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Raila Odinga and the Comrades

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Raila Odinga and the Comrades
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Forgive me, comrades
If I say something apolitical
And shamefully emotional
But in the dark of night
It is as if my heart is clutched
By a giant iron hand:
“Treachery, treachery” I cry out
Thinking of you, comrades
And how you have betrayed
The things we suffered for 

– Dennis Brutus

During a 1998 visit to Uganda by US President Bill Clinton, First Lady Hillary Clinton was meant to have dinner with representatives of the Makerere University students’ guild. However, the Makerere students took the risk and liberty to invite an extra guest to the table, a Kenyan student from the University of Nairobi with whom they had built a comradeship. The Kenyan was part of a group campaigning for the reinstatement of the Students Organisation of Nairobi University (SONU), a historically radical organisation in Kenya’s largest and oldest university that had been banned in 1987. The body was reestablished in 1992, after which it was banned again.

Throughout this period, Kenya’s strongman, Daniel arap Moi, was eternally fearful that SONU would partake in an onslaught against his authoritarian regime. There was a history. In 1982, when Moi was barely half a decade into his 24-year reign of terror, tens of University of Nairobi students – seen as coup sympathisers of an attempted putsch by junior Kenya Air Force officers – got rounded up by the nudged state. The majority were released after brief detentions, while those identified as lead troublemakers, including SONU president Tito Adungosi, got locked up on trumped-up charges. Adungosi was jailed for five years, dying mysteriously barely days before his release date. Those who survived the reprimand from the paranoid regime, like future Kenyan ambassador to the US, Nicholas Rateng’ Oginga Ogego, who served a six-year jail term, remained living examples of the spirit of defiance SONU instilled in its cadres – the Comrades.

Kenya’s future Prime Minister Raila Odinga was similarly netted along with the University of Nairobi students in 1982, accused of working in cahoots with the coup plotters. Odinga was charged with treason, an accusation which was later dropped. He was detained without trial for six years. His co-accused, journalist Otieno Mak’Onyango and University of Nairobi lecturer Alfred Vincent Otieno, whose house was allegedly used as the coups nerve centre, were similarly detained. The twelve Kenya Air Force masterminds of the coup died by hanging after being repatriated from Tanzania, where they had sought refuge. No one could have predicted that almost four decades later, in 2018, it would be these University of Nairobi students from the 70s, 80s, 90s and even the 2000s who would anchor Odinga’s political project.

In his boldest challenge to Uhuru Kenyatta’s legitimacy as President of Kenya, Odinga – who had disregarded warnings from the state, including one from the Attorney General who equated the oath to an act of treason punishable by death – lifted a green Bible with his right hand, surrounded by a trio that represented three generations of radical SONU student activists from the 70s, 80s and 90s.

At the Kampala dinner with Hillary Clinton, the Kenyan student presented the First Lady with a hurriedly prepared dossier documenting gross human rights violations in the country. The case the student sought to make was that as Kenya stood at the time, there was no single organisation or formation – including the parliamentary opposition to which Odinga belonged – that was bold enough to stand up to the state and challenge its excesses. Therefore, reinstating SONU was the only viable option in keeping the rogue state in check. It was an exaggeration to claim that only SONU could stand in the gap at a time when the civil society was greatly emboldened, but that embellishment did not take away from the historical centrality of SONU in the clamour for change, including when such activities meant death, torture, exile or imprisonment.

As it turned out, Hillary was sufficiently persuaded by the young man’s argument. Decisive phone calls were made across Kampala later that night, where Moi, who had gone to meet his US counterpart, was implored to unban SONU. It was that same night that the Kenyan president insisted on meeting Moses Oburu, the Kenyan student who had aired his country’s dirty laundry in Kampala. The two eventually met back in Nairobi, where SONU’s proscription was lifted.

It is this sort of mystique that has shrouded the University of Nairobi students’ organisation for decades. It now appeared that cross-generational radical figures who served within its ranks had finally found a point of convergence within the Kenyan body politic in the form of a shared national political project – the presidential candidacy of Raila Odinga, which morphed into a movement seeking more than the presidency – around which they coalesced and were reliving their days of youthful fervour, challenging a government they considered illegitimate.

As Odinga took the now infamous oath as “The People’s President” on January 30th 2018 at Nairobi’s largest public park, Uhuru Park – packed with tens of thousands of his supporters – one thing was conspicuous to the discerning observer. In his boldest challenge to Uhuru Kenyatta’s legitimacy as President of Kenya, Odinga – who had disregarded warnings from the state, including one from the Attorney General who equated the oath to an act of treason punishable by death – lifted a green Bible with his right hand, surrounded by a trio that represented three generations of radical SONU student activists from the 70s, 80s and 90s. The three outspoken lawyers-turned-politicians formed a semi-circle ring around Odinga.

