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Existential Threat? Why Prevailing Notions of Security are Illusory

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Meru, Kenya – TERRORISM JOINS THE TRADITIONAL QUARTET OF WAR, FAMINE, PESTILENCE, AND DEATH

Developments of the past two decades have elevated security concerns within every domain. Issues ranging from data to employment to identity now invoke the need for protection in some manner or form. Hot viruses and Biblical climatic events lie in wait. It is as if the Four Horsemen of the Apocalypse have dismounted, mutated, and insinuated themselves into everyday life. Our collective sense of angst has spiked since terrorism joined the traditional quartet of war, famine, pestilence, and death.

The demand for protection has never been so high. The rapid pace of global change in general feeds the post-truth perception that we inhabit a planet of unprecedented threat. In a world where we are constantly under attack from something real, imagined, or invisible, sowing terror has become the underdog’s weapon of choice. Safety has become a commodity and the bazaar has responded with gadgets and elixirs to keep uncertainty at bay. And for decades, Western governments and their military technologies have dominated the marketplace.

In a world where we are constantly under attack from something real, imagined, or invisible, sowing terror has become the underdog’s weapon of choice. Safety has become a commodity

There are compelling reasons — like the combination of capacity, donor funds, and diplomatic capital — that explain why the United States in particular has dominated responses across security-related fields. We can add science, and a dose of Christian morality and secular ethics into the mix. All of these factors have made ‘security’ a ubiquitous but tricky word. This is why some governments are still trying to figure out the practical impact of the Donald Trump government for their nations and regions.

East African policy makers do not have that problem. Kenya is a case in point. Because it is a primary theatre in the Long War Against Terrorism, the national government’s many shortcomings are routinely overlooked. The new administration in Washington is likely to reinforce the prevailing status quo even if it negates the substantial investment in promoting democratic governance that preceded it.

The buzz in Washington indicates that Peter Pham of the well-respected Atlantic Council will be appointed Undersecretary of State for Africa. Although progressive by the standard of Trump appointees, he is hawkish on security issues, and in sync with currently influential proponents of the boots-on-the ground school.

But there are voices challenging the sustainability of this relationship. For years, conservative and military critics abroad have been questioning the foundations of the LWOT, asking why those in charge of its unsuccessful execution on the ground are not held to account. Their liberal counterparts have interrogated the waste of trillions of dollars and the political capital squandered along the way.

Yet the architects of LWOT policies continue to enjoy immunity. We can therefor expect support for the military sector to continue for now, albeit with some major strategic modifications. One forward thinking military analyst, John Robb, recently tweeted that ‘US counter-terrorism policy has been on autopilot for over a decade.’ Donald Trump’s policies, including investing in obsolete conventional and nuclear weapon systems, is actually a step backward.

Unfortunately, Trump’s budget for militarisation comes with a corresponding reduction in American funding for developmental and humanitarian assistance.

In a letter sent to Congress, a group of 121 three-star and four-star generals wrote to Congress that, ‘Many of the crises our nation faces do not have military solutions alone,’ adding that ‘the military needs strong civilian partners in the battle against the drivers of extremism.’ When questioned on the cuts, Trump security spokesman Sebastian Gorka replied, ‘If poverty was the problem, half of India would be terrorists.’

MILITARY FUNDING GREASES THE WHEELS OF THE MULTINATIONAL CONVOY

The extended drought ravaging the East African region provides the backdrop for the new American president’s promise to eradicate Islamist extremism. Double the numbers affected by the 2011 famine are at risk. The US provides one-third of the emergency assistance demanded by such natural disasters across the world.

Documenting problems of waste, top-down approaches, counter-productive projects, and dependency has catalysed improvements in the design and delivery of external assistance. The same cannot be said for the counterterrorism industry: The US State Department counted 348 terrorist attacks worldwide in 2001, compared with 11,774 attacks in 2015.

For years, African governments have bought into the political narrative supporting the retaliatory responses adopted by the likes of Bush and Blair. Military funding used to grease the wheels of the multinational convoy is usually diverted from other developmental initiatives. Choices, as a former American undersecretary of state declared, have consequences.

For example: USAid’s Secure Project in Lamu was assisting some of the area’s most marginalised inhabitants to understand and utilise Kenya’s new land laws to protect their communal lands. The project was abruptly suspended and Lamu found itself instead hosting a contingent of marines and drone operators at Camp Simba. The presence of the best army in the world, however, did not deter subsequent actions such as the series of bloody raids across the Lamu mainland in 2014.

