, businesses and schools down the street leading into Mabatini, thus effectively encouraging the fire to destroy as many houses and other properties as possible. Crowds of people who had gathered with buckets of water were violently dispersed with teargas while trying to rescue their homes and belongings. Sadly, the teargas only further ignited the fire as residents watched their schools and homes burn to ashes.

Distraught, many slept outside on Tuesday night. The fire had also destroyed the electricity supply line and the ensuing blackout increased overall insecurity. One resident recounted to us: “For nights, gunshots have become our ringtone.” Another one added: “We live in war, but nobody cares.” While living through this terror for four days and nights, Mathare residents watched the news at night that either ignored their plight and the criminal acts by police or put the blame decidedly on them. On top of the above mentioned pejorative ‘angry youth’ frame, Mathare residents were sweepingly cast as criminals and the local alcohol economy was without fail depicted as illicit and dangerous. Indeed, a lot of misconceptions about Mathare and local industries persist. For example, chang’aa is not an ‘illicit brew’ after being legalized in September 2010. The current modes of chang’aa production in Mathare may occur without a license and may not adhere to regulations, but that does not warrant such a violent and criminal crackdown by police. If the production is not up to standard, why not encourage bosses, distillers and sellers to obtain licenses and invest in improved manufacturing? The answer is simple: too many people high-up in police and government ‘eat’ from the industry as it is. Everyone living and working in Mathare is familiar with the daily routine of police visiting the distilling sites and bars where alcohol is produced and sold to collect bribes. A resident explained to us:

“Police eat a lot. For each drum on a fire at a jiko you pay 200 [Ksh] to 4 squads, so that is 800 [Ksh] for 12 hours. Before the raid there were uhm… like 7 jiko’s, so they operate 24/7. And on average there are 7 drums on the fires, at each jiko. At night it becomes more. For one day and night, together, these bribes can easily be something like 100k, for a month that is like, [calculates on mobile phone], wow, that is 3 million [KES]. Just for police. Wah!”

A lot of misconceptions about Mathare and local industries persist. For example, chang’aa is not an ‘illicit brew’ after being legalized in September 2010. The current modes of chang’aa production in Mathare may occur without a license and may not adhere to regulations, but that does not warrant such a violent and criminal crackdown by police.

This total is of course a conservative estimate because it does not include the bribes police take from bars and alcohol distributors, and it does not include police officers who produce their own alcohol. Most of all, the number of drums along the riverside vary immensely. Sometimes, a jiko can have 15 or 20 fires operating at once, while at other times only 3 or 4. The above calculations only serve to give an indication of police involvement and investment in the alcohol industry in Mathare. Considering this, why then does the police initiate a raid to clamp down on the very industry that ‘feeds’ them?

A first part of the answer pertains to internal divisions within police. Police are not a homogenous entity, and rumors have it that Rashid and his team were eventually stopped by other police officers in the course of the week because they saw their avenues to ‘easy money’ destroyed. That, at least to some measure, explains why on Thursday the raid was abruptly halted. What’s more, crackdowns on the alcohol economy are not uncommon, despite the entanglement of police in this business. In July 2015, Mathare residents lived through a similar period of police terror which left two people dead and thousands people without work for weeks. Many believe that such attacks are often triggered by a desire of particular police units or individual officers to show, as one resident put it to us, “the ‘higher ups’ that they are doing their ‘job’ and/or deserve promotion”. This time too, many residents believe ‘killer cop’ Rashid went out to show the incoming Inspector General Mutyambai that he earned an upgrade of some kind. A resident shared with us that in his view Rashid demonstrated his exceptional cruelty during the course of the raid by forcing a customer of a local bar to drink bleach while he compared bleach to chang’aa. The young punter barely survived this ordeal.

