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SMACK TRACKS IN THE SANDS OF TIME: How Kenya Became a Major Narcotics Transit Route

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Drug Haven
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Nairobi, Kenya – YOUR SHIP HAS SAILED INTO PORT

In September 2015, a ship called the Hoegh Transporter called at the port of Mombasa. Kenyan police promptly detained the Norwegian-flagged ship and arrested its Filipino crew. Investigators then started a systematic search for drugs in the vessel.[1]

A few weeks earlier, the 1999-built vehicle-carrier had left the port of Hitachi in Japan with a consignment of cars meant for the United Nations peacekeeping forces in the Democratic Republic of Congo.[2] It then called at ports in Korea, Dubai and Mumbai. At this last port, according to some of the original reports, the crew hid guns and drugs within its 3,983-vehicle cargo.

The UN claimed the consignment of undeclared guns, but no drugs were ever found. [3]The ship and crew were released after a week, ending hopes of what would have been the most important drug seizure in East African history. Its presence on such a prominent commercial ship would have helped explain how Kenya now fits into the global narco-trade.

In that same half of the year, the Australian Navy had seized two ships off the Kenyan Coast with 787kg of heroin. Another 342kg was found in the tank of a ship at the Mombasa port. No one seemed to know whether the increasing seizures around the East African Coast meant enforcement was working better, or drug cartels were moving more drugs, or both.

Among the most prominent emerging routes are through West and East Africa, sometimes called the ‘Smack Track’. West Africa’s proximity to Europe, and the presence of a cluster of unstable states, made it the first choice for Latin American smugglers seeking new routes

Originally, heroin made from Afghanistan poppy found its way to markets in Europe through Pakistan, Iran or Central Asia. Across the world, coca from Peru and neighbouring countries found its way to labs in Colombia, then moved into the United States through Mexico, Panama and Venezuela. [4]The idea behind these smuggling routes was cover, since shipments from narco-states would automatically attract more attention.

As each advancement in drug enforcement dented these established routes, the business evolved. Among the most prominent emerging routes are through West and East Africa, sometimes called the ‘Smack Track’. West Africa’s proximity to Europe, and the presence of a cluster of unstable states, made it the first choice for Latin American smugglers seeking new routes.

The investments they made in building this gateway to Europe were astounding. In 2009 for example, a Boeing 727 crash-landed after taking off from a makeshift runway in the Mali desert. Its drug cargo had already been emptied and the crew escaped before the smoking hull was found.[5]

LOOKING SOUTH: THE EAST AFRICAN ROUTE

Increased policing and competition meant smugglers began to look farther south, to the East African Coast. Since the early 1980s, East Africa had been used as a minor transit point for heroin.[6] Heroin smugglers had to innovate faster than their cocaine contemporaries because for a time American authorities didn’t think cocaine was as bad as heroin.

Kenyan and Tanzanian ports and airports became increasingly attractive to smugglers seeking a circuitous route to Europe and America. Data from the United Nations Office on Drugs and Crime shows that the biggest seizures of heroin in the 1980s were of 20kg in 1987 and 44.39kg in 1990. Both were moved through airways, but a much bigger operation was happening at the port.

The most notable of this generation of drug smugglers was Ibrahim Akasha. Using his transport network, he expanded the delivery of mostly heroin into Europe, particularly through Amsterdam. Among his drug connects in Amsterdam were Yugoslav and Dutch cartels involved in distribution. [7]

In Pakistan, he had a network proven heroin supplier, and completed the network with a system of bribery and intimidation in Mombasa. His European partners handled their home ports, and the only task then was making each shipment count. One of the most colourful episodes in his underworld infamy was an unproven the story that he had once smuggled a single shipment of five tonnes of drugs into Europe.

By the time he was shot on a Dutch street in 2001, Akasha was at the top of the food chain. He had a Yugoslav man shackled in one of his houses in Kenya for not paying him, and his death triggered a war of attrition in the narcotics world. It also ended what could easily have been Kenya’s first drug cartel.

Three years later, in 2004, drug enforcement agencies staged a coordinated raid on a warehouse in Nairobi and a home in Malindi. Several hundred kilogrammes of cocaine had been nabbed in Amsterdam in containers originating from Kenya, triggering a chain of events that ended with the seizure of 1.1 tonnes of cocaine.[8] Only one person, David Mugo, was ever jailed in Kenya. His brother, George Kiragu, in whose name most of the paperwork appeared, was jailed in Amsterdam. They were the faces of the operation,[9] but it’s most likely the huge consignment had more than one owner.

ENTER THE FAMILY

The presence of the larger portion of the shipment in Malindi, in a house leased from an Italian couple, suggested that the Italian community in the Coastal city were involved in the trade. It had long been suspected that the Italian Mafia expanded to the Kenyan Coast, using it mainly for money laundering and hiding wanted criminals, but also to ship drugs. The Italian couple were acquitted, but the suspicion of Mafia involvement in Kenya’s drug trade lingers.

