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DREAMS OF EMPIRE: Stepping out of America’s Fading Lustre

As Donald Trump surrenders America’s global preeminence, Africans – at home and in the diaspora – should work to build an African superpower rather than succumb to Chinese colonization. By MKAWASI MCHARO HALL

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DREAMS OF EMPIRE: Stepping out of America’s Fading Lustre
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The first African Diaspora Young Leaders summit was coming to a close in Washington DC. The State Department had sent me an invitation to the closing dinner. RSVP for one, I wrote back. State Department dinners are often a microcosm of the global political structure, and schmoozing around with the diplomatic corps is like listening to the whispers of countries bottled up in one room.

Sometimes you catch the ambitious Washington-based African ambassador gunning for the presidency in his or her country, but I’m yet to catch one with a big idea for a United States of Africa. Most of the African envoys do not want to stay in America once their tour of duty is done. They are not economic refugees and their dreams are made. I want to find out from the room filled with ambitious African youth if they want to stay on and catch the American dream. They are also looking to lead the continent in conquering an uncertain 21st century and the US might just be a launching pad.

I asked as many as I could, and without hesitation they all quipped a version of, “I’m going back home of course!” I qualified my question further and asked, “If you got an offer for a job or graduate studies here, would you stay?” One tall Malian fellow hesitated and shook his head in a circular manner. That was the extent of his commitment to pursuing the American dream. He did not care for pecan pie either. These are not singular-story instances meant to create a bias. America has lost its lustre even among young Africans.

In a short while, this realisation would be ascertained by none other than the Under Secretary of State for African Affairs. He stood up to speak and asked the young Africans to speak well of America when they got back to their countries; that America is not as bad as they show it on television. I almost keeled right off my playing-diplomat-for-a-night seat. When did the script change so drastically? It’s no longer Africa asking America to stop spreading the unsavoury story about a dark continent. Now an American top-ranking diplomat is trying to right the image of a superpower that’s suffering an ugly meltdown and the whole world has a front row seat.

In spite of America’s fading lustre, there is still a growing African diaspora in the United States, and they will in a few decades be part of the “people-of-color” majority in the United States. For the American-Africans or Continental Africans who have become citizens, this is their home, one that enables them to play out their transnational citizenship as successfully as other diasporas before them have. An understanding of Continental Africans’ positioning along the timeline of American empire-making is important. It should help get Africans becoming more proactive in establishing an influential presence in American politics and policy-making, and also in pushing Africans to conquer their own continent for themselves.

A savage inspiration

Empire rises through stages: Conquest of territory; elimination or assimilation of indigenous peoples; and the building of new and more efficient trade routes. Those who lead conquests embody the animus dominandi, a necessary force of evil in the usurpation of power, wealth and security.

The end goal in a humane conquest, if the oxymoron can be believed, is the establishment of peaceful coexistence with those conquered, or the removal of oppressive leadership from the land invaded. In modern history, only one humane conquest comes to mind: Tanzania’s invasion of Uganda in 1979 to dislodge the brutal regime of Idi Amin. It lasted all of five months. America’s preemptive invasion of Iraq post-9/11 was sold to the people as a remedy that mirrored Mwalimu Julius Nyerere’s Uganda invasion: to free the people of Iraq from Saddam Hussein’s oppressive rule. But it soon became clear it was a greed-driven opportunity for war profiteering and expansion of the American corporate empire that had become a monstrosity.

Empire rises through stages: Conquest of territory; elimination or assimilation of indigenous peoples; and the building of new and more efficient trade routes. Those who lead conquests embody the animus dominandi, a necessary force of evil in the usurpation of power, wealth and security.

There are many wars that America has fueled to maintain its interests and footprint in foreign soil. It wasn’t always like that. America grew out of European immigrants who were running away from persecution, famine, and war in their own lands. They came to America seeking fortune and new beginnings, and they formed a country that rejected monarchy and its extreme powers. America was the biggest and boldest experiment in democracy and freedoms that attracted people from all over the globe. This roaring inspiration was also ruthless as European immigrants who became white Americans held millions of Africans in bondage and massacred millions within indigenous nations, with the survivors confined to reservations. Vicious greed easily becomes a reality in empire-building.

Eventually, a civil war that killed over 600,000 Americans brought an end to slavery. This is a price they had to pay for the dream of a truly free nation whose citizens were all considered as created equal and endowed with the same inalienable rights. It took bold and selfless political leadership to apply this principle of freedom to enslaved persons. President Abraham Lincoln’s emancipation proclamation in 1863 was met with disdain and dismissal from his friends and enemies alike. It ranked poorly as a political move.

Lincoln was driven by his own conscience and the American Constitution, a document that captures the ideals of a people, written with the ink of human kindness. It is also a document that has made America the “home of the free and land of the brave”. The irony of it all is that America was also built through the savage inspiration of those who stopped at nothing to succeed; immigrants who never gave up, never made excuses, and never let hunger, disease or the ravages of unpredictable Mother Nature stop them.