The police officer mentioned here is not the only one. Similar notorious policemen who are known to execute and torture mainly young and poor men frequently patrol most urban settlements in Nairobi. According to several of our fellow activists, these plain cloth police officers, called ‘killer cops’ or maspiff by some, are not part of regular police units that are locally known to be connected to specific police stations and which patrol Mathare and surrounding neighborhoods on a daily basis. They told us that these police officers operate under the direct command of the County Criminal Investigations Officer (CCIO). Several (non-state) security groups in Mathare that work together with these police officers revealed to us that several of them also enjoy substantial support by influential business owners, for instance in Eastleigh. The exact operational and support structures of these ‘killer cops’ and how they collaborate with regular police units remain somewhat opaque to local activists and residents, but all agreed that these plain cloth police officers enjoy considerable power and are able to kill with impunity through their powerful back-up.

When considering the relative opacity of their operations, the public visibility of these police officers in Mathare (and other urban settlements) is indeed rather astounding. They are also not a recent phenomenon. Most Mathare residents above 25 years old can easily recall the cruel reign of different ‘killer cops’ as far back as the late 1990s, such as the ruthless Habel Mwareria a.k.a. ‘Tyson’ in early 2000s who was also popularly dubbed ‘the Ghost’ because he often seemed to materialize out of thin air when- and wherever problems occurred. He killed suspects without asking questions, in front of people and in broad daylight and would vanish as rapidly as he had appeared. He was later promoted to the ATPU (Anti-Terror Police Unit).

Nevertheless, the ‘killer cop’ gained new strength in popular discourse when in April and May 2017 alleged police officers calling themselves ‘Hessy’ became rapidly infamous by posting pictures on different Facebook pages, carrying this name, of suspected ‘thugs’ before and after they purportedly shot them. Speculations continue to the date of writing this article about who or what ‘Hessy’ really is. Some people claim it started with an actual police officer who was shot in the leg and while he was recovering home in the month of April 2017 he started this network of ‘Hessy’s’ on Facebook. This is substantiated to some extent by the fact that there is an infamous police officer who is nicknamed Hessy and who is known to kill mostly young male crime suspects in Kayole. Others say that one officer or a group of police officers from different police stations in Eastlands chose this name because of the reputation of this particular police officer. Again, others state that the different ‘Hessy’ and adjacent pages on Facebook are not created by one or more police officers, but by a team of bloggers that works together with specific ‘killer cops’. The ‘Hessy’ and adjacent pages (such as Nairobi Crime Free and Dandora Crime Free) soon gained a massive following online and continue to be a topic of intense debate offline, for instance among residents in Mathare.

Local dynamics and the future of chang’aa

Police violence in Mathare, such as extra-judicial killings and illegal raids on people’s livelihoods, are enabled by a combination of factors. In contrast to the knee-jerk homogenization and criminalization of ghetto residents, for instance in mainstream media in Kenya, people inside Mathare are equally divided about the use of (criminal) violence by police as Kenyans are elsewhere. Police use such local divisions inside this neighborhood to push their own agenda. For instance, they work together with residents, popularly dubbed informers or watihaji, who are paid by police for information on people, business activities and other developments locally. This explains how police were able to find the entrance to the jiko’s at the river or the places where bars are located.

However, the incentives of informers to tell on their neighbours often go beyond merely monetary motivations or concerns about crime. Local competition or revenge play a big role as well. Police also depend too much on such secondary and often faulty intel because the local turnover of police, following frequent transfers, is quite high thus limiting the time police have to understand local dynamics. As a result, local informer-networks have some power to manipulate police behavior towards their own agendas. To illustrate, sometimes ‘killer cops’ like Rashid parade a suspect throughout Mathare and when they receive calls from as little as three informers confirming the identity of the suspect, the suspect is taken to a backstreet and executed (see also Van Stapele 2016). Our fellow activists have documented several cases that follow this pattern (see also MSJC 2017).