The Mafia would have been crucial in accessing European markets. The size of the shipment meant that this was not a virgin route. Since the late 1980s, increased American enforcement had complicated that traditional market, forcing even South American markets to seek new markets in Europe. To get access to these, they piggybacked on established heroin routes. Since this was technically a new and rather long route, they could move massive amounts of narcotics undetected. Initial intelligence about the drugs from European enforcement agencies suggested a multi-tonne shipment, and it is likely most of it was moved and hidden before the raid.[10]

Less than two years later, two men claiming to be Armenians entered Kenya. The Armenians brought in a team of six Eastern Europeans, and hired two Tanzanians as bodyguards. They quickly began moving in the highest circles of Kenyan society. All 10 would be deported without trial, and their true mission remained a matter of conjecture. Their official cover had been that they had been hired to train an anti-narcotics team, but US diplomatic cables from as early as March 2006, later leaked by Wikileaks, show they were known enforcers for the Russian Mafia. This brought in a whole new angle to just how many interests were involved in the 1.1 tonne cocaine haul.

By the time he was shot on a Dutch street in 2001, Akasha was at the top of the food chain. His death triggered a war of attrition in the narcotics world. It also ended what could easily have been Kenya’s first drug cartel

To observers of the narcotics trade, the possible involvement of the Russian and Italian Mafias meant the East African supply line was more important than previously thought. Still, the connection with South American cartels remains mostly obscure, perhaps because of the existence of several lines of criminal control between Kenyan dealers and Colombian ones. What’s most revealing about the narcotics business is the mainstay of Kenya’s smugglers, heroin.

One of the men arrested with the Akasha sons in 2014, Gulam ‘the Old Man’ Hussein, is said to be a heroin smuggling genius.[11] The other, Vijay Goswami, had served a long jail sentence for drug possession in Dubai, and is wanted in his home country, India, for suspected drug links. His criminal profile shows extensive tentacles in the drug supply world, making Goswami the guy who knows everyone, and Gulam the one who organised transportation.[12] Gulam has quite a profile, which included an 800kg haul of heroin seized off the Coast of Kenya in July 2014 and poured into the sea.

For the deal that got them nabbed, they had moved 98kg of heroin as a sample to their new Moroccan connection to test and ship to the United States. While they couldn’t satisfy the meth part of the deal, their heroin delivery suggests they could have moved a lot more.

What’s more interesting with this case is that the sale, not just the transit, was happening in Kenya. The Akashas had sourced the heroin from a Pakistani cartel led by a man simply known as ‘The Sultan,’ smuggled it into Kenya, and then sold it to a Moroccan man to smuggle into the United States. These were two different main nodes meeting, and perhaps one of the most visible instances of how the drug underworld in Kenya works. Most of this business was done in Nairobi and not Mombasa, which had long been thought to be the epicentre of the narcotics trade in Kenya.

LINES OF CRIMINAL CONTROL

In the 1990s, Kenya’s growth as a drug route attracted many new players. It’s impossible to control the entire supply chain, so they drew up lines of criminal control and outsourced key functions. They operated as a competitive network, with different nodes that one report titled Termites at Work: Transnational Organised Crime and State Erosion in Kenya called kampuni.

The report, published in A report from September 2011, Termites at Work: Transnational Organised Crime and State Erosion in Kenya, estimated that ‘there were at least 10 major international drug trafficking networks’ in Kenya.

Each snuggles into a part of the supply chain it can profitably control, and then makes its own contacts with others inside and outside the country. They have the same basic structure of a small company complete with accountants, packers, and peddlers. They tend to involve people with familial connections, as ties of blood or marriage are one way the narcotics business ensures loyalty.

Since most of the drugs shipped through Kenya are in transit, their purity is often over 80 per cent. Some of it is diluted and repackaged either for shipment, but most of it is simply repackaged. There’s evidence now that some dealers are smuggling in low purity narcotics for distribution and sale locally.

Some nodes play one role only, such as providing the repackaging service to other smugglers. Others, such as Naima Nyakinywa or ‘Mama Leila,’ provide supplies for the smuggling and repackaging units, as middlemen to middlemen. Mama Leila was named by the US Treasury as a key player in Kenya’s drug underworld only a few months before she was arrested in Dar es Salaam.[13] Vijay Goswami, the Indian man arrested with the Akashas, has been linked to several hauls in India of mostly precursor ingredients to processing other drugs. One of his plans was to start and run a mega methamphetamine laboratory in Kenya similar to one that was closed around the same time in Nigeria.[14]

Some nodes focus solely on smuggling, recruiting mules and sending them on delivery missions across the world. Compared with the massive shipments via the port, at one point estimated to have been at least one per week, the mules move minute amounts. It’s likely that they are hired by nodes at the periphery, who are paid for their work in narcotics that they dilute and repackage for sale.

In 2002, a Kenya Airways cabin crew member called Priscillah Kolongei was arrested carrying 27kg of heroin from Mumbai to Nairobi. She had been smuggling drugs since 1997, and her arrest was followed by a purge within the airline of suspected mules. Between 2004 and 2010, narcotics smugglers started hiring mules outside the usual groups of cabin crew. They focused on young unemployed women, white expatriates, and non-white holders of valid US visas. China currently has over 70 Kenyans in jail on drug smuggling charges. A Kenyan socialite was arrested and jailed in Kumasi, Ghana and another, Margaret Njeri, ended up in a Brazilian jail where she died in 2009.