The attacks were used to promote Al Shabaab videos and messages about the Christian usurpation of local lands. The high quality production and on-target messages about land and social justice generated by the jihadi propaganda machine should not be underestimated. Even if Shabaab is eradicated, the influence of their social message will endure, and can seed new episodes of violent resistance long after the current generation of combatants is gone.

Kenya is already paying a high price in the form of terrorist taxes like the shift of the Uganda oil pipeline to the Central Corridor route, several years of dead tourism on the Coast, and the ineffective if not misconceived military misadventure in Somali.

When questioned on the cuts in humanitarian funding, Trump security spokesman Sebastian Gorka replied, ‘If poverty was the problem, half of India would be terrorists’

A decade of COIN has seen Al Shabaab, like the mythical Anteus, remain firmly rooted in the ground while becoming more elusive as the demoralising attacks on the Kenya Defence Forces in the Baure, El Adde, and Kulbiyow bases demonstrate. The KDF suffered significant casualties in all these raids while the vigour of Al Shabaab to carry out missions is undiminished.

Such LWOT-related costs should serve as a recurring reminder that currently prevailing notions of security, however strongly imprinted on our psyches and burnt into our brains through years of mainstream media and government-sourced reports, are illusory.

The now common use of the term, existential threat, is a rather ironic example of the conundrum. I personally do not know who introduced ‘existential’ to the lexicon of security; in most of the contexts in which it is used the meme appears to connote a zero-sum threat to material existence. For Trump advisor Steve Bannon, it fits his polarising vision of the world of Judaeo-Christian capitalism at war articulated at a Vatican conference in 2014.

Citing existential threats as the reason for combating Islamic terrorism makes it necessary that we clarify the current use or misuse of the term.

The original concept dates back to the philosopher Soren Kierkegaard, who said that individuals must take responsible for imparting meaning to their existence. The search for existential authenticity allows us to live with sincerity and a passion for life. Kierkegaard saw modernity as a threat to these qualities. After two world wars, a new generation of European intellectuals adopted his concern over the increasingly mechanical quality of material existence.

Writers like Camus and Sartre identified the term existentialism with an enduring quest for meaning. This requires that the individual define one’s being in terms of their essential humanistic values, and not submit to the labels and definitions imposed by society. Finding one’s inner identity was an antidote to the sense of dread that comes with living in a confused, disoriented, and apparently meaningless and absurd world.

Much existential thought focused on being entrapped by the absurdity of the contemporary world. The resulting angst is born out of the perpetual danger of having everything meaningful break down. The philosophers proposed an escape: We are defined by our actions. The praxis associated with this existentialism was one of the behind-the-scenes drivers of the anti-war movement and environmental activism that gathered speed during the 1960s.

The validity of an idea is confirmed when it comes back in different forms. The practice of Islam now helps fill the gap for Muslim and converts who feel trapped by monolithic economic and political forces. This is why variations on the secular existentialism of the mid-20th century are discernible in the accounts of self-confessed jihadis who survived to write about their conversion to Islamist extremism.

THE ONLY PHILOSOPHIC PROBLEM IS SUICIDE

This line of thinking influenced the essay by Albert Camus, The Myth of Sisyphus, where the author observed that in the absurd world we now inhabit, ‘There is only one truly serious philosophical problem, and that is suicide.’ The angst and existential dread permeating the post-Christian capitalism Islamic world made it easier for the theologians of jihad to weaponise suicide bombing as a way out, with the added incentive of martyrdom.

Nuclear warfare, climate change, the very real possibility of a global pandemic are existential threats. Poverty in the form of 17 million people facing starvation is an existential threat. Religious violence with its long historical pedigree is not.

CAN IGAD AND KENYA SUCCEED WHERE GOLIATH HAS FAILED?

The writing on the wall is now in boldface. The fiscal impact and human suffering incurred by the region’s real crises now demand that influential actors and thinkers across the greater Horn region look within for solutions.

Writing in the Sunday Nation of March 12, Peter Kagwanja notes that world powers have always cultivated and utilised soft power to justify their foreign interventions; colonialism and its aftermath are proof of how Africa has fared poorly in the battle of ideas. These observations reinforce his call for a new breed of policy think tanks mandated with the ‘extraordinary task of decolonising the policy space where decisions affecting Africa are negotiated and made.’