Dust bowls came and threatened famine, and the new Americans started afresh. The Ireland famine they escaped from was far worse as it had killed over a million. Floods came and carried the homes of new Americans carving a home from scrub in the wild West, and they rebuilt. They had far worse memories of homes shelled with bombs and bullets in war-torn Europe. Religious persecution in Europe brought the Anabaptist Amish to America where they found freedom and thrived in exclusive communities of their own defining. Persecuted Mormons trekked west through harsh territory and built their city on the hill out of a mirage of hope. Diseases came and killed families that moved to nowhere-places in the expanding America, and they picked up their shredded hearts and kept on striving. The Chinese suffered calculated segregation through the Exclusion Act but they found a way to remain an important part of building America throughout the 1800s.

Enter the Africans

How could anyone not feel inspired by a country made up of people who came from every corner of the world and found more ways than one to dream and achieve? Is it any wonder that the American Dream phenomenon took root and became the country’s biggest thought export that kept drawing in the rest of the world? The land where every dream is possible also became the allure for African immigrants from the mid-twentieth century, their numbers spiking from the early 1980s.

New legislation broke the Europeans-only influx into America and allowed more Africans to become part of America’s citizenry. A place of great contradictions: on one extreme, African descendants were enslaved for two-and-a-half centuries, and on the other extreme, free and educated Continental Africans were provided a way in through the Immigration and Nationality Act of 1965.

Empire and smart nation-building knows that human capital is key in its expansion and stability. From the Roman Empire that had earlier been the cradle of modern democracy to the United States of America, citizenship held the highest value for the inhabitants. It gave them the power to vote, to gain access to economic opportunities, to hold office, and to move freely.

New legislation broke the Europeans-only influx into America and allowed more Africans to become part of America’s citizenry. A place of great contradictions: on one extreme, African descendants were enslaved for two-and-a-half centuries, and on the other extreme, free and educated Continental Africans were provided a way in through the Immigration and Nationality Act of 1965.

Stages to citizenship become goals that an immigrant works very hard to achieve. In a land where the biggest pull factor is the American Dream, achieving that dream becomes a calculated get for African immigrants so that tales of their personal conquest will vindicate their desertion of home. When Europeans set out for the United States on boats and scraps of boot, many died out of pride, refusing to return to homes that still had their arms open wide for them in case things did not work out. The shame of not achieving that dream would be too much to bear. They would die in the gold rush melee, in the coal mines, in the cowboy ventures, in the farmers’ fight against nature, and in the run-in with Native Americans fighting to hold on to their lands.

Africans who come to the United States are no different from those first immigrants. Much as most come with a mind to acquire their education, a slice of the American Dream, and promptly go back to beloved Africa, they discover that the road to achieving what they came for is entangled in legislation and privilege. They are outsiders standing in a long line of immigrants waiting to get in to the gates of a new belonging.

Becoming American for an African is very rarely a personal goal but a necessity acquired to assist with personal conquest. Africans do not carry the pride of nation as Americans do. My neighbours, like many Americans, fly the US flag every public holiday and any other odd day. I have recently purchased a Kenyan and a US flag that I will fly on my front porch to test out the feel of nationalism. In Kenya, I would not be allowed to fly my Kenyan flag. However, in a changing America, pro-Trump neighbours will also look at my Kenyan flag askance as it will indicate an unwelcome immigrant presence.

As the latecomers in the game of American belonging, there isn’t much out there on African immigration statistics. Shaw-Taylor and Tuch (2007) surmise that about a million Africans immigrated to the United States between 1965 and 2007. These records are usually far below the real numbers as many who come and stay do not participate in the census. Second generation Continental Africans have also increased significantly. The Nigerian diaspora has become one of the fastest growing, both in numbers and in economic success. A Bloomberg research bursts the myth that Asians are the only ones at the top of the intellectual wealth pyramid.

The Kenyan diaspora, meanwhile, continues to astonish as its remittances to Kenya grow to a whopping Sh197 billion (nearly US$2 billion) this year, up from Sh174 billion (about US$ 1.8 billion) last year. The tragedy of the Kenyan diaspora, at least those in the US, remains their insistence on staying cocooned in cliques and tribal mindsets while abroad, an attitude that makes them ineffective pawns in America. A long straw extends from the mouths of family and community in Kenya and dips into diaspora pockets, and each year, the gulp gets bigger, thanks to the powerless generosity of a splintered diaspora. With all their smarts, Kenyans in the US have refused to invest in the strategy of building a united front as a power bloc, and so their remittances remain untapped influence. Eight years after the constitutional enshrining of their right to vote, the Kenyan diaspora in the US still cannot vote back home.