It’s also possible that the much larger shipments by air, into and out of Kenya, are not caught because smugglers have reduced reliance on commercial flights. A similar thing happened at the port, where smugglers would offload on the high seas and head out on small motorboats to remote islands near Lamu and Pemba, away from centralised policing. To do this, smugglers avoided international airports they didn’t have connections or those like the Jomo Kenyatta International Airport that had enhanced anti-narcotics enforcement.

For this entire network to survive, it needs protection. The most common form in Kenya is political protection, although a few politicians have been named as being involved in the drug trade itself. The oldest name on the list is John Harun Mwau, an uber-rich politician and businessman who has been investigated by Kenyan and American governments. Other politicians and public figures who have been suspected of involvement in narcotics include Mombasa Governor Hassan Joho and his publicity-shy brother Abubakar Joho, as well as current Kiambu Governor William Kabogo and current Nairobi Senator Mike Sonko his brothers, although the suspicions have never been proven. One of their similarities, other than vast amounts unclear sources of wealth, is that they have been associated with owned or operated transport or as well as clearing and forwarding companies.

To observers of the narcotics trade, the possible involvement of the Russian and Italian Mafias meant the East African supply line was more important than previously thought. Still, the connection with South American cartels remains mostly obscure

Outside of the possible direct involvement of politicians, political and police connections normally have auxiliary protection roles. The entry of the Armenian brothers in 2006 was facilitated by among others Mary Wambui, the president’s second wife, and her daughter. In the years after the story died, Wambui confessed under oath to having known the Armenians, but didn’t explain why they had come to Kenya. The role of politicians and law enforcers in the Armenian mission seems to have been peripheral, with serious undercurrents that made the two men untouchable.

THE LOS PEPES EASTER EGG?

The loose nature of the narcotics economy in the region makes it hard to dissect direct connections. But at times they seem almost brazen. After the December 2004 cocaine haul, investigators raided a warehouse owned by Pepe Enterprises Ltd, a company associated with owned by John Harun Mwau. The name of the company is interesting, in a macabre sense. It triggers memories of Los Pepes, a group of vigilantes who dedicated their lives to hunting down Colombian drug lord extraordinaire Pablo Escobar in the early 1990s. The name itself came from the phrase “Perseguidos por Pablo Escobar” (persecuted by Pablo Escobar). Officially, more than once, Mwau has been named as a key connection between Kenya and the South American narcotic trade, from as early as the days of Escobar’s Medellin Cartel.

Although Los Pepes was officially a civilian vigilante group, it was funded by the Cali Cartel, which had broken away from Escobar’s Medellin group in the late 1980s. In the years after Escobar died, the Cali Cartel thrived, controlling over 90 per cent of the global cocaine market. As they expanded into Europe, they made business relationships with the heroin smuggling world, and shared distribution centres.

By the mid-1990s, the Cali Cartel controlled 90 per cent of Europe’s cocaine market too, meaning they pioneered and probably expanded the Smack Track cocaine route through Kenya, Tanzania and West Africa. If there was any South American cartel with the ability to smuggle massive amounts of cocaine into Kenya in the early 2000s, it was the Cali Cartel.

 

[1] http://www.hoeghautoliners.com/news-and-media/news-and-press-releases/h%C3%B6egh-transporter-in-mombasa-kenya-update-23-september

[2] http://www.hoeghautoliners.com/news-and-media/news-and-press-releases/undeclared-weapons-in-un-shipment-cause-of-detention-of-h%C3%B6egh-transporter

[3] ibid

[4] http://www.economist.com/news/middle-east-and-africa/21639560-east-african-states-are-being-undermined-heroin-smuggling-smack-track

[6] https://data.unodc.org/#state:

[7] https://www.standardmedia.co.ke/article/2000100784/akasha-death-opened-a-peek-into-kenyan-drug-dealings

[8] https://www.unodc.org/cld/case-law-doc/drugcrimetype/ken/criminal_case_no_1365_of_2004.html

[9] Ibid

[10] https://www.unodc.org/cld/case-law-doc/drugcrimetype/ken/criminal_case_no_1365_of_2004.html

[11] https://wikileaks.org/plusd/cables/06NAIROBI2782_a.html

[12] https://www.justice.gov/usao-sdny/press-release/file/933901/download

[13] http://www.thecitizen.co.tz/News/national/High-profile-drug-trial-to-start-afresh/1840392-2418504-w3h73rz/index.html

[14] https://www.justice.gov/usao-sdny/press-release/file/933901/download

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Politics

Moving, or Changing?

The purpose of the mass and civilizational migrations of Western Europe was the same as now: not simply to move from one point to another, but also from one type of social status to another, to change one’s social standing in relation to the country of origin.

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Moving, or Changing?
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Do we move to change, or do we move to stay the same?

That seems to depend on who we were, to begin with. In most cases, it seems we move in an attempt to become even more of whatever we think we are.

A good Kenyan friend of mine once (deliberately) caused great offense in a Nairobi nightspot encounter with a group of Ugandans he came across seated at a table. There were six or seven of them, all clearly not just from the same country, but from the same part of the country.