The revisionary political trends disrupting business as usual in Western democracies indicate the time is ripe to act on Kagwanja’s challenge. The failure of hard power to counter violent extremism points to redefining what security means in the regional context as a good place to start. The process is actually underway on the regional level.

In another Sunday Nation article, Kagwanja describes the formulation by Igad of a regional initiative to counter violent extremism (CVE) in its different forms. The Igad project is reviewing conventional securitisation policies with a view to formulating long-term strategies specific to the security needs of this region. Actions already underway include the development of CEWARN, the regional conflict early warning system that serves the same objective through its activities on the ground.

The angst and existential dread permeating the post-Christian capitalism Islamic world made it easier for the theologians of jihad to weaponise suicide bombing as a way out, with the added incentive of martyrdom

CEWARN is a practical tool for conflict prevention based on local information networks that collect and document relevant information and data on cross-border and related pastoral conflicts. It combines the accumulation of big data with a unique combination of national, regional, civil society, and grassroots relationships. Operationalisation over the past decade focused on testing its methods in three cross-border clusters across the region. The success of the predictive algorithm developed over this period sets the stage for its rollout on a larger scale, and for its application to other problems such as the spread of Ebola, circulation of small arms, and counterterrorism.

Although still a work in progress, adoption of the CEWARN model by other regional organizations like Ecowas attests to the efficacy of CEWARN’s methodology. A book documenting the vision, methods, and evolution of the CEWARN system since its inception in 2002 will provide a robust picture of the progress achieved so far. In the meantime, this writer can affirm that CEWARN is a positive presence in the areas where it works, and that the replication of the early warning model across the continent will enhance the scope of African Union operations.

Administratively, the AU has a long way to go. This does not contradict the value of its human resources and knowledge of the region’s problems. Subsequent developments in Libya showed the arguments made by Secretary General Jean Ping to involve the African Union as a mediator to be correct. More recently, the AU’s negotiation of the succession impasse in the Gambia contrasts favourably with the messy outcome resulting from the UK’s quasi-diplomatic intervention in Sierra Leone a decade earlier.

The directionality of developments in this domain reinforces Kagwanja’s thesis across a number of important policy domains. It is now reasonable to expect that a combination of regional co-operation, economic integration, and the bottom-up dynamics now gathering momentum will over the long run counteract the sources of the region’s endemic insecurity. Resilience conditioned by years of low-intensity conflict and uncertainty is indicative of local communities’ ability to stay the course.

By the same measure, we can anticipate that national governments will continue to be the weak link as the continent’s age of capital gathers momentum.

In his 1981 book on The Emergence of African Capitalism, John Illife posited that the solution for most the continent’s problems lies in the rise of a truly indigenous and creative capitalist class. Although we can see signs of this emergence in the private sector in the likes of Alex Dangote and Mohammed Ibrahim, the influence of rent-based accumulation will dominate for the time being. The region’s unexploited oil reserves, strategic minerals, and the large tracts of land coveted by foreign agribusiness investors will continue to encourage elites to place their interests above the public good while they and their clients on the ground compete to claim their share of the spoils.

Kenya is a significant test case of this emergence due to its status as the region’s most advanced exemplar of indigenous capitalism. It is also a crucible of internal and external conflicts. The violent forces incubating in post-state Somalia also gave rise to Africa’s most dynamic example of trans-border economic synergy. Kenya straddles both.

THE REAL POLITICS OF THE HORN OF AFRICA

The operations of the new regional political marketplace paralleling the state-brokered capitalism of the Kenya model is the subject of Alex De Waal’s 2016 book, The Real Politics of the Horn of Africa. De Waal’s regional case studies illuminate how political entrepreneurs operating in the new transactional space sustain many of the violent struggles for socioeconomic resources complicating conventional securitisation policies.

In an earlier discussion paper, De Waal addresses the ‘notoriously difficult’ task of assessing class forces in Somalia’s predominantly pastoralist economy. He analyses how what appear to be clan and factional driven struggles to control resources camouflage the class-based factors operating underneath. Siad Barre’s government elites could not penetrate the livestock export economy that was generating 80% of the country’s revenue. Instead, they usurped control of the agrarian economy of southern Somalia.