Police violence in Mathare, such as extra-judicial killings and illegal raids on people’s livelihoods, are enabled by a combination of factors. In contrast to the knee-jerk homogenization and criminalization of ghetto residents, for instance in mainstream media in Kenya, people inside Mathare are equally divided about the use of (criminal) violence by police as Kenyans are elsewhere.

The recent raid in Mathare on the local alcohol economy stopped as suddenly as it had started and without any outcome other than destroyed livelihoods, schools and homes and injured people. Slowly, alcohol distillers went back to work on Friday 5 April and gradually the local economy picked up again. Such crackdowns have never stopped the local alcohol industry and never will. If the government wants to make the local alcohol industry more safe and bring it in line with regulations, why not work together with business owners and their employees to develop ways to make this affordable to them? If alcohol consumption is the problem, why not invest in rehabilitation programs and explore underlying factors that contribute to widespread cheap alcohol consumption, such as vast unemployment and extreme stress? If the government wants people to stop working in this industry all together why not develop alternatives together with them? Crackdowns slow production for a little while but do not alter the make-up of this industry in any way, yet the Mathare residents who have for generations depended on this economy bear the brunt given that they can’t miss a day of work. On Thursday 4 April 2019, one resident asked us: “Who is Rashid? How can he do all this, kill our young men for years, then come to destroy our work, huh? Who is he?” Another one said: “Why are there no people coming from Red Cross, or our government leaders, like when Dusit happens or Westgate? Are we not human beings?”

An interesting shift has taken place since the raid. In the weeks following the raid, resentment against police culminated in two clashes between police and distillers because they refused to pay bribes to police. Several meetings between police and Mathare’s ‘Big Fish’, i.e. wealthy and influential bar owners and distributors, have tried to re-establish the collection of police bribes, but the ‘Small Fish’, small-time bar owners, have sided with the distillers in rejecting police presence at the jiko’s. One small-time bar owner explained: “We pay these bribes to cook chang’aa, but this raid put us back so much. We have not recovered so why pay bribes to police? We refuse, and we [the ‘small fish’ and the distillers combined] are the majority, we have strength in number.” However, his face turned sullen when he said: “But the police cannot ignore their money for long, we expect them to come in and attack us any day to claim their bribes again. In the end they have the guns.”

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Liberty for Whom? D-Day’s African Ghosts

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

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Three-quarters of a century ago, hundreds of thousands of Allied troops stormed the beaches of Normandy in what was the start of a war to save Western Europe from Nazi occupation. American and European leaders gathered at the scene last week to memorialise and honour those who fell, including on the German side. The US President, Donald Trump, began his tribute to them thus: “On this day 75 years ago, 10,000 men shed their blood and thousands sacrificed their lives for their brothers, for their countries, and for the survival of liberty.”

Undoubtedly, much of that is true. From the perspective of those in occupied Europe, it was the beginning of their liberation and the defeat of fascist tyranny. It would inaugurate, for many, an era of democratic freedom and economic prosperity that was at the time unparalleled in history.

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

President Trump went on to state that “the GIs who boarded the landing craft that morning knew that they carried on their shoulders not just the pack of a soldier but the fate of the world.” This may be true, but the world is not just Western Europe; from the perspective of those on the African continent, the GIs were not there to shore up liberty and democracy, but rather to free countries that were themselves engaged in colonial plunder and occupation.

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

But there was little that was “good” about what these same countries were doing and would continue to do to the people in Africa whose land and resources they were continuing to steal and whose people they not only oppressed but also press-ganged into their wars. More than a million Africans fought in World War II – hundreds of thousands of them were sent to the front in Europe, others to India, Burma and the Pacific islands. Few understood why they were fighting, let alone why they volunteered to do it. Many died and survivors today receive nothing of the recognition and adulation bestowed on their European and American counterparts.