Standing on Odinga’s right was Miguna Miguna, who was expelled from the University of Nairobi in 1987 and exiled in Canada, where he completed his studies and practised law for fourteen years. Miguna briefly served as SONU’s Organising Secretary at a time when the state cracked down on him and his colleagues, led by Wafula Buke – a current Odinga confidant and strategist – for supposedly being funded by Libya to destabilise the Kenyan state. It was the clamping down on the likes of Miguna and Buke that led to SONU being banned in 1987. Prior to January 30th, Miguna had overtly admitted and boasted of being in the custody of “instruments of power” with which he intended to use to swear in Odinga as president, all along daring the police to arrest him.

In a dramatic dawn attack lasting at least an hour on February 2nd, the Friday after Odinga’s oath, a heavily armed police unit descended on Miguna’s residence in Nairobi and used explosives to blow his front door open. Apart from his role in administering the oath, the state claimed that Miguna’s residence housed weapons and subversive material meant to undermine the government. The former prime ministerial advisor to Odinga was driven away in a convoy of police vehicles and was clandestinely detained for days, with his lawyers and doctors prevented from accessing him despite successive court orders demanding his presentation in court or his immediate release.

In the case of the event of January 30th, it appeared the three men manning Odinga’s oath-taking had assumed pseudo-constitutional roles for themselves, with Miguna Miguna, the tallest and loudest of the three, administering the oath, thereby taking the place of Chief Registrar.

On Tuesday, February 6th , Miguna was deported back to Canada aboard a KLM flight. The state alleged that he renounced his Kenyan citizenship when he took up Canadian citizenship during his time in exile, an allegation Miguna continues to refute. On a layover in Amsterdam, Miguna gave interviews to international media, stating how he had been tortured by the state, not having taken a bath for five days. Speaking in Toronto, he continued issuing edicts to Odinga’s supporters, asking them to stay defiant. The judiciary has since invalidated the deportation.

Behind Odinga stood MP Tom Kajwang – dressed in a black robe and wearing a white judicial wig – who coincidentally served as SONU president in 1992 after the organisation was reinstated following the 1987 ban necessitated by the likes of Miguna Miguna. Kajwang’s elder brother, the deceased lawyer and MP Otieno Kajwang, like those of his ilk in the 80s, had been expelled from the University of Nairobi and forced to complete his studies at Uganda’s Makerere University. By standing next to Odinga, Tom Kajwang was living up to his own convictions as well as those of his deceased brother, a renowned longtime Odinga loyalist. On January 31st, the Wednesday after Odinga’s oath, Kajwang was briefly arrested for his role in the affair.

To complete the oath-administering troika was lawyer and Senator James Orengo, who stood on Odinga’s immediate left. Possibly Odinga’s current right-hand man, Orengo has travelled the long, turbulent liberation struggle journey together with Odinga, marked with intervals of falling out and making up. A Kenyan liberation stalwart, Orengo served as SONU president in 1972, later becoming a dependable protégé to Odinga’s deceased father and Kenya’s first Vice President Jaramogi Oginga Odinga. It was Orengo, a senior respected lawyer, who led a team of litigants in successfully arguing for the nullification of the August 8th 2017 presidential election by Kenya’s Supreme Court. The team argued that Odinga’s victory had been stolen by the incumbent, Uhuru Kenyatta, in collaboration with a corrupted electoral commission whose head of technology, Chris Msando, was found gruesomely murdered a week before the elections.

As his two co-conspirators in administering the oath got picked up by the police, it became clear that the state was aware of James Orengo’s stature within the opposition ranks – possibly being Odinga’s Number Two in terms of struggle credentials – a fact that made the security agencies not pounce on him like they did on the other two. It was with the same logic – that such a high profile arrest might result in massive public unrest by opposition supporters across the country – that the state shelved any intention of arresting and charging Odinga with treason.