The commercial class dominated by livestock traders managed to reassert control of the livestock trade networks extending deep into the hinterland. Their co-operation with the weak new state institutions in Somaliland and Puntland accounts for the relative stability of the northern region.

De Waal observed that the failure to consolidate similar control in southern Somalia and the exports passing through Kismayu’s port would result in the region’s livestock exports passing through Kenya. This assessment, made in 1996, came to pass.

The disenfranchisement of agro-pastoralists, herders, and peasant farmers in Juba and Shebelle river regions was exacerbated by the competing warlords’ efforts to take over where Barre left off. Sorting out the economic disruptions and land ownership in the country’s most productive region, according to De Waal, is a basic prerequisite for establishing any effective national government. This prediction also proved true.

The region’s unexploited oil reserves, strategic minerals, and the large tracts of land coveted by foreign agribusiness investors will continue to encourage elites to place their interests above the public good while they and their clients on the ground compete to claim their share of the spoils

The AK-47 was invented as an anti-capitalist weapon. But together with Sharia law, it reinforced formal principles regulating mercantile capitalism in Somalia. Local business communities supported the Islamic courts, which operated as a court of appeal for Somali customary law. Case studies of African rebel movements attest to how the practical task of governing typically moderates the extremism of insurgents. In any event, radicals controlled only three of the 16 Islamic courts in the capital and this was beginning to happen before the defeat of the ICU saw Al Shabaab grow from a militia with less than 50 men under arms in 2005 to a regional vehicle combining Somali nationalism with international jihadi extremism.

History repeated itself. In the 1996 paper, De Waal advised, ‘It is worthwhile to study its approach to the land question in the riverine areas it formerly controlled.’ Several consultants who spent time there before the KDF invasion of 2013 personally reported to me that the southern areas under their control had stabilised under Al Shabaab, and that administration of local affairs was efficient, peaceful, and equitable.

KDF EMPOWERS SHABAAB’S JIHADI FACTION

The 2013 occupation empowered Al Shabaab’s international jihadi faction at the expense of the nationalist faction, and encouraged militant recruits from Kenya’s Al Hijra chapter to carry out their attacks in Nairobi, Lamu, and Garissa.

The renewed international interest in land and extractive resources is now transforming the Horn of Africa into the world’s latest theatre in the Great Game. The contest between state-based forces and agents of De Waal’s political marketplace in this scramble will influence how the current phase of capital penetration and infrastructural investment plays out.

Over time, the region’s states will either harness its natural and human resources for the benefit of its people, or they will lapse into a collection of ethnically divided regimes with pockets of semi-stateless territory where local compradors and political warlords cut deals with the masters of international capital.

The provision of security as a public good lies at the centre of the equation, but where will it come from? In the case of Kenya, only 3% of the 2,998 respondents participating in the recent National Constitutional Socioeconomic Audit approved the state’s handling of security issues.

Sustained commitment to implementing the country’s new Constitution will reduce the nation’s internal frictions. The current template for dealing with Al Shabaab is a trickier proposition.

Kenya’s uniquely symbiotic relationship with Somalia inscribes a basically positive trajectory when not zigzagging between episodic violence and tit-for-tat security operations

Impunity, corruption at the top, and the poor morale among the rank and file has undermined the KDF’s mission to isolate Al Shabaab. Other practical examples of Kenyan-Somali co-operation serve as a counterpoint to the failures of state and international interventions.

Kenya’s uniquely symbiotic relationship with Somalia inscribes a basically positive trajectory when not zigzagging between episodic violence and tit-for-tat security operations. Conflict has contributed to the convergence of Kenya’s capitalist economy and the creative problem solving of Somali entrepreneurs. The rise of Eastleigh in Nairobi as a prototype of transnational commerce is very much a Kenya-Somali hybrid phenomenon that Neil Carrier documents in his recently published book, Eastleigh, Nairobi’s Global Economic Hub.

Even nomadic capital seeks out the protection provided by a functional state from marauding militias and angst-driven religious zealots. A lot of the investment capital generated by the Somali diaspora ends up in Kenya. The spread of peace infrastructure on the ground, co-operation among state administrators working in border zones, and spontaneous community policing including interventions like the selfless actions of ethnic Somalis in Mandera to protect their Christian countrymen represent a strategic alternative to the increasingly meaningless cycle of violence.