Now it is probably true that a world governed by the Nazis would have been much worse for Africans than the present one, so in that sense their defeat was good for the continent. But in that case, it could also be argued that the two World Wars, which exhausted the European powers and shattered the myth of white invincibility for the returning African veterans, were also good in that they paved the way for the end of colonialism. In either case, the uncontested fact would be that these were not wars to free all people but rather to determine who would be their overlords – despite the rhetoric, they were fought less for global liberation than for global domination.

David Frum, in his brilliant piece for The Atlantic, “The Ghosts of D-Day”, notes how the memory of D-Day and the liberation of Europe have been distorted in French and American imaginations. In truth, it is not just American memories that have “become more triumphalist and self-aggrandizing”. The memorials at Normandy are not so much about remembering history but rather spinning it. And within that spin, the tale of the Africans has no place – it muddies the moral waters to admit that the liberation the Allies sought did not include that of the black and brown peoples they were oppressing; that those on this continent had, and to a large extent still have, little share in the freedom that was heralded on that day.

However, what is today undeniable is that the Allies were guilty of committing, and would go on to commit, many of the same crimes that qualified the Nazis as evil – from implementing a racist occupation, to genocides, to interring entire communities in concentration camps, to jailing homosexuals, to looting cultural artefacts and art.

For Africans, the irony is that the tools for making concrete the memory of what the European nations were actually doing – the records and documents that tell the story of the occupation and the crimes that were committed against Africans – are, for the most part, either deliberately destroyed or safely hidden away in European vaults. Many were stolen at the end of the colonial occupation in an effort to maintain the fiction of its benevolence.

However, what is today undeniable is that the Allies were guilty of committing, and would go on to commit, many of the same crimes that qualified the Nazis as evil – from implementing a racist occupation, to genocides, to interring entire communities in concentration camps, to jailing homosexuals, to looting cultural artefacts and art. Yet, unlike the Germans, who have owned up to “the unforgettable rupture of civilization that [they] provoked in Europe” and to the fact that “the fallen German soldiers are resting in foreign soil not because they came as liberators to this country but as occupiers”, there has been no such admission from the Europeans with regard to their occupation of Africa. Today, they still repeat the lie that colonialism was about bringing civilization and the benefits of modernity to the primitive peoples of the continent rather than implementing a system of extraction that continues to bleed the continent to this very day.

In 2017, Bruce Gilley, a professor of political science at Portland State University, published the article, “The Case for Colonialism” (withdrawn after a public uproar and death threats), in which he argued that Western colonialism was both “objectively beneficial and subjectively legitimate”. He further advocated for “colonial modes of governance; by recolonizing some areas; and by creating new Western colonies from scratch”. While much of this has been debunked, he is hardly the only one to go public with such views. In the same year, the former leader of South Africa’s Democratic Alliance, Helen Zille, was removed from her leadership roles after she put out a series of tweets touting the benefits of colonialism.

Rather than the selective and hagiographic portrayals we are treated to today, a better memorial for D-Day would be to return the colonial archives and to acknowledge the truth – the whole, unvarnished truth – about what was being defended on that day. For it surely was not the ideal of liberty for all. Importantly, this would include an acknowledgement and compensation for the Africans who were forced to fight and die in the wars that were not of their making.

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Another False Messiah: The Rise and Rise of Fin-tech in Africa

The rise of a global technology industry to support financial services, known as fin-tech, has grown enormously in Africa in the last decade. Across the continent, many commentators have proclaimed fin-tech as the solution to poverty and development. Examining the case of Kenya’s celebrated fin-tech model, M-Pesa, Milford Bateman, Maren Duvendack and Nicholas Loubere reveal a flawed system that is not an answer to poverty, despite the wild claims of some academic commentators. Quite the contrary, fin-tech offers Africa a further case study of how contemporary capitalism continues to under-develop Africa.

