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Striking a Balance Between Judicial Immunity, Independence and Accountability: The Kenyan Situation

There is a need to re-engineer these parameters of the Judiciary to strike a functional balance between immunity, independence, impartiality and accountability of members of the bench for Kenya to enjoy a trued independent Judiciary.

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Striking a Balance Between Judicial Immunity, Independence and Accountability: The Kenyan Situation
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Kenya’s Supreme Court is in the eye of a storm. Four members of the apex court face allegations of bribery and impropriety. The Chief Justice himself faces a petition. The Deputy Chief Justice faces the prospect of criminal charges if an ongoing constitutional case is determined against her. One of the Supreme Court judges has declined to appear before the Judicial Service Commission (JSC), citing constitutional immunity.

Lower down the rung, a judge of the High Court who was found unfit has challenged the decision. His appeal has, however, been dismissed by the Supreme Court. Several other High Court judges could face tribunals depending on the findings of the committees set up to investigate the complaints against them. Some of the complaints may turn out to be not worthy of the formation of a tribunal. However, the fact that there are so many complaints against members of the Supreme Court erodes the confidence that should be attached to the apex court, and by extension, to the whole Judiciary.

It is said that when Julius Caeser’s wife, Pompeia, allowed a man dressed as a woman into a Roman religious festival strictly reserved for women, Caeser divorced her. The whole thing had been a prank and Pompeia had no intentions of impropriety. Aware of this, the citizens of Rome enquired why Caeser had divorced his wife. “The wife of Caeser must be above suspicion,” was the Great Emperor’s response. Hence the comparison with the level of integrity expected of a judge.

Perception plays an important role in the discharge of justice. Some 118 years ago, Lord Charles Bowen, while setting aside the ruling of the Lord Chief Justice who had determined an appeal in a case involving his own brother’s architectural firm, said, “Like Caeser’s wife, a judge must be beyond suspicion.”

Now one may ask where Caeser’s wife fits in all this? What does Caeser’s wife have to do with the integrity of a judge?

It is said that when Julius Caeser’s wife, Pompeia, allowed a man dressed as a woman into a Roman religious festival strictly reserved for women, Caeser divorced her. The whole thing had been a prank and Pompeia had no intentions of impropriety. Aware of this, the citizens of Rome enquired why Caeser had divorced his wife. “The wife of Caeser must be above suspicion,” was the Great Emperor’s response. Hence the comparison with the level of integrity expected of a judge.

A transparent, reliable and accountable Judiciary is vital in the furtherance of the rule of law, which is fundamental to constitutionalism and democracy. It cannot be gainsaid that right from the recruitment, functioning, supervision, to the removal of judicial officers, the process must be rigorous, transparent, accountable and free from influence. To properly carry out their mandate, judicial officers must be insulated from victimisation arising from the discharge of their judicial functions. Conversely, they must conduct themselves with the propriety expected from those entrusted with great power.

Justice before 2010

Prior to the enactment of the 2010 constitution, the appointment of the Chief Justice was the sole prerogative of the president. He was also the appointing authority in the appointment of judges, the only rider being that with such appointments, he was to act in accordance with the advice of the Judicial Service Commission (JSC).

An examination of the composition the JSC, however, clearly showed that the president held sway in such appointments. Composed of the Chief Justice, the Attorney General, two judges appointed by the president and the chair of the Public Service Commission, all members of the JSC were direct or indirect appointees of the president and, therefore, beholden to him.

Another contract judge, Patrick O’Connor, was sacked by the Chief Justice when he resisted a transfer to Meru. When O’Connor questioned whether the Chief Justice had the powers to sack him, he was criticised by the political class. Not long after, in 1988, Parliament amended the constitution to remove the security of tenure of judges.

Then there were the “contract judges”, who were mostly British citizens. Their contracts were renewable at the government’s discretion. Some of these judges were so beholden to the Executive that, in one instance, the by then Chief Justice, Alan Robin Hancox, in 1991 went as far as advising members of the bar and bench that their loyalty was to the head of state.

Another contract judge, Norbury Dugdale, found himself in conflict with lawyers and members of the Law Society of Kenya (LSK) due to the consistency of his decisions in favour of the Executive. Supporting an earlier call by nine members of the LSK in 1991 to have a tribunal established for the removal of Chief Justice Hancox and Justice Dugdale in September of that year, 107 lawyers signed a memorandum calling for the resignation of the two. (The Weekly Review Sep 6, 1991, page 4.)