“It always amazes me,” he said looking over their Western Uganda features, “how people will travel separately for thousands of miles only to meet up so as to recreate their villages.

He moved along quickly.

“Most African Migration Remains Intraregional” is a headline on the Africa Centre for Strategic Studies website:

Most African migration remains on the continent, continuing a long-established pattern. Around 21 million documented Africans live in another African country, a figure that is likely an undercount given that many African countries do not track migration. Urban areas in Nigeria, South Africa, and Egypt are the main destinations for this inter-African migration, reflecting the relative economic dynamism of these locales.

Among African migrants who have moved off the continent, some 11 million live in Europe, almost 5 million in the Middle East, and more than 3 million in America.

More Africans may be on the move now than at any time since the end of enslavement, or perhaps the two large European wars. Even within the African continent itself. They navigate hostilities in the cause of movement—war, poverty and environmental collapse.

The last 500 years have seen the greatest expression of the idea of migration for the purpose of staying the same (or shall we say, becoming even more of what one is). The world has been transformed by the movement of European peoples, who have left a very visible cultural-linguistic stamp on virtually all corners of the earth. It is rarely properly understood as a form of migration.

It took place in three forms. The first was a search for riches by late feudal Western European states, in a bid to solve their huge public debts, and also enrich the nobility. This was the era of state-sponsored piracy and wars of aggression for plunder against indigenous peoples. The second form was the migration of indentured Europeans to newly conquered colonial spaces. The third was the arrival of refugees fleeing persecution borne of feudal and industrial poverty, which often took religious overtones.

Certainly, new spaces often create new opportunities, but only if the migrants concerned are allowed to explore the fullness of their humanity and creativity. The historical record shows that some humans have done this at the expense of other humans.

A key story of the world today seems to be the story of how those that gained from the mass and civilizational migrations of Western Europe outwards remain determined to keep the world organised in a way that enables them to hold on to those gains at the expense of the places to which they have migrated.

We can understand the invention and development of the modern passport—or at least its modern application—as an earlier expression of that. Originally, passports were akin to visas, issued by authorities at a traveler’s intended destination as permission to move through the territory. However, as described by Giulia Pines in National Geographic, established in 1920 by the League of Nations, “a Western-centric organization trying to get a handle on a post-war world”, the current passport regime “was almost destined to be an object of freedom for the advantaged, and a burden for others”. Today the dominant immigration models (certainly from Europe) seem based around the idea of a fortress designed to keep people out, while allowing those keeping the people out to go into other places at will, and with privilege, to take out what they want.

Certainly, new spaces often create new opportunities, but only if the migrants concerned are allowed to explore the fullness of their humanity and creativity.

For me, the greatest contemporary expression of “migration as continuity” has to be the Five Eyes partnership. This was an information-sharing project based on a series of satellites owned by the United States, the United Kingdom, Australia, New Zealand and Canada. Its original name was “Echelon”, and it has grown to function as a space-based listening system, spying on telecommunications on a global scale – basically, space-based phone tapping.

All the countries concerned are the direct products of the global migration and settlement of specifically ethnic English Europeans throughout the so-called New World, plus their country of origin. The method of their settlement are now well known: genocide and all that this implies. The Five Eyes project represents their banding together to protect the gains of their global ethnic settlement project.

In the United States, many families that have become prominent in public life have a history rooted, at least in part, in the stories of immigrants. The Kennedys, who produced first an Ambassador to the United Kingdom, and then through his sons and grandsons, a president, an attorney general, and a few senators, made their fortune as part of a gang of Irish immigrants to America involved in the smuggling of illicit alcohol in the period when the alcohol trade was illegal in the United States.

Recent United States president Donald Trump is descended from a German grandfather who, having arrived in 1880s America as a teenage barber, went on to make money as a land forger, casino operator and brothel keeper. Franklin Delano Roosevelt, the 32nd president of the United States was the paternal grandson of a trader named Warren, a descendant of Dutch settlers who made his fortune smuggling opium into China in the 1890s.

While it is true that the entire story of how Europeans came to be settled in all the Americas is technically a story of criminality, whether referred to as such or not, the essential point here is that many of the ancestors of these now prominent Americans would not have passed the very same visa application requirements that they impose on present-day applicants.

The purpose of migrations then was the same as it is now: not simply to move from one point to another, but also from one type of social status to another. It was about finding wealth, and through that, buying a respectability that had not been accessible in the country of origin. So, the point of migration was in a sense, not to migrate, but to change one’s social standing.

And once that new situation has been established, then all that is left is to build a defensive ring around that new status. So, previously criminal American families use the proceeds of their crime to build large mansions, and fill the rooms with antiques and heirlooms, and seek the respectability (not to mention business opportunities) of public office.

Many of the ancestors of these now prominent Americans would not have passed the very same visa application requirements that they put to present-day applicants.

European countries that became rich through the plunder of what they now call the “developing world”, build immigration measures designed to keep brown people out while allowing the money keep coming in. They build large cities, monuments and museums, and also rewrote their histories just as the formerly criminal families have done.

Thus the powers that created a world built on migration cannot be taken seriously when they complain about present-day migration.