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In both the global investment community and the international development community one of the most talked-about issues today is fin-tech (financial technology). Defined as ‘computer programs and other technology used to support or enable banking and financial services’, the last decade or so has seen the rise of a new global fin-tech industry, a development that is widely regarded to be positively changing the world in a variety of ways. Thanks to almost daily reports of major new investments, especially in Africa, many investment professionals are of the opinion that something akin to a new ‘gold rush’ is clearly underway. At the same time, the fin-tech model is also touted as an innovation that will greatly benefit the global poor, with enthusiastic supporters claiming that a new golden age of ‘inclusive capitalism’ is upon us.

By far the most well-known example of the fin-tech model to date is Kenya’s M-Pesa – the agent-assisted, mobile-phone-based, person-to-person payment and money transfer system. M-Pesa is widely seen as the first fin-tech institution to conclusively demonstrate that it is possible to make a profit while also very meaningfully improving the lives of the poor. Taking inspiration from M-Pesa, many in the international development community now regard the fin-tech model as a potentially game-changing private sector-funded driver of development and poverty reduction in the Global South.

In both the global investment community and the international development community one of the most talked-about issues today is fin-tech (financial technology)

In the academic community the apparent combination of poverty reduction with profit generation proved to be a very seductive pro-capitalist narrative that many mainstream economists were only too willing to engage with. The most well-known academic economists examining the impact of M-Pesa are Tavneet Suri, based at MIT, and William Jack, based at Georgetown University. With extensive funding from Financial Sector Deepening (FSD) Kenya and the Gates Foundation, since 2010 Suri and Jack have produced a series of outputs extolling the benefits of M-Pesa. Suri and Jack’s generally positive findings have resulted in mainstream media attention and large numbers of citations. This has played an important part in galvanising the international development community into supporting the fin-tech model as a development and poverty reduction intervention.

In particular, their 2016 article published in the prestigious journal Science, entitled ‘The Long-run Poverty and Gender Impacts of Mobile Money’ has played a considerable role in sparking the imagination of the international development community. This is mainly because of its sensational claim that ‘access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty.’ According to this article, M-Pesa was not just making profits, but the evidence seemed to show it was also making an astonishing ‘bottom-up’ development and poverty reduction contribution. This poverty reduction claim, often cited in full in media articles, quickly became the centrepiece of the evidence used by many in the international development community to justify its increasingly strong support for, and investment in, the fin-tech model.

M-Pesa is widely seen as the first fin-tech institution to conclusively demonstrate that it is possible to make a profit while also very meaningfully improving the lives of the poor.

Unfortunately, all that glitters is not gold. As we write in a Briefing just published in the ROAPE Suri and Jack’s hugely influential signature article actually contains a surprising number of errors, omissions, poor logic, and methodological flaws. Crucial labour market evaluation parameters, such as business failure (exit) and the impact of new businesses on existing ones (displacement), were entirely over-looked. The core issue of individual over-indebtedness, which in Kenya is now approaching crisis levels and which has a clear and direct link to the operation of M-Pesa, was not even mentioned as a possible downside of the fin-tech development model. For such an important and well-financed project, the methodology was also weak, diverging from many of the standard ‘best practices’ in the impact evaluation field. The important issue of causation was also raised, but in a way that we found to be questionable at best. In many ways, therefore, Suri and Jack’s analysis appears to misrepresent and vastly over-state the development impact of M-Pesa. 

Fin-tech represents a new form of resource extractivism

One of the most disturbing aspects of Suri and Jack’s flawed analysis, however, is that they completely bypass the crucial equity and distributional issues that arise from the operation of M-Pesa and other similar fin-tech corporations. This is inexcusable because there are clear warning signs today that the fin-tech model possesses the potential to extract immense value from the poorest communities in the Global South, with potentially calamitous long-term consequences. Like the gambling, sub-prime mortgage and payday loan industries in the United States and UK that before and after the financial crisis of 2008 were able to grow rich by expertly extracting massive amounts of value from the communities of the poor, one might argue that Kenya’s poorest communities are also being drained of much of their needed collective wealth.