The Kenyan diaspora, meanwhile, continues to astonish as its remittances to Kenya grow to a whopping Sh197 billion (nearly US$2 billion) this year, up from Sh174 billion (about US$ 1.8 billion) last year. The tragedy of the Kenyan diaspora, at least those in the US, remains their insistence on staying cocooned in cliques and tribal mindsets while abroad, an attitude that makes them ineffective pawns in America.

No immigrant community has ever achieved influence without the strategic politics of mobilisation and organisation in their adopted country. Kenyans are adept at splitting their power by dismissing each other’s efforts. They duplicate, triplicate and quadruplicate initiatives instead of supporting what is on the ground. The new entrants to a cause will dismiss others as failures and with great humility argue that they are the ones who will make it happen. The community politics of the Kenyan diaspora is not only a microcosm of Kenyan society in Kenya but a far darker version of it.

Lessons from how other immigrant communities in the United States conquered in spite of their political or ethnic diversity are yet to sink in for the Kenyans. Collective intelligence is a switch that an initiative-taker turns on, but the bulb will not light up until the people with their hands around it stop the sabotage. (I have played significant roles in the Kenyan community in America long enough to observe its ways, which gives me a measure of authority on the subject.) Perhaps the growing second-generation Kenyan-Americans will shape its power.

Conquest, China and African superpowerdom

If the American republic has risen to superpowerdom through conquering occupied lands, eliminating indigenous peoples, and building infrastructure through the wilderness, all while using stolen labour and the legitimisation of a cruel injustice, why hasn’t the African continent achieved as much in its own continent where its nations are free? Dreams of a Pan-African state have flared up with the staunchest Africanists and died like a kerosene flame, leaving only a smoky trace of it that still lingers.

To build empire, Africa would not need to engage in the cruelty of displacing or enslaving anyone. The Morgenthaunian animus dominandi or necessary evil-nature approach to raising empire has to be redefined if Africa is to use it to achieve superpowerdom. By superpowerdom I do not mean a hunger for domination over others, but a reaching towards the highest levels of self-realisation as Africans. Such realisation comes with technological advancement, an end to poverty, the inalienable right to freely acquire knowledge for its own sake, and definitely the restructuring of political systems and inculcation of integrity in the continent’s democratic processes.

But is Africa interested? The current trend has African countries firmly serving nationalistic self-interest at best, and more of individual strongman interests. A continental trading bloc covering at least fifty African countries has been in the works, but its success is yet to unfold. The assumption that an African economic bloc could set the giant continent off to the 21st century superpowerdom is unlikely; at least not without independent institutions powerful enough to ensure economic accountability and social justice.

The success of America’s rise, savage inspiration that it was, also came from the independent institutions that checked its rogue politics, demanded a righting of wrongs, and allowed for people power. If African is not ready to hold its rogue leaders to account as South Korea recently did by throwing its corrupt president in jail, an economic bloc will only create a deeper chasm between those who can manipulate trade and those too far from the decision-making table.

Africa is a willing victim in the unfolding conquest by the rising Chinese global power, which is carrying out open surgery on the continent. As they open up the innards of Africa and plant Confucius centres in colleges, popularise Mandarin classes, establish television stations to transmit Chinese propaganda, and build breathtaking infrastructure, Africa seems content with the drip of modernisation-on-loan feeding its arteries. There is nothing the Chinese are doing that global powers of the past – Malian, Roman, British, American and others – did not do.

China’s Belt and Road Initiative (BRI) that seeks to etch the most ambitious trade routes across several continents is reminiscent of the Trans-Sahara trade routes that gave superpower status to the kingdom of Mali for a span of seven hundred years – until the Europeans made more efficient trade routes through the Atlantic. It wasn’t until America built the Transcontinental railway that connected it from sea to shining sea that the country actually started its rise to superpower status. Throughout history, control of new and more efficient trade routes have led to the rise of new empires. How is it that free African nations and their rich diasporas cannot build an engineering marvel from Cape to Cairo all by themselves?

The unfolding conquest of Africa is a willing victim eyes-wide-open surgery on the continent by the Chinese rising global power. As they open up the innards of Africa and plant Confucius centres in colleges, popularise Mandarin classes, establish television stations to transmit Chinese propaganda, and build breathtaking infrastructure, Africa seems content with the Chinese drip of modernisation-on-loan feeding its arteries.

White nationalism and the Age of Trump

Trump’s America is a surrender of empire in exchange for white nationalism. Stoking trade wars and supporting white extremism is a calculated recipe for white nationalism. The president has been on an anti-globalisation rampage. He has attacked regional and inter-governmental trade treaties, environmental agreements and military alliances that have kept America at the helm of the current global political structure. The president is in the throes of a ferocious tariff war against China, Canada and European countries, all trading allies of the United States. It has become common to wake up to news about American industries now making significant losses and some shutting down because the targeted countries are no longer buying American products. Farmers and fishermen whose products are exported to China now need a government bailout to survive.