Constitutionally, the presidential oath is administered in public in front of the Chief Justice, in whose absence the Deputy Chief Justice does the onus. The Chief Registrar of the judiciary usually administers the oath. In the case of the event of January 30th, it appeared the three men manning Odinga’s oath-taking had assumed pseudo-constitutional roles for themselves, with Miguna Miguna, the tallest and loudest of the three, administering the oath, thereby taking the place of Chief Registrar. In their political role-playing, either Tom Kajwang or James Orengo must have been the Chief Justice. During opposition rallies later on, Kajwang referred to himself as Chief Justice of “The People’s Republic of Kenya”. The whole performance might have been sketchy and hurriedly put together – with Odinga’s only instrument of power being a piece of paper mounted on a clipboard, an inauguration certificate masquerade – but to the millions of opposition supporters, this symbolism rejuvenated their resolve for rebellion against the state.

Like the three men surrounding Odinga on January 30th, the person appointed to chair the committee charged with organising the Peoples Assembly was Oduor Ongwen, who served as SONU Secretary-General in 1982. Before assuming this role, which was pivotal in working towards Odinga’s eventual coronation as “The People’s President”, Oduor had been appointed executive director of Odinga’s party back in 2015, a development that had ushered in the proper entrenchment of former University of Nairobi radicals within Odinga’s official political machine.

This was not the first time Odinga was being pushed to take an oath either as president or as an alternative president of Kenya. In 2007, on realising that the incumbent Mwai Kibaki was probably interfering with election results in a bid to steal Odinga’s victory, members of Odinga’s inner circle, including James Orengo, rooted for their man to take an oath of office to preempt electoral fraud. But as they were still consulting, the electoral commission declared Mwai Kibaki as the winner of the election, which resulted in violence across the country. The chaos and bloodshed led to a coalition government, with Odinga as Prime Minister. A decade later, Odinga would have no choice but to succumb to the pressure from the Comrades to take the oath.

Following the nullification of the August 8th 2017 presidential election, the Supreme Court of Kenya ordered – based on a constitutional provision – that a fresh presidential election be held within 60 days. As they celebrated their victory on the steps of the Supreme Court, Odinga and his coalition’s lawyers immediately cautioned that unless massive electoral reforms took place before the fresh presidential election, the group would not participate. In keeping to his word, Odinga pulled out of the repeat election, which the defiant Uhuru Kenyatta won with an unprecedented 98.2% majority. Odinga then proceeded to mobilise his supporters across the country, forming the Peoples Assembly – which they argued was founded within the constitution as a direct way of Kenyans to exercise their sovereignty – whose climax was the oath of January 30th.

Like the three men surrounding Odinga on January 30th, the person appointed to chair the committee charged with organising the Peoples Assembly was Oduor Ongwen, who served as SONU Secretary General in 1982. Before assuming this role, which was pivotal in working towards Odinga’s eventual coronation as “The People’s President”, Oduor had been appointed executive director of Odinga’s party back in 2015, a development that had ushered in the proper entrenchment of former University of Nairobi radicals within Odinga’s official political machine.

Like a number of vocal University of Nairobi students in the early 80s, Oduor was first arrested and detained without trial for two months following the 1982 attempted coup. He was accused of being one of the coup plotters – a predicament that befell tens of University of Nairobi students at the time. He was later rearrested in 1986 and sentenced to four years in prison for sedition, getting released prematurely in 1988, after which he fled the country in 1990, escaping a police swoop targeted at agitators for pluralism. He was exiled in Sweden.

Before Oduor was appointed executive director of Odinga’s party, Wafula Buke, a fellow political prisoner who served as SONU president in 1987 – alongside Miguna Miguna, the man who administered Odinga’s oath – instigated an internal coup, declaring himself executive director of Odinga’s party. Buke was serving as deputy director in charge of strategy, and upon the unceremonious ejection of the previous executive director on suspicion of spying for Odinga’s opponents, Buke declared that it was only natural for him to take up the position.

Known for his militancy, Buke was among former University of Nairobi student activists who went as far as being trained in guerilla warfare in Uganda in an attempt to violently overthrow the one-party Moi state in the early 90s, a plan which was shelved when the state relaxed its repressive laws and agreed to multiparty democracy in 1991. It is not an openly discussed topic, but a larger group of dissidents, including some close to Odinga, were involved in seeking international support for the training exercise in Uganda. Other than being jailed for five years after being picked from his hostel room at the University of Nairobi, Buke was hunted down in the early 90s for being associated with the February Eighteenth Revolutionary Army (FERA), a ragtag militia that unsuccessfully attacked Kenya from Uganda in a frail coup attempt.

The person who became the public face of the intellectual and ideological wing of Odinga’s coalition was Oxford-educated economist David Ndii, who attended the University of Nairobi in the mid-80s and was similarly arrested and detained on suspicion of being involved in subversive activities. As the head of the coalition’s technical team, Ndii was seen as the father of Odinga’s political manifesto.