Migration is as much about the “here” you started from, as it about the “there” you are headed to. It is not about assimilating difference; it is about trying to keep the “here” unchanged, and then to re-allocate ourselves a new place in that old sameness. This is why we go “there”.

This may explain the “old-new” names so common to the mass European migration experience. They carry the names of their origins, and impose them on the new places. Sometimes, they add the word “New” before the old name, and use migrant-settler phrases like “the old country”, “back east”. They then seek to choose a new place to occupy in the old world they seek to recreate, that they could not occupy in the old world itself. But as long as the native still exists, then the settler remains a migrant. And the settler state remains a migrant project.

To recreate the old world, while creating a new place for themselves in it, , such migrants also strive to make the spaces adapt to this new understanding of their presence that they now seek to make real.

I once witness a most ridiculous fight between three Ugandan immigrants in the UK. It took place on the landing of the social housing apartment of two of them, man and wife, against the third, until that moment, their intended house guest. As his contribution to their household, the guest had offered to bring a small refrigerator he owned. However, when the two men went to collect the fridge in a small hired van, the driver explained that traffic laws did not permit both to ride up front with him – one would have to ride in the back with the fridge. The fridge owner, knowing the route better, was nominated to sit up front, to which his friend took great and immediate exception; he certainly had not migrated to London to be consigned to the back of a van like a piece of cargo. After making his way home via public means, and discussing his humiliation with his good wife, the arrangement was called off – occasioning a bitter confrontation with the bewildered would-be guest.

There must have been so many understandings of the meaning of their migration to Britain, but like the Europeans of the New World, the Ugandans had settled on replicating the worst of what they were running from in an attempt to become what they were never going to be allowed to be back home.

A good case in point is the ethnic Irish communities in Boston and New York, whose new-found whiteness—having escaped desperate poverty, oppression and famine under British colonial rule on what were often referred to as “coffin ships” —saw them create some of the most racist and brutal police forces on the East Coast. They did not just migrate physically; they did so socially and economically as well.

It starts even with naming.

The word “migrant” seems to belong more to certain races than to others, although that also changes. When non-white, normally poor people are on the move, they can get labeled all sorts of things: refugees, economic migrants, immigrants, illegals, encroachments, wetbacks and the like.

With white-skinned people, the language was often different. Top of the linguistic league is the word “expatriate”, to refer to any number of European-origin people moving to, or through, or settling in, especially Africa.

According to news reports, some seven million Ukrainians fleeing the Russian invasion were absorbed by their neighboring European countries, most of which are members of the European Union. Another 8 million remain displaced within the war-torn country.

This is an outcome of which the Europeans are proud. They have even emphasized how the racial and cultural similarities between themselves and the Ukrainian refugees have made the process easier, if not a little obligatory.

This sparked off a storm of commentary in which comparisons were made with the troubles earlier sets of refugees (especially from the Middle East and Afghanistan) faced as the fled their own wars and tried to enter Western Europe.

And the greatest irony is that the worst treatment they received en-route was often in the countries of Eastern Europe.

Many European media houses were most explicit in expressing their shock that a war was taking place in Europe (they thought they were now beyond such things), and in supporting the position that the “white Christian” refugees from Ukraine should be welcomed with open arms, unlike the Afghans, Iraqis and Syrians before them.

Human migration was not always like this.

Pythagoras (570-495 BC), the scholar from Ancient Greece, is far less well remembered as a migrant and yet his development as a thinker is attributable to the 22 or so years he spent as a student and researcher in Ancient Egypt. The same applies to Plato, who spent13 years in Egypt.

There is not that much evidence to suggest that Pythagoras failed to explain where he got all his learning from. If anything, he seems to have been quite open in his own writing about his experiences, first as an apprentice and later a fellow scholar in the Egyptian knowledge systems. The racial make-up of Ancient Egypt, and its implications, was far from becoming the political battleground it is today.

Top of the linguistic league is the word “expatriate” to refer to any number of European-origin people moving to, or through, or settling in, especially Africa.

Classic migration was about fitting in. Colonial migration demands that the new space adapt to accommodate the migrant. The idea of migrants and modern migration needs to be looked at again from its proper wider 500-year perspective. People of European descent, with their record of having scattered and forcibly imposed themselves all over the world, should be the last people to express anxieties about immigrants and migration.

With climate change, pandemic cycles, and the economic collapse of the west in full swing, we should also focus on the future of migration. As was with the case for Europeans some two to three hundred years ago, life in Europe is becoming rapidly unlivable for the ordinary European. The combination of the health crisis, the energy crisis, the overall financial crisis and now a stubborn war, suggests that we may be on the threshold of a new wave of migration of poor Europeans, as they seek cheaper places to live.

The advantages to them are many. Large areas of the south of the planet are dominated physically, financially and culturally, by some level of Western values, certainly at a structural level. Just think how many countries in the world use the Greco-Latin origin word “police” to describe law enforcement. These southern spaces have already been sufficiently Westernized to enable a Westerner to live in them without too much of a cultural adjustment on their part. The Westerners are coming back.

This article is part of a series on migration and displacement in and from Africa, co-produced by the Elephant and the Heinrich Boll Foundation’s African Migration Hub, which is housed at its new Horn of Africa Office in Nairobi.