Anti-immigrant policies have restricted temporary work visas that usually bring in seasonal workers from Mexico to work on farms and in the crab industry. As a result, massive fields of unpicked crop have gone to waste and the crab industry has suffered. The same policies have created the parent-child separation debacle in Texas, a racket that turns out to be, no surprise at all, a profiteering racket. While the world reels in shock at how low America has sunk, the detention business continues to thrive as it nets in new clients in immigrants seeking asylum. The GEO Group that runs private prisons also happens to be the biggest contractor for the U.S. Immigration and Customs Enforcement (ICE). The company is also accused of sponsoring politicians in Texas, the same state where unconscionable detention of children is happening.

In all this, good old American activism stays fired up and keeps agitating its way to justice. A company as powerful as the GEO Group now feels threatened by the Dream Defenders Action who have exposed them. A strategic and sustained fist pumped in the air has proven a formidable weapon against massive corruption in a country as powerful as America.

As the Mexican border immigration wars rage, some African immigrants who never thought themselves unsafe now find themselves targets of the government’s ransacking of those who supposedly cheated in their citizenship interviews. The U.S. Citizenship and Immigration Services is on record explaining the task to de-naturalise “errant” Americans who took up citizenship since 1990. That is the decade the numbers of Africans in America started rising significantly.

It is well-known that Trump has an issue with Nigerians, an identifier he uses to mean Africans. And he’s not alone in calling all Africans Nigerians. Perhaps it is the rising power of Nigerians in America that feels too threatening. The whitening of America in the Trump era is real. The immigration witch-hunts conjure up histories that led to some of the worst human atrocities in places like Nazi Germany where unwanted groups of people who had started thriving were exterminated.

While this remains an interesting time in America, perhaps the incredulous nature of it drives one to the conclusion that it is all in futility. The numbers will sort it all out. Unless white people increase their population at an astronomical rate in the next few decades, America is destined to become a country of majority “people of colour”, for lack of a better term. It is a scary thought that stoked the flames of white nationalism in Britain, leading to Brexit, and now in the United States. Human civility is superficial. Once threatened with the possibility of extinction, conquest or minority status, the human becomes the brute in a jungle where all civility disappears.

While this remains an interesting time in America, perhaps the incredulous nature of it drives one to the conclusion that it is all in futility. The numbers will sort it all out. Unless white people increase their population at an astronomical rate in the next few decades, America is destined to become a country of majority “people of colour”, for lack of a better term.

Only communities that have lived in close connection to the earth will tend to have a greater sense of civility and welcome for the stranger, conquering only to ensure their own survival, but not to fuel uncontrollable greed. America is a corporate empire built upon unexpiated savagery, and like all empires, it will come to its end.

An ode to indigenous peoples

Sitting Bull. Crazy Horse. Little Wolf. Spotted Tail. Red Cloud…the list is long. These Native American warriors who defended the usurpation of their land with fierce skill and legendary valour will inspire for ages. Their defeat will also depress the human spirit that cheers on the emancipation of the conquered. Victories of Native American nations against American expansion are filled with breathtaking courage. The Lakota, the Nez Perce, Cherokee, Navajo, Sioux, and many of the almost 600 indigenous nations held their ground against an army with numbers, resources and technology they could not match. As with most peoples who get conquered, the lack of a united front plays into their defeat.

A story is told in the annals of history that Sitting Bull once had a dream that his Lakota people of Standing Rock would vanquish the approaching American army led by the feared General Custer who had never lost a battle. On this day, Sitting Bull and his vastly outnumbered Lakota warriors prepared to fight yet again. His dream came true, and to America’s shock, the inconquerable Custer was killed and his army decimated at the famed battle of Little Bighorn.

But it wasn’t the dreams of one who prayed to the Great Spirit that won the battle; it was the ferocious zeal to survive when faced with extinction. It was the same zeal that led Shaka Zulu to victory against a British army with superior weaponry at the battle of Isandlwana; the same Ethiopian dare that trounced the invading Italians at the battle of Adoa; the same fire that led to the Mau Mau uprising against Empire in Kenya.

It is the same fire of indigenous African peoples that need instruction to rise and conquer a continent they already occupy, lands that already belong to them, resources that are theirs to exploit. The unfolding development in Africa is the footprint of another encroaching superpower. Africa should not surrender to a second colonisation so soon.

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Ms Hall is a freelance writer based in the USA

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

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

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

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

History of the local economy

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

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

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

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

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

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

The culture of policing in Mathare

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

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

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

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

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

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

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

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

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

Local dynamics and the future of chang’aa

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

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

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

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

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

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Liberty for Whom? D-Day’s African Ghosts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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