In the final chapter of his book, De Waal concludes that the ‘greatest dangers facing the Horn region are mineral rents and counterterrorism funding, followed closely by any form of international security co-operation (including peacekeeping) that increases the size and opacity of military budgets.’

Regional rivalries have hampered Igad’s prospects for effective collective action in the past. In an interview appearing in the CEWARN Compendium mentioned above, a former director, Dr Martin Kimani, connects the points made by Illife, Kagwanja, and DeWaal in his nuanced overview of the organisation’s peace-building mission:

We are moving into a period of more intensified conflict. But that does mean more intensified violence. Let’s make it clear that in fact the Horn, given its contradictions, is far more peaceful than might be the case. In fact, the people of the Horn by and large are far more patient, far more flexible than many other people on the planet in light of the challenges we have here. The Igad region is actually at a very important moment in which countries and governments must decide how exactly are we going to handle having much more economic activity in our territory because there is going to be a gap between that and the time when all the people in the countries are included in that prosperity. Dealing with that gap requires intensified peace building, inclusion, and awareness that, since some people will be left behind, we need to keep the peace with each other.

Igad’s peace infrastructure, CVE policies, and early warning mechanism are adaptive homegrown initiatives designed to contain the multiple sources of violent extremism and the circulation of modern weapons abetting them. The rapid response protocol now under development recognises that properly calibrated use of force will always have a role. There will be blood.

Kenya and its neighbours, despite the mistakes and bungling characterising its anti-terrorism efforts up to now, are better off reconceptualising how to domesticate the range of threats to public security than following the lead of those calling the shots from abroad.

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Mr. Goldsmith is an American researcher and writer who has lived in Kenya for over 40 years.

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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 Tuesday 2 April 2019, social workers, youth group members, activists and friends, all residents of Mathare in Nairobi, hurdled together on the top floor of the Macharia building near the Olympic petrol station at Juja road as they watched in horror, as two schools were set alight by police. 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 were blocked by police in their tracks. Furious shouts filled the air as licking flames destroyed what residents had built over decades; businesses, schools and homes, all gone in minutes.

This criminal act of arson by police of a part of a Nairobi neighborhood took place on the third day of a raid against the local alcohol economy, spearheaded by the notorious ‘killer cop’ Rashid. This police officer gained notoriety after being filmed executing two teenagers on a busy street in Eastleigh in broad daylight on 31 March 2017. Ironically, the raid against the local alcohol economy in Mathare under his command started exactly two years later, on Sunday 31 March 2019. In between, Rashid has killed, maimed and harassed many people, especially young and poor men, in Mathare and beyond, and with absolute impunity.

Subsequently, Rashid was free to walk into Mathare on the aforementioned Sunday while guiding a troop of police officers down the valley where they barged into homes and bars to destroy alcohol and other belongings of local business owners and their employees. Shockingly, the Pangani OCS (Officer Commanding Police Station) and the Area Chief both claimed to ‘have had nothing to do with the raid’, despite eyewitnesses who stated that regular police and AP officers and equipment (such as a well-known land rover used by AP) were employed during the raid. Residents wondered how a full-blown war be waged on residents for days by police without the police officers in charge ‘having nothing to do with it’?

As early as 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

That first Sunday night of fear chaos and gunshots transpired without dead bodies, but many had lost weeks of work and earnings, and others nursed bruises and deep cuts from trying to defend homes and properties from the pillaging police. One of us found his grandmother crying on Monday morning; a woman who 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. She lost 4000 shillings, her monthly earnings, and was left in deep 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 for yet another day and night, until on Tuesday tensions between angry residents and police culminated into protests by alcohol distillers.

History of the local alcohol 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 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. This area was wedged in by several military and police bases, and the influx of soldiers during the war period (1940-45) attracted a growing number of women in search of work. These women were among the many young people who were forced to leave their homesteads in the colonial confinements of people called ‘Native Reserves’ in the rural areas following soil erosion, population pressures and the demand for ‘hut tax’ (which had to be paid in cash to the colonial government). Even if women comprised the majority of residents in Mathare from the onset, men increasingly migrated to live here—often after being chased from colonial settler farms when mechanization of farm work took hold during the late 1930s. Following these and other developments, Mathare became the nexus 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’.