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Politics

The Iron Grip of the International Monetary System: CFA Franc, Hyper-Imperial Economies and the Democratization of Money

Cameroonian economist Joseph Tchundjang Pouemi died in 1984, either poisoned or by suicide. His ideas about the international monetary system and the CFA franc are worth revisiting.

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The Iron Grip of the International Monetary System: CFA Franc, Hyper-Imperial Economies and the Democratization of Money
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Despite being one of Africa’s greatest economists, Joseph Tchundjang Pouemi is little known outside Francophone intellectual circles. Writing in the 1970s, he offered a stinging rebuke of orthodox monetary theory and policy from an African perspective that remains relevant decades later. Especially powerful are his criticisms of the international monetary system and the CFA franc, the regional currency in West and Central Africa that has historically been pegged to the French currency—at first the franc, and now the euro.

Pouemi was born on November 13th, 1937, to a Bamiléké family in Bangoua, a village in western Cameroon. After obtaining his baccalaureate and working as a primary school teacher, Pouemi moved to France in 1960, where he studied law, mathematics, and economics at the University of Clermont-Ferrand. Pouemi then worked as a university professor and policy adviser in Cameroon and Cote d’Ivoire. In 1977, he joined the IMF but quit soon after, vehemently disagreeing with its policies. He returned to Cameroon and published his magnum opus, Money, Servitude, and Freedom, in 1980. The recently elected president of Cameroon, Paul Biya, appointed Pouemi head of the University of Douala in August 1983—then fired him a year later. On December 27th, 1984, Pouemi was found dead of an apparent suicide in a hotel room. Some of his friends and students argue he was poisoned by the Biya regime (which still governs Cameroon), while others believe that harassment by Biya’s cronies drove Pouemi to suicide.

International Monetary System

Writing in the turbulent 1970s after the breakdown of the Bretton Woods regime of fixed exchange rates, Pouemi anticipated the three “fundamental flaws” with the international monetary “non-system”: one, using a national currency, the US dollar, as global currency; two, placing the burden of adjustment exclusively on deficit nations; and, three, the “inequity bias” of the foreign reserve system, which makes it a form of “reverse aid.” All three issues have been highlighted by the economic impact of the COVID-19 pandemic.

Long recognized as a problem, the challenges with using the US dollar as the world’s currency have once again become apparent. Low- and middle-income countries (which include essentially all African countries) have to deal with the vicissitudes of the global financial cycles emanating from the center of the global capitalist system. As the Federal Reserve raises interest rates to combat inflation by engineering a recession—because if borrowing costs rise, people have less money to spend and prices will decrease—they are increasing the debt burden of African governments that have variable-rate loans in US dollars. Already, the World Bank has warned of a looming debt crisis and the potential for another “lost decade” like the 1980s. Moreover, higher interest rates in the US lead to the depreciation of African currencies, making imports more expensive and leading to even higher food and oil prices across the continent.

Pouemi viewed the IMF’s attempt to create a global currency through the 1969 establishment of the special drawing rights (SDR) system as an inadequate response to the problems created by using the US dollar. The issuance of SDRs essentially drops money from the sky into the savings accounts of governments around the world. The IMF has only issued SDRs four times in its history, most recently in August 2021 in response to the COVID-19 pandemic. With African governments dealing with falling export earnings and the need to import greater amounts of personal protective equipment—and, eventually, vaccines—there was a clear need to bolster their savings, i.e., foreign reserves. The problem is that the current formula for allocating SDRs provides 60% of them to the richest countries—countries that do not need them, since they can and have borrowed in their own currencies. Of the new 456 billion SDR (approximately US$650 billion), the entire African continent received only 5% (about US$33 billion).

Decades ago, Pouemi had slammed SDRs as “arbitrary in three respects: the determination of their volume, their allocation and the calculation of their value.” Instead, Pouemi advocated for a truly global currency, one that could be issued by a global central bank in response to global recessions and that prioritized financing for the poorest countries. Such a reorientation of SDRs could provide a way of repaying African nations for colonialism and climate change.

Secondly, unable to get the financing they need, African governments with balance-of-payments deficits (when more money leaves a country than enters in a given year) have no choice but to shrink their economies. Pouemi strongly criticized the IMF, which he dubbed the “Instant Misery Fund” for applying the same “stereotypical, invariable remedies: reduce public expenditures, limit credit, do not subsidize nationalized enterprises” regardless of the source of a country’s deficits. Devaluing the currency is unlikely to work for small countries that are price takers in world markets and instead improves the trade balance by lowering domestic spending. The IMF has become “a veritable policeman to repress governments that attempt to offer their countries a minimum of welfare.” The current international monetary non-system then creates a global “deflationary bias,” since those countries with balance-of-payments deficits must reduce their spending, while those with large surpluses—like Germany, China, Japan, and the Netherlands—face little pressure to decrease their surpluses by spending more.