M-Pesa has essentially perfected a form of ‘digital mining’ that captures and extracts a small tribute from each and every one of the growing number of tiny financial transactions made by the poor through the platform (which has become ubiquitous and very difficult to avoid). This includes microloans, money transfers, grant disbursement, credit card usage, pension payments, and so on. One simply cannot escape from the fin-tech ‘net’ that is gradually being lowered on to the poor. As more and more governments and elites are brought in as allies by the fin-tech industry, this value extraction process is only likely to speed up and intensify, with cash transactions being increasingly jettisoned and ever more transactions being mediated by fin-tech organisations.

M-Pesa has essentially perfected a form of ‘digital mining’ that captures and extracts a small tribute from each and every one of the growing number of tiny financial transactions made by the poor through the platform

By the same token, given the profit motive at play, it is inevitable that a range of services and products will end up being pushed on to the poor even though they largely do not need them, are not able to productively use them, or do not have any means to repay debt associated with them. The value realised through such ‘digital mining’ techniques is then extracted from the local community and deposited into the hands of the fin-tech entity’s owner(s). However, with so many fin-tech entities backed by foreign capital from the Global North, the chances are that a large proportion of this ‘digitally mined’ value will head abroad to the world’s leading investment locations.

What we have here, therefore, is a value extraction process that contains the potential to progressively undermine the development process in local communities in the Global South. It does this in two important ways: first, it denies the local community an extremely valuable aggregate amount of local spending power, which is instead appropriated by wealthy individuals and institutions, many of which are located abroad. This renders an important endogenous growth trajectory inactive, since it is rising local demand that often provides the initial impetus for local enterprises to emerge in order to meet this demand. Second, fin-tech institutions also starve the local (re)investment cycle by siphoning value out of the community, and thus make it more difficult for local businesses to access the meaningful amounts of capital needed to establish sustainable commercial operations. Experiences in Asia with local banking from 1945 onwards, for example, show that reinvesting/recycling the bulk of locally-generated value back into the local economy has significant potential to kick-start economic growth.

Fin-tech could, therefore, be seen as a revised version of the natural resource extraction paradigm that was largely responsible for under-developing Africa and other colonised countries over the last four centuries. The ‘resource’ increasingly being extracted from Africa today might no longer be a physical one – such as diamonds, gold, platinum, or silver -and the process might not require slavery, the employment of ultra-exploitative waged labour, or involve horrendous working conditions, but the eventual negative outcomes of ‘digital mining’ could very well be the extension and continuation of under-development.

M-Pesa thus provides us with a valuable case study of how contemporary platform capitalism operates in neoliberal Africa and how ‘digital mining’ might actually affect Kenya’s potential growth and development. In recent years, Safaricom (M-Pesa’s parent company) has become far and away Kenya’s largest company, now accounting for a massive 40% of the total stock market valuation on the Nairobi securities exchange. Safaricom is also famous for its spectacular profits. In 2019 it set a record by registering profits of around US$620 million, which would be an impressive result in even the richest countries of the Global North. To put this into perspective, this figure is slightly more than the Kenyan government spends on the entire healthcare system in the country. However, along with an additional bonus paid out in 2019 to shareholders amounting to around US$240 million, a large percentage of this US$620 million in profit was paid out as dividends to foreign shareholders. The main beneficiary was the majority shareholder (at 40%) of Safaricom, the UK multinational corporation Vodafone. Other beneficiaries are a variety of mainly foreign investors located in ‘tax-efficient’ locations (the Caribbean mainly) and who hold a 25% stake. The Kenyan government also holds a further 35% stake in Safaricom.

Fin-tech could, therefore, be seen as a revised version of the natural resource extraction paradigm that was largely responsible for under-developing Africa and other colonised countries over the last four centuries.