However, the person who became the public face of the intellectual and ideological wing of Odinga’s coalition was Oxford-educated economist David Ndii, who attended the University of Nairobi in the mid-80s and was similarly arrested and detained on suspicion of being involved in subversive activities. As the head of the coalition’s technical team, Ndii was seen as the father of Odinga’s political manifesto. Alongside his fellow University of Nairobi detainee Oduor Ongwen, he served as a member of the committee charged with organising the Peoples Assembly, which culminated in the January 30th oath. It is noteworthy that as lawyer Miguna Miguna defiantly administered the oath to Odinga, Ndii was standing right behind the tall bespectacled lawyer, witnessing part of the maturation of his intellectual labour.

On Tuesday, February 6th, the day Miguna Miguna was dramatically deported, the government issued a directive suspending Ndii’s passport. Ndii had earlier been arrested on the night of December 3rd, 2017, while on holiday with his family at the Kenyan coast. He was driven overnight to Nairobi and accused of incitement. Ndii had continuously articulated the idea of splitting Kenya into different republics if co-existence within the country’s current borders became untenable due to electoral fraud and unequal development, a view espoused by Odinga’s radical supporters. By close of business that Tuesday, the names of senior opposition figures on the list for passport revocations extended to 15, including that of James Orengo, who got stopped from leaving the country on Monday, February 19th, and spent the night at the airport alongside the opposition’s financier, Jimmy Wanjigi, before the judiciary issued orders against their illegal restriction.

The journey to this point where radical activists and intellectuals took centrestage in Kenya’s push for a proper democratic dispensation – the third liberation, as its proponents called it – started taking shape back in the late 80s and early 90s during the agitation for multiparty democracy, when the group coalesced around Odinga’s ageing father and deity of Kenyan opposition politics, Jaramogi Oginga Odinga. The senior Odinga pushed for an alternative politics following his fallout with his independence struggle comrade and Kenya’s first president, Jomo Kenyatta. Some have viewed the Raila Odinga–Uhuru Kenyatta contest as a continuum of the duel between their respective father’s divergent visions for Kenya, the older Odinga seeking an egalitarian, left-leaning state while the older Kenyatta a conservative, capitalist one.

Among those working closely with the senior Odinga at the time were former University of Nairobi lecturer Prof. Anyang Nyong’o (father to Hollywood actor Lupita Nyong’o, who was born in Mexico where the family was exiled) who later became a confidant of the younger Odinga. Also present was the current United Nations Conference on Trade and Development Secretary General Dr. Mukhisa Kituyi, who had been expelled from the University of Nairobi in the 80s and sought refuge at Makerere University in Uganda, before proceeding to Norway.

Some have viewed the Raila Odinga–Uhuru Kenyatta contest as a continuum of the duel between their respective father’s divergent visions for Kenya, the older Odinga seeking an egalitarian, left-leaning state while the older Kenyatta a conservative, capitalist one.

When Odinga’s father died in 1994 after failing to clinch the presidency during the 1992 general election, a split emerged between him and these intellectuals, which resulted in Odinga parting ways with the likes of Nyong’o, Kituyi, and the man who stood on his left as he took the oath on January 30th, lawyer James Orengo. During the burial of Mr. Odinga’s father, and in the presence of the then sitting President Daniel arap Moi, Orengo, in representing the youthful radicals, read a hard-hitting speech titled “Woe Unto You” targeted at the authoritarian head of state. There were murmurs of Orengo’s impending arrest after the funeral. Consensus was building that the fiery lawyer should inherit the senior Odinga’s political constituency, given that he had been nicknamed the senior Odinga’s first-born son.

After the dust had settled following the split, Nyong’o and the likes of Ndii coalesced around the left-leaning Social Democratic Party (SDP). The group was further strengthened by the coming on board of Prof. Nyong’o’s University of Nairobi political science contemporary, Apollo Njonjo. Later, the 1984 SONU chairman and political prisoner Mwandawiro Mghanga – who remains the leader of the Marxist-Leninist party to date, and is credited with spreading Marxism to political prisoners during their stints in detention in the 80s – joined the party. Orengo unsuccessfully contested for the Kenyan presidency under the party’s banner in 2002, protesting Odinga’s unilateral endorsement of the lukewarm Mwai Kibaki, who won the vote and turned against Odinga, leading to their bloody 2007 electoral contest.