Not all of the contract judges acted as gatekeepers for the Executive. Not all of them were malleable to the whims of the head of state. The fierce independence of Justice Derek Schofield, a contract judge, comes to mind. In 1978, a family filed a writ of habeas corpus seeking the production of their family member, Mbaraka Karanja. When Justice Schofield ordered the production of Karanja, the police said that he had been shot while escaping and had been buried. The judge then insisted the body be exhumed. Even after the opening of 19 graves, there was still no body of Karanja. Justice Schofield then threatened the Director of Criminal Investigation with contempt, prompting Chief Justice Cecil Miller to remove the case from the judge and to transfer him to Meru. Justice Schofield chose to resign than put up with this blatant interference. He would later say that the Chief Justice had informed him that his actions had been at the behest of President Moi. (Nairobi Law Monthly 49. Feb/Mar, 1992, and also Nation newspaper, 11 October 2008, interview with Okwemba.)

Another contract judge, Patrick O’Connor, was sacked by the Chief Justice when he resisted a transfer to Meru. When O’Connor questioned whether the Chief Justice had the powers to sack him, he was criticised by the political class. Not long after, in 1988, Parliament amended the constitution to remove the security of tenure of judges. ( Weekly Review, 5 August 1988, page 3.)

At the lower tier of the judiciary were the magistrates. Greater in number than the judges, and considered the true face of the Judiciary, they worked in far-flung stations. The JSC exercised complete control over their appointment. The law afforded them nothing in terms of security of tenure and they could be sacked at any time through mechanisms that were not transparent.

They worked alongside police prosecutors. Often considered enforcers for the Executive, their courts acted arbitrarily with little regard for the law or procedure. The extent of their emasculation by the Executive was at its most obvious during the Mwakenya trials. Scores of intellectuals, students, politicians and ordinary wananchi were arrested, tortured and charged with belonging to proscribed groups. The accused persons were “tried” and convicted in the magistrate’s courts, outside court hours, usually in the evenings without the benefit of counsel. (See KNHRC 2009 publication “Surviving after Torture”, pages 41-42.) One of the accusations against the twelfth Chief Justice, Benard Chunga, in 2003 when a tribunal for his removal was constituted, was that during his tenure as the Deputy Public Prosecutor, he had condoned and executed programmes of torture and illegal trials in the magistrate’s courts.

Executive interference was not the only factor that influenced the decisions of judicial officers. Far from it. In many cases, it was corruption that subverted the course of justice. So rooted was this vice that the popular saying, “Why hire a lawyer when you can buy a judge?” was an accurate depiction of the state of corruption in the Judiciary. The corridors of “justice” had become a marketplace where the highest bidder carried the day.

Magistrates who displayed independence were punished. A case in point was in 1994 when Senior Principal Magistrate, Onesmus Githinji; while acquitting six accused persons (famously known as the Ndeiya Six) charged with breaking into a chief’s camp, censured the police and ordered an investigation over allegations of torture. Soon after, he was transferred to a remote court in Kitui, which prompted him to resign.

Executive interference was not the only factor that influenced the decisions of judicial officers. Far from it. In many cases, it was corruption that subverted the course of justice. So rooted was this vice that the popular saying, “Why hire a lawyer when you can buy a judge?” was an accurate depiction of the state of corruption in the Judiciary. The corridors of “justice” had become a marketplace where the highest bidder carried the day.

The impunity with which some judicial officers conducted their affairs was in some instances almost hilarious. In Kisumu, an advocate obtained a photograph of a judge being transported in a vehicle that the same judge had irregularly allowed an auctioneer to attach and sell. When the advocate confronted the judge with this evidence and asked that he disqualify himself from the still ongoing proceedings, he declined. (The same judge would resign rather than face a tribunal during the 2003 “radical surgery” of the Judiciary initiated during the Mwai Kibaki administration.) In Nairobi, a magistrate was found with two sets of written judgments for the same case, one acquitting the accused, the other convicting him. His reason for this embarrassing situation was anyone’s guess.

In remote stations, magistrates were a law unto themselves. Feared by a populace that had long accepted corruption as a way of the courts, they went about their sordid business without a care in the world.

The Radical Surgery

By the time the country was going to the 2002 polls, it was plain to see that it was just a matter of time before some serious intervention was made to try and salvage a Judiciary gone rogue. And come it did in the form of what came to be known as the Radical Surgery.