The third major issue with the current international monetary non-system is that developing countries have to accumulate foreign exchange reserves denominated in “hard” currencies like US dollars and euros, which means they are forced to transfer real resources to richer countries in return for financial assets—mere IOUs. Pouemi claimed that “if the international monetary system was not ‘rigged,’ reserves would be held as other goods like coffee or cocoa, gold for example. But the system is ‘rigged’; coffee reserves are quantified as dollars, pound sterling or non-convertible francs.” Instead, in the late 1970s, governments like that of Rwanda effectively lent coffee to the United States by using export earnings to purchase US treasury bills, whose real value was being quickly eroded by high inflation in the US. Hence, we live in a world where developing countries like China and Brazil lend money to rich governments like that of the US. As Pouemi explains: “The logic of the international monetary system wants the poor to lend to—what am I saying—give to the rich.”

CFA franc

Pouemi was also a harsh critic of the CFA franc, since maintaining the fixed exchange rate to the euro implies abandoning an autonomous monetary policy and the need to restrict commercial bank credit. Pouemi also argued that the potential benefits and costs of currency unions are different for rich and poor countries, and that therefore it is inappropriate to analyze African monetary unions through a European lens. His thoughts are especially relevant at a moment when the future of the CFA franc and West African monetary integration are up for debate.

In theory, by fixing the exchange rate to the euro, the two regional central banks that issue the CFA franc—the Banque centrale des états de l’Afrique de l’ouest (Central Bank of West African States) and the Banque centrale des états de l’Afrique centrale (Central Bank of Central African States)—have relinquished monetary policy autonomy. They have to mimic the European Central Bank’s policy rates instead of setting interest rates that reflect economic conditions in the CFA zone. The amount of CFA francs in circulation is also limited by the amount of foreign reserves each regional central bank holds in euros. Therefore, “the solidity of the CFA franc is based on restricting M [the money supply], a restriction not desired by the states, but one proceeding from the very architecture of the zone.” As a result, the economies of the CFA franc zone are starved of credit, especially farmers and small businesses, hindering growth and development. In Pouemi’s words, “There is no doubt, the CFA remains fundamentally a currency of the colonial type.”

When discussing the possibilities for a single currency for the Economic Community of West African States (ECOWAS), Pouemi stressed that the potential benefits and costs of currency union are different for rich and poor countries. “There is not only a difference of perception of the mechanisms of cooperation” between Europe and Africa, “there’s a difference of the conception of common life. Economic cooperation as it is conceived in the industrialized West is the Kennedy Round, North-South dialogue, the EEC, etc.—in other words, essentially ‘customs disarmament’ or common defense; armament is the rule, disarmament the exception.” In Africa, however, economic cooperation is a positive-sum game. Conventional economic theory argues against monetary integration among African countries, since they trade little with each other. But to Pouemi, the goal of monetary integration is precisely to get these countries to trade more with one another. He also questions the view that monetary integration should come last, following the same sequence as the European Union from free trade zone to customs union to common market and, finally, to currency union. “This view is not only imaginary, it is practically non-verified; we have seen examples. Theoretically, it is indefensible: a 10% decrease in tariffs could be … offset by a devaluation of 10%.”

Pouemi also dismissed arguments that Nigeria would dominate the proposed ECOWAS single currency as another example of the classic colonialist tactic of “divide and conquer.” While he acknowledged that “monetary union between unequal partners poses problems,” these are “only problems, open to solutions.” They do not make monetary integration unviable. Such integration need not limit sovereignty. In a regional or continental African monetary union, no “currency would be the reserve of others. Each country would have its own central bank, free to conduct the policy that best suits the directives judged necessary by the government. The only loss of sovereignty following such a union would be the respect of the collective balance. It would not be appropriated by anyone; it would be at the service of all. It would be, for that matter, less a loss of sovereignty than the collective discipline necessary to all communal life.”

Pouemi advocated for an African monetary union with fixed exchange rates between members, the pooling of foreign reserves, and a common unit of account—like the European Currency Unit that preceded the euro. He thought that the debate over whether the CFA franc is overvalued is misguided, since there is no a priori reason for its members to have the same exchange rate. Fixed but adjustable exchange rates—as in the Bretton Woods system or European Monetary System—would allow each nation greater monetary and exchange rate policy autonomy. Settling payments using a common unit of account instead of foreign exchange reserves would help economize on the latter. Moving toward the free movement of capital, goods and labor—as envisioned by the African Continental Free Trade Area—would help diffuse shocks through the monetary union. Finally, such a union would need to have a common policy on capital controls or at least collective supervision of international capital flows.

As Pouemi so eloquently lamented: “History will hold on to the fact that all of [Africa’s] children that have tried to make her respected have perished, one after the other, by African hands, without having the time to serve her.” We do not know what Pouemi could have accomplished had he had the time to serve Africa for longer. All we can do is heed his call that “in Africa, money needs to stop being the domain of a small number of ‘specialists’ pretending to be magicians.”

This post is from a partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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The Post-colonial Kenyan State: The Thorn in Our Flesh

The lesson from political economist Rok Ajulu’s academic work and activism: it’s not enough to change the “tenants,” but fight to change both the “state” and all of its houses.