From the early 90s, when they operated under his father, there had been a shared feeling within the University of Nairobi grouping that the younger Odinga either lacked the ideological grounding and clarity to lead them, or that his intellectual firepower was not up to par with the kind of leader they desired. But in the end, Odinga’s charisma, scheming and ability for mass mobilisation outshined everyone else’s, making him the closest the radicals could have to an ally with a real shot at Kenya’s presidency.

Much as he was Kenya’s longest detained political prisoner, Odinga made huge political compromises to get ahead, including merging his party in 2002 with that of Daniel arap Moi, the authoritarian who had jailed him and his colleagues. In the end, it is these alliances built for political expediency that saw Odinga appointed into cabinet for the first time, where many believe he expanded his business interests and accumulated substantial financial muscle to sustain his future political activities.

As he and his colleagues challenged Uhuru Kenyatta’s legitimacy, Odinga rode in bullet-proof SUVs with chase cars and armed security – this after the state declined to provide him with security and similar benefits that he is entitled to as a former prime minister due to his continued political agitations. He similarly ran a multilayered political machine headquartered in various Nairobi suburbs. This elaborate logistical infrastructure, coupled with Odinga’s fanatical following, contributed in setting him apart as the undisputed leader of the University of Nairobi grouping, himself having lectured at the institution’s Department of Engineering in the early 70s.

From the early 90s, when they operated under his father, there had been a shared feeling within the University of Nairobi grouping that the younger Odinga either lacked the ideological grounding and clarity to lead them, or that his intellectual firepower was not up to par with the kind of leader they desired.

In Odinga the radicals found a politically viable candidate around whom to erect an ideological scaffolding that could have seen them realise the dream of a radically progressive state. On the other hand, Odinga found himself in a position where he was not the most radical person in the room, a state of affairs that afforded him ideological sustenance.

On February 4th, during an opposition rally in Nairobi, Babu Owino, a youthful Nairobi MP who served as SONU president for four controversial consecutive terms since 2011, assumed his role as trash-talker-in-chief within Odinga’s party. Previously arrested for referring to Uhuru Kenyatta as a ‘‘child of a dog’’, the first-time MP requested Odinga to appoint him minister for interior once he formed “the people’s government” so that Babu could arrest Kenyatta’s security minister, who had been leading the onslaught against the opposition. Having single-handedly coined the captivating – if nonsensical – slogans used during Odinga’s presidential campaign rallies, the populist MP warned – to huge applause as is always the case whenever he speaks – that if more opposition leaders were targeted and arrested, then there would be smoke everywhere in Nairobi, hinting at violent protest action. The resounding message from the rally and subsequent ones was that the opposition would not take the state’s excesses lying down.

Then, on Friday March 9th, news broke indicating that Odinga and Kenyatta were having a meeting at the president’s office. When the two men emerged from the meeting, smiling and calling each other “my brother” – before staging the mandatory ceremonial handshake and brotherly public embrace to mark a cessation of hostilities between them – Kenya was thrown into a spin. The tens of protestors who had been shot dead by Kenyatta’s regime as they protested in support of Odinga – including a toddler and a nine-year-old – all seemed to have vanished into thin air, and all the claims by Odinga that Kenyatta was an illegitimate president seemed instantly buried. There appeared to be a new-found camaraderie between the son of Kenya’s first president and the son of Kenya’s first vice president; now the Kenyan masses were expected to fall in line and fully support the two leaders’ calls for national unity.

Neither Odinga nor Kenyatta had involved key leaders from their respective political parties in the talks, and only the two men, their very close functionaries and family members seemed to be in the know. No one in the media or political sphere had foreseen the meeting, and no one knew what to make of it. Anyone questioning the elite pact between the two families with a love-hate relationship was quickly shouted down by supporters of the two leaders.

However, as Odinga’s die-hard supporters bought into the handshake, questions abound as to what the meeting portends for the Comrades, who were not viewed as Odinga’s sycophants but as vanguards of a people’s revolution. Would they, in the words of South African poet Dennis Brutus, consider Odinga’s move to close ranks with Kenyatta to be a betrayal of the liberation aspirations of Kenyans to whom they sold a reformist political project, or would they join Odinga in reaching an elite pact with Kenyatta, who they previously called a despot?

Asked differently, could the Comrades break away from the man who provided them a political home and a real shot at taking over the state as its new ideological architects, or have they run out of time and steam to engineer a new revolt either within or outside Odinga’s party? Will they now have to work with whatever Raila Odinga and Uhuru Kenyatta hand them?

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Isaac Otidi Amuke is a Kenyan writer and journalist.

Politics

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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