With the defeat of KANU in the 2002 presidential elections and the ascendance of Mwai Kibaki to power, the stage was set for a radical intervention. An Anti-Corruption Committee chaired by Justice Aron Ringera was promptly constituted to investigate corruption in the Judiciary. Upon completing its work, it tabled a report that chronicled instances ranging from judicial officers receiving money to influence decisions to the seeking of sexual favours to make favourable decisions. It implicated 5 of the 9 Court of Appeal judges, 18 of the 36 High Court judges and 82 of the 254 magistrates country-wide.

This radical crackdown had unmasked powerful men and women, who hitherto, like Caeser’s wife, had been considered above suspicion. Pictures of Court of Appeal judges outside what is now the Supreme Court being helped by family members to load personal belongings into the boots of cars was a reflection of the magnitude of what had transpired.

In a brazen, and most would say unfair, move, the names of the implicated judicial officers were published in the national press even before they were informed of the accusations against them. This was followed by a withdrawal of their benefits and privileges. (These were to be reinstated many months later.) A two-week ultimatum to resign or be dismissed was issued to them. Many opted for the former. Some of the judges decided to face the tribunals. Justices Waki, Anganyanya, Nambuye, and Mbogoli were some of the judges who were later cleared and resumed their duties as judges.

This radical crackdown had unmasked powerful men and women, who hitherto, like Caeser’s wife, had been considered above suspicion. Pictures of Court of Appeal judges outside what is now the Supreme Court being helped by family members to load personal belongings into the boots of cars was a reflection of the magnitude of what had transpired. Men, once the face of justice, were struggling to put as much distance as possible between themselves and the corridors of justice.

Years of corruption and impunity within the Judiciary had eroded public confidence. This now ensured that there was little sympathy for these victims of the purge. It was the reason why there was little protest, despite the process of their removal being unfair and unjust. Even when the President, in an unorthodox move, used his authority to appoint 28 acting judges of the High Court to replace the fired ones, there was hardly any opposition.

The President’s move was irregular. The new acting judges had not been subjected to scrutiny. Many believed their appointment was influenced by political, tribal and other considerations, rather than merit. The process was flawed. Consequently, an opportunity to effectively clean up the Aegean stables that our Judiciary had become was lost.             

In 2003, Evan Gicheru replaced Benard Chunga as the thirteenth Chief Justice of independent Kenya. An embattled Chunga had opted to resign rather than face a tribunal made up of men he had on many occasions crossed swords with, and whose opinion of him could only be negative.

Business as usual

The Radical Surgery having gobbled up a sizeable chunk of the old faces in the judiciary. Many naively expected a reduction in instances of executive interference and corruption and consequently a marked improvement in the delivery of justice. This was not to be and for obvious reasons.

Firstly, the manner in which the Radical Surgery had been carried out, with little regard for the internationally accepted standards for the removal of judges, greatly eroded morale in the Judiciary. The appointment of 28 acting judges to replace those removed was also far from transparent. The appointees were beholden to the appointing authority, which was still the President. The constitution still allowed him the sole prerogative in the appointment of the Chief Justice. Little wonder then that in 2007, Chief Justice Evan Gicheru, who owed his appointment solely to President Kibaki, was agreeable to irregularly swearing him in as president at dusk in a private function at State House after a highly contested election. The culmination of this was an eruption of violence that left over a thousand dead and hundreds of thousands displaced.

The other reason why the Judiciary would still be hobbled with the problems of old was that the institutional deficiencies remained in place. While the faces of the judicial officers had to a great extent changed, the structures and working conditions for a long time remained the same. Soon enough it was business as usual.

The greatest opportunity to truly revamp the Kenyan Judiciary came with the promulgation of the new constitution in 2010. For the first time, the appointment of the Chief Justice would not be the sole prerogative of the president. The new constitution provided for an independent Judicial Service Commission (JSC). Save for the Attorney General and a couple of other members, the JSC was to be composed of a representative elected by magistrates, judges of the High Court and the Court of Appeal, and two members elected by the Law Society of Kenya, amongst others; all independent of the Executive. The members of the JSC were to forward their choice for Chief Justice to the President. Their single nominee – subject to the vetting of Parliament – would be appointed to head the Judiciary.