After independence in 1963, alcohol production and distribution remained a home-based economy, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the 1980s and 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. Also, they soon found that the profit margins for chang’aa were much higher than for instance busaa, and soon multiple cooking sites emerged along the banks of the Mathare river. Profit margins have fallen significantly since the 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, a major shortage of firewood often plagues adjacent neighborhoods, but every other small business on Mau Mau Avenue in Bondeni, a neighborhood in Mathare, sells large quantities of this wood. 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 trucks so large they can barely enter the ghetto. 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. Suffice to say that 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.

After independence in 1963, alcohol production and distribution remained a home-based economy, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the 1980s and 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

After days without work and consequently food, alcohol distillers took to Juja road on Tuesday morning, 2 April 2019, to protest the illegal and violent raid by police. The few media outlets describing the protests 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 who make on a good day, Kshs 300 for 10 hours of backbreaking work, barely enough to provide for a family of four. 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 of families hungry for days. This provoked 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 violently dispersed people trying to stop the fire from reaching the labyrinth of homes, businesses and schools down the street leading into Mabatini, thus effectively enabling the fire to destroy several houses and properties. Teargas was lobbed at the crowds of people who had gathered with buckets of water trying to rescue their homes and belongings. The teargas canisters further ignited the fire as residents watched their schools and homes burn to the ground.

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

Distraught, many slept outdoors in the cold on Tuesday night. The fire also destroyed the electricity supply line and the ensuing blackout increased insecurity. One resident recounted that, “For nights, gun shots have become our ringtone.” Another lamented, “We live in a war(zone), but nobody cares.” As Mathare endured this terror for three days and nights, residents watched in disbelief as the evening news headlines either ignored their plight and the criminal acts by police or apportioned the blame decidedly on them using the pejorative ‘angry youth’ frame. Mathare residents were profiled as criminals and the local alcohol economy as illicit and dangerous. Indeed, misconceptions about Mathare and local industries persist. For example, chang’aa was legalized in September 2010 and is not an ‘illicit brew’. 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 or enable owners, distillers and sellers to obtain licenses and invest in improved production? The answer is simple: too many people high-up in police and government ‘eat’ from the industry as it is.

The Culture of Policing In Mathare

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 solicit bribes. For each drum of kangara, the police receive at least 200 KES. Let us assume that there are seven distilling sites (we don’t disclose any specific details for security reasons) which have the capacity to process seven drums simultaneously, meaning there are 7 fires operative at each site at all times. Each drum takes three rounds to cook and each round takes 1 hour (45 minutes to distill and 15 minutes to cool). So seven sites and seven fires operating for 24 hours can process 392 drums of distilling mixture per day. For each drum, police receive Kshs 200 and the figure adds up to an average of kshs 70 000 per day and in excess of Kshs 2 million per month. This is a conservative estimate since it does not include the bribes police take from bars and alcohol distributors, and it does not include police officers who run their own alcohol operations. And the number of drums along the riverside also vary immensely. Sometimes, a jiko can have 15 or 20 fires operating at once, while at other times only three or four. The above calculations, though based on thorough research, 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 does not entail 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 the notorious Rashid went out of his way to impress in the incoming Inspector General Mutyambai. 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 informal 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 Terrorism Police Unit).

Nevertheless, the ‘killer cops’ 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, under this name, of suspected ‘thugs’ before and after they purportedly shot them. Speculations continue to the date 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. Others state that the different ‘Hessy’ and adjacent pages on Facebook were not created by one or more police officers, but by a team of bloggers working in collaboration 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. 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 neighbors often go beyond merely monetary motivations or concerns about crime. Local competition or revenge plays a big role as well. Police also depend too much on such secondary and often faulty intelligence 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. Our fellow activists have documented several cases that follow this pattern.

Crackdowns briefly slow production but do not alter the make-up of this industry in any way, yet the Mathare residents who have for generations depend on this economy bear the brunt for the simple reality that they cannot afford to miss a day of work.

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 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 safer and bring it in line with regulations, it needs to work together with business owners and their employees to develop ways to improve production standards. 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 briefly slow production but do not alter the make-up of this industry in any way, yet the Mathare residents who have for generations depend on this economy bear the brunt for the simple reality that they cannot afford to 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?”

“Why are there no people coming from Red Cross, or our government leaders, like when Dusit happens or Westgate? Are we not human beings?”

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