This demonstrates that significant value is being created by M-Pesa based on the tiny transactions of the poor, but most of it is spirited abroad via dividend payments to foreign shareholders. This helps explain why M-Pesa has become a beacon for global investors and financial institutions all seeking their own spectacular fortunes in Africa while framing their thirst for profits as altruism. Indeed, by embedding the fin-tech model in Kenya, the international development community is complicit in the establishment of a high-tech extractivist infrastructure similar to colonial-era equivalents.

‘Digital mining’ in Kenya and the foreign appropriation of the wealth generated by those languishing at the bottom of the pyramid is a less directly brutal undertaking than the value extraction process carried out in colonial times.  However, the extractivist logic, the wealth transfer, and the determination to accumulate on the back of the poor have a similar character to colonial-era economic regimes, and similar potential to seriously damage socioeconomic development in the long-term.

Furthermore, as in colonial times, a local elite has been allowed significant freedom to manage this ‘digital mining’ on behalf of the foreign owners. As with Capitec Bank in South Africa, it is no secret that the CEO and senior management at Safaricom have been able to use the company as a vehicle through which to extract fantastic rewards for themselves, enjoying Wall Street-style levels of remuneration in recent years and with several becoming multi-millionaires as a result. However, this also provides the obvious incentive to grow Safaricom as fast as possible because in that way the personal rewards attributable to those at the top are maximised. As a result, Safaricom’s CEO and other senior management have pushed growth to the limits and are now encountering problems in several areas on account of reckless over-expansion, including with regard to the company’s wilful engagement with gambling. In addition, in the early stages of M-Pesa’s growth, certain still unidentified members of the local Kenyan elite were able to secure for themselves a sizeable shareholding in Safaricom, which they later sold off for massive capital gains. Pointedly, the impact on inequality in Kenya arising from these narrow elite enrichment mechanisms has been very significant.

Despite the benefit that some individuals in poverty undoubtedly enjoy as a result of M-Pesa’s services, universal financial inclusion has come at a very high longer-term price for Kenya’s poor overall.

In short, an effective value extraction process involving ‘digital mining’ has been established in Kenya, which has been misleadingly framed by many in the international development community as contributing to ‘bottom-up’ development. This process has ensured the stratospheric enrichment of a narrow group of foreign investors, Safaricom’s own senior managers, and a section of the Kenyan elite. However, this value has effectively been appropriated from M-Pesa’s overwhelmingly poor clients via their growing bundle of tiny fin-tech-mediated financial transactions.

Despite the benefit that some individuals in poverty undoubtedly enjoy as a result of M-Pesa’s services, universal financial inclusion has come at a very high longer-term price for Kenya’s poor overall. Safaricom appears to have become a classic example of the ‘cathedral in the desert’ syndrome – a vastly profitable entity that exists only by ignoring the impoverishment it is helping to create in its wake. As fin-tech spreads across Africa, it is likely we will see similar deleterious extractionist scenarios emerging.

Might we not then consider M-Pesa to be the canary in the coalmine?

Parallels with the failed microfinance revolution?

Our analysis of Suri and Jack’s hugely influential 2016 article shows that it simply does not stand up to scrutiny. One might conjecture that this has something to do with the fact that much of the funding for their work over the past decade has come from FSD Kenya and the Gates Foundation, two of the world’s leading advocates for the fin-tech model.

In this context, it is interesting to recall how the now largely discredited microfinance movement got a game-changing boost back in the 1990s thanks to a study by two high-profile World Bank economists – Mark Pitt and Shahidur Khandker – claiming that microfinance in Bangladesh was generating major poverty reduction benefits for women Pitt and Khandker’s work was much later shown to contain many serious errors and its conclusions were unsound. Nevertheless, Pitt and Khandker’s work more than served its immediate purpose, which was to galvanise support within and around the international development community for an intervention that the World Bank desperately wanted to see go forward on ideological grounds. We might therefore pose the obvious question here with regard to the misrepresentation of M-Pesa’s impact: are Suri and Jack the new Pitt and Khandker?

 

Editors Note: This article was first posted in the Review of African Political Economy (ROAPE)

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