The new constitution also mandated Parliament to provide legislation for the vetting of all judges and magistrates who were in office on the 27th of August 2010. This culminated in the enactment of the Vetting of Judges and Magistrates Act No. 2 of 2011 and consequently the appointment of a vetting board by the President in consultation with the Prime Minister. A seasoned advocate, Sharad Rao, was appointed to chair the board. The decision of the board was not to be the subject of question or review in any court.

The Mutunga Era

In June 2011, Willy Mutunga, a well-known human rights activist, one-time chair of the LSK and a former detainee, was appointed the fourteenth Chief Justice. Everyone agreed that with his appointment, the third arm of government was on the way to great heights. The state of the Judiciary at the time of his appointment was summed up in his speech delivered in October 2011.

The new Chief Justice was considered an outsider – he had not been a member of the Judiciary nor had he practised much as an advocate. So he was bound to meet opposition to his leadership and any proposed reforms. The advantage was that he would not be bound by the cartels that had for a long time taken root in the Judiciary.

“We found an institution so frail in its structures; so thin on resources; so low in confidence; so deficient in integrity; so weak in its public support that to have expected it to deliver justice was to be wildly optimistic. We found a judiciary that was designed to fail.”

The new Chief Justice was alive to the dire state of the Judiciary he had been tasked to head. With only 16 High Court stations and 111 magistrate’s courts around the country, a total of 53 judges and 330 magistrates were expected to cater for a population of over 41 million. Morale amongst the magistrates was low. Considered the backbone of the Judiciary, they handled most of the cases in far-flung courts under appalling conditions, yet their salaries, in comparison with what the judges were paid, was measly. There was a huge case backlog, which was not helped by the constant disappearance of files instigated by litigants and even advocates. Financing was low, with a paltry 0.05 per cent of the national budget set aside for the Judiciary in 2010-2011, compared with the international benchmark of 2.5 per cent. This was the Judiciary that Mutunga inherited from Evan Gicheru.

Upon assuming office, Willy Mutunga realised that there were many reports by civil society and task forces formed by past Chief Justices, the latest being the 2009-2010 report by Justice Ouko that recommended improvements in the functioning of the Judiciary. Using most of this material, his team developed what he called The Judiciary Transformation Framework.

The new Chief Justice was considered an outsider – he had not been a member of the Judiciary nor had he practised much as an advocate. So he was bound to meet opposition to his leadership and any proposed reforms. The advantage was that he would not be bound by the cartels that had for a long time taken root in the Judiciary. The confidence in the new Chief Justice was soon reflected in the substantial increase in funding of the Judiciary. Parliament more than doubled the Judiciary’s budget allocation in 2011-2012. The World Bank, GTZ and UNDP committed funds towards the intended transformation.

Mutunga also sought to give the Judiciary a more human face by doing away with some anachronistic traditions. He allowed for less formal attire and did away with symbols such as wigs. Encouraging interaction between judicial officers and court users, he sought to bridge the distance that had been created under the guise of independence and impartiality. He introduced new innovations, like the Daily Court Returns Template tracking the progress of cases.

Then Petition Number 5 of 2013 happened. It challenged the election of Uhuru Kenyatta as the fourth President of the Republic. On 30th March 2013, in a brief statement delivered in an almost cavalier manner, Chief Justice Mutunga dismissed the presidential election petition. A full judgment followed on 16th April of the same year. Criticised for its lack of depth and failure to confront the evidence, it left a blot in the image of a Judiciary that was still struggling to erase an inglorious past.

The presidential petition aside, more than any other Chief Justice, it was Mutunga who squarely faced the institutional bottlenecks that had long dogged the Judiciary. He undertook structured efforts to solve them. His earlier standing in civil society also helped marshal the finances required to transform the Judiciary. The current robust engagement between court users and the Judiciary, hitherto lacking, can be attributed to Mutunga’s efforts at giving the Judiciary a human face.

Current state of the Judiciary

On the 1st September 2017, the Supreme Court, chaired by Chief Justice David Maraga, nullified the disputed 2017 presidential elections and called for fresh elections within sixty days. While the world wowed, an enraged President called the judges of the Supreme Court “wakora” (crooks). The political class swore to “revisit” the issue. Confidence in the Judiciary soared.

The nullification of a presidential election by the apex court was a clear indicator of how far the Judiciary had moved in terms of independence from the Executive. Such a move would never have been thought of in the times of Hancox or Miller.