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The Post Colonial Kenyan State: The Thorn in Our Flesh
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In early May 2022, with almost three months to the August election, Kenya had close to 50 presidential candidates, and 5,000 people running for the 1,500 Member of County Assembly (MCA) positions. Ultimately, not all of these aspirants will be cleared by the Independent Electoral and Boundaries Commission (IEBC) (more like “blunder commission” judging from the 2017 elections and its lack of preparedness for the August 2022 poll), but the question remains—one that the political economist, Rok Ajulu, asked in his 2021 book Post-Colonial Kenya: The Rise of an Authoritarian and Predatory State: what is it about the post-colonial state in Africa that makes so many people want to control it?

In this impressive compendium, Ajulu chronologically and exhaustively mapped out the authoritarian turns of the Kenyan post-colonial state. In doing so, he documented the predatory nature of the colonial regime and how three successive African governments— headed respectively by Jomo Kenyatta, Daniel Arap Moi and Mwai Kibaki—have built on this legacy and, in addition, weaponized ethnicity at specific junctures to consolidate control and accumulation. And not just any accumulation: predatory and parasitic hoarding—in the sum of trillions of dollars and with many detrimental effects for the population—that is only possible when steered, despite declarations to the contrary from the top.

While he charts the oscillating, often moderate and neo-imperial allegiances of actors such as Jomo Kenyatta (the late father of outgoing president, Uhuru), Tom Mboya and Moi—none of whom were great fans of the Mau Mau—Ajulu’s focus is on how the state “becomes brazenly the instrument of the dominant political elite. This type of regime gravitates towards authoritarian dispensation of power precisely because economic mobility and expansion of the new elite is largely tied to their continued control of state-power.”

This thesis, while not unique to Ajulu and recognized in everyday discourse, is anchored here in a prolific and comprehensive archive, which also makes evident, as does the author, that the predatory pursuits of politicians are not unencumbered, even against the heavy-handed authoritarian implements (read political assassinations, state sanctioned ethnic clashes) they use to entrench them. Although Ajulu does not dwell on protests or resistances  to this authoritarian rule over four decades(please read this powerful book by Maina wa Kinyatti for that), and focuses primarily on party politics and the trajectories of (in)famous politicians to narrate the incremental creation of an authoritarian state in Kenya, the constant tug and pull of class tensions and the heterogeneous actions of supposedly homogeneous ethnic populations are always on the horizon.

Who is this man Rok Ajulu? In the short film about him called Breakfast in Kisumu, his daughter, the filmmaker Rebecca Achieng Ajulu-Bushell, documents his academic and political labors dating to his exile from Kenya in the early 1970s. Oriented around interviews she had with him—and it is his narrations that piece together the diverse landscapes that are the visuals for this film (we actually, interestingly, barely see Ajulu)—his voice takes us through his life as a student, political activist  and academic, in a journey that spans Bulgaria, Lesotho, the UK and South Africa. The evocative images of these countries where Rok Ajulu lived, while recent, anchor this narrative that accounts for a life of political praxes in academia and beyond. Though his sojourns mainly pivot around academic pursuits, we also hear about his labors as an agricultural worker in Bulgaria, a pirate taxi driver in Fulham, London and, importantly, as an organizer with the Committee for Action and Solidarity for Southern African Students (CASSAS) while at the National University of Lesotho in the late 1970s and early 1980s (for this work he was imprisoned for three weeks).

It is, perhaps, this period as an anti-apartheid organizer in Lesotho that created the path to a life in South Africa from 1994. Here he taught at Rhodes University and married Lindiwe Sisulu, the current Minister of Tourism (and one of the aspirants vying to succeed Cyril Ramaphosa as South Africa’s next president), and daughter of renowned anti-apartheid activists Walter and Albertina Sisulu. Consequently, it is in South Africa, rather than Kenya, where his influence was more extensive, even as Kenya appears to have been the primary focus of his academic scholarship.

Ajulu-Bushell’s poetic film demonstrates that her father’s life was not ordinary. But it is perhaps the internationalist and pan-African paths he chose that led her to recognize him, as she does in this film, as a “father” but not a “parent.” Her bid to understand her father’s life as an adult and, simultaneously, to document his political praxes, appear to be what has prompted this documentary. While the style of the film may not be for everyone—there are a few seemingly gratuitous appearances of the filmmaker—Breakfast in Kisumu is an important tribute to a father, and one who is representative of a generation who endured many unanticipated and painful exiles for nations and lands which did not always claim them, but for which they gave their lives.

As the final book Ajulu wrote before he died of cancer in 2016, Post-Colonial Kenya: The Rise of an Authoritarian and Predatory State is informed by questions that, likely, the author grappled with throughout his life.

Against the impending 2022 Kenya general elections that are not cause for much inspiration —with the male dominated alliances, handshakes, intrigues and elite contestations that characterize it—Ajulu’s thesis still rings true: that the state is the primary vehicle for accumulation and thus engenders a predatory authoritarianism by those who want to control it.

After years in an exile(s) documented by Ajulu-Bushell’s film, I’m not sure how optimistic Ajulu was for our Kenyan future, for he wrote in his final book: “Besides the change of tenants at the state house, not much really changed. The mandarins who used to lord it over the hapless rank and file remained in their same old places.”

At the very least, this generation can turn to the histories Rok Ajulu has documented in his book, as well as those he lived, to reflect on how, for this election and the next, we are not just going to change the “tenants,” but will fight to change both the “state” and all of its houses.

This post is from a partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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