Upon realising that the intimidation of judges no longer worked, the Executive now sought to control the appointment process. One clear instance was the Amendments to the Judicial Service Act that sought to have the JSC forward three nominees to the President, instead of one, for position of Chief Justice. The LSK successfully petitioned a constitutional court to declare the amendments to be in breach of the doctrine of separation of powers.

Further pointers of independence from the other arms of government were evident in the fearless abandon with which the High Court continued to strike down legislation sponsored by the Executive as unconstitutional. In 2015, a five-judge bench agreed with the views of Justice Odunga and struck out eight offensive clauses in the controversial Security Law (Amendment) Act No 19 of 2014 as being in violation of fundamental human rights. This prompted much criticism from politicians, with threats against sitting judges.

Upon realising that the intimidation of judges no longer worked, the Executive now sought to control the appointment process. One clear instance was the Amendments to the Judicial Service Act that sought to have the JSC forward three nominees to the President, instead of one, for position of Chief Justice. The LSK successfully petitioned a constitutional court to declare the amendments to be in breach of the doctrine of separation of powers.

The Executive Director of the Kenya Human Rights Commission (KHRC), George Kegoro, in an opinion piece in the Standard newspaper, pointed out other instances of such interference: In one such move the President revoked the membership of two commissioners of the JSC, namely, Rev Samuel Kobia and Kipngetich Bett, while their term had not expired and in disregard of their security of tenure. Another attempt was the insistence on Parliament vetting Justice Warsame, who had been re-elected by the Court of Appeal to the JSC. It took a judgment of the Court of Appeal to scuttle the intended mischief.

The 2016-2017 State of The Judiciary & Administration of Justice Report shows that the number of judges in 2017 had almost tripled to 158 from just 53 in 2011. The number of magistrates had also risen from 330 in 2011 to 421 in 2017. Judiciary funding had almost doubled to 0.99 per cent in 2017. The maximum salary of a judge of the High Court was now slightly over Sh1 million, while that of a Chief Magistarate was over Sh700,000.

With these marked improvements in the numbers and remuneration of judicial officers, why was it that the Transparency International Bribery Index 2017 still considered the Kenyan Judiciary as the second most corrupt institution in the country after the police? Why was there still a perception amongst Kenyans that corruption was still rife in the Judiciary?

The immunity of members of the judiciary from any action or suit for anything done or omitted in good faith, in the lawful performance of a judicial function, is guaranteed in Article 160(5) of the 2010 constitution. Case law also suggests that no action can lie against a judicial officer for anything done within his or her jurisdiction even if done maliciously and in bad faith. (See Anderson -vs-Gorrie [1895] 1QB, 668. A similar position was held by our courts in Bellevue Dev Co Ltd –vs- Justice Francis Gikonyo & 7 others, [2018] eKLR.) What is suggested is that you can never sue a judicial officer for personal liability over anything he does within his jurisdiction even though it is done with malice. It matters not that his decision is so tainted with malice and militates against the evidence to the extent that it can only be attributable to extraneous factors.

Remedy lies in lodging a complaint with the JSC against such a judicial officer, and that’s just about where it ends. Immunity of judicial officers from personal liability for acts while in office, as provided in Article 160(5), suggests that it survives the officer’s tenure. Not even the President of the Republic is offered such immunity. The immunity accorded to a President under Article 143 of the constitution over acts carried out while in office does not extend past his tenure. It also allows for the period of limitation of time for any anticipated action against the President to stop running during his term in office.

It is common knowledge that the complaint process against judicial officers is slow and can remain undetermined for years. One of the reasons is that commissioners of the JSC hold other demanding jobs and enterprises. These men and women only meet occasionally. Judicial officers facing complaints have been known to brag that such complaints will not see the light of day due to the slow process. Others who have been suspended from office as their cases await determination also complain of the slow pace with which their cases are handled. Perhaps the time is right for the implementation of the Sharad Rao-led Judges and Magistrates Vetting Board recommendations of having a permanent Complaints Tribunal to handle such complaints.

The safeguard of immunity, together with the principles of independence and impartiality, are tailored to assist judicial officers to carry out their onerous task of dispensing justice. This has at times been abused. It is not uncommon for an errant judicial officer to shelter behind the iron veil of independence to escape accountability. There is a need to re-engineer these parameters and strike a functional balance between immunity, independence, impartiality and accountability of members of the bench.

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P. Ochieng Ochieng is a writer based in Nairobi, Kenya.

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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