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Customers, Not Patients: The Nairobi Women’s Hospital Saga

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How did a hospital dedicated to women’s health end up being managed like a cut-throat business where those seeking medical attention are treated like customers rather than patients, and where the bottom line is more important than healthcare?

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Customers, Not Patients: The Nairobi Women’s Hospital Saga
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From Nairobi, Dr. Felix Wanjala texts the following on a work Whatsapp group: “Team, let’s ensure we don’t let the team down…let’s meet our target.”

Without context, this might appear like a harmless motivational speech from a boss to his subordinates. But the context here is this: Dr. Wanjala is the CEO of Nairobi Women’s Hospital (NWH). In the message immediately before that, he had forwarded a text listing the admission numbers across all the hospital’s branches in the country. “We have the numbers as follows at this hour,” the CEO wrote to his employees, and then listed admissions totaling 288 across the hospital group.

The target, and the context of the war cry not to let the rest of the team down, he went on, was to have 22 more admissions. To do this, the CEO recommended that his team, based at one of NWH’s two branches in Nakuru (called Nakuru Hyrax), “start with looking for referrals”, not miss “any opportunity”, and be “very vigilant in casualty.

In multiple texts covering different days in 2017 and 2018, the Whatsapp group resembled a trading floor, with Dr. Wanjala and his Chief Operations Officer, Eunice Munyingi, pushing employees to work harder to increase admissions. On the first day of July, for example, Eunice wrote in reply to the nurse in charge of the hospital chain: “Let us increase speed 2 admissions against 13 discharges at this hour not good.”

Two minutes later, the CEO added, “It’s our striking time. Let’s intensify our effort…replace all discharges by 6pm.”

Five days later, at 7:28 p.m., the COO told to the Nakuru branch staff to “get 3 admissions by 9pm.

Several interviews with whistleblowers describe a corporate culture of being pushed to meet admission targets. “Although it was not said explicitly,” one former member of the NWH said, “the implication was that doctors and nurses in particular had to find reasons to admit patients to meet the hourly and daily targets, even if those reasons were an absolute lie.”

Another added that there was a financial reward paid to clinical officers for each admission; but they still had to write down why they were admitting each patient. This meant they had to get creative to meet targets, both personal ones and those of their employer.

Origins

Founded two decades ago by a young gynaecologist called Dr. Sam Thenya, Nairobi Women’s Hospital began with a unique specialisation. The focus of its first branch in Hurlingham was solely obstetrics and gynaecological services, meaning its primary clients were women. It became particularly known for its Gender Violence Recovery Center (GVRC), a charitable arm that serves survivors of sexual and domestic violence.

I was working in a hospital and I had pitched this idea to the CEO of that hospital, but he wasn’t very keen on the idea of taking in abused women for free,” the hospital’s founder told Business Daily in November 2016.

One time he told me that if I thought the idea would work then I should go ahead and open my own hospital because it wasn’t going to work at that hospital and right there I thought to myself, ‘Why not?’”

So at the age of 31, Dr. Sam Thenya took up his boss’s challenge.

The thing that drove him to start the hospital when he had no money, he told the interviewer, was a “certain trigger, madness or passion”. His singular goal, despite the challenges almost as soon as he started, was to build one of the most familiar, respected private hospitals in the capital city.

“Although it was not said explicitly,” one former member of the NWH said, “the implication was that doctors and nurses in particular had to find reasons to admit patients to meet the hourly and daily targets, even if those reasons were an absolute lie.”

For the hospital to survive without taking in more investors or money, it needed to scale up fast, and build solid revenue streams that included donor funding for its GVRC charity. It also had to wade through the rough early 2000s, as Kenyan systems tried to reset themselves.

In 2003, for example, the hospital’s banker, Daima Bank, collapsed. Dr. Thenya, still in the early years of his project, heard the devastating news while he was fuelling his car at a petrol station. “We had just issued suppliers cheques,” he said in the interview.

Despite such and other challenges, Dr. Thenya and the hospital he built surged on.

He transformed from a practising gynaecologist to an entrepreneur. He also sold the hospital for a fortune, and was on his way out as the founding CEO. Although he stayed on after resigning as CEO, his armophous role as Director of Strategy didn’t mean much.

In a scenario that exemplifies the fine line between private healthcare as a business and a service, Dr. Thenya had to fight with politicians, including President Uhuru Kenyatta, and technocrats who had demanded the release of patients (alive or dead) over bills.

Once, he told the interviewer, the President called him and told him someone had sent him an e-mail that the body of his/her mother was being held hostage by NWH over unpaid bills.

Sam, what do we do?” the President asked.

Your Excellency, the bill has to be paid,” Dr. Thenya answered.

After the President said he would pay the bill, and asked the body be released while he did it, Dr. Thenya replied, “I need some proof of payment of some pre-payment today.

If you want me to release it today,” he went on, “then pay today.”

By this point, a lot had changed.

Born in Nyakihai, Murang’a, in 1968, a much younger Sam Thenya had wanted to be a pilot. But he became a doctor instead. As a young doctor in training, he led a strike at Nyeri Provincial General Hospital in the early 1990s. The issue, which was fixed because of the strike, was bad working conditions for medical practitioners.

I am not one who stands by and watches things deteriorate,” he told an interviewer in 2011.

What finally drove him to ask his boss to start a wing for victims of sexual violence, and doing it himself when he was challenged, was meeting the victim of a brutal gang rape. Battered, violated, and in need of urgent medical care, she did not have money to pay for admission.

I paid for her admission and closely monitored her progress.”

The past

As a young doctor, Dr. Sam Thenya was unstoppable in his mission to build Nairobi Women’s Hospital. In October 2000, a hospital called Hurlingham Hospital was on auction for unpaid debts. Dr. Thenya approached the auctioneers with a promise to buy the hospital. It was an attractive deal for both sides: the auctioneers would get rid of an asset few can or want to buy, and the young doctor could build a hospital from scratch.

But there was one problem, a big one. He had no money.

The most he could raise was half a million shillings, which he did by selling his wife’s car. He needed 17 million more, so he got other investors to put in the money and take a share of the repainted hospital’s ownership.

In the world of modern finance, this seemingly brilliant financing strategy has a name. It is called a leveraged buyout (LBO). It works exactly how Dr. Thenya did it: you buy a company by taking in debt and giving up equity, which means you do not need a single coin to start whatever enterprise you want to start. The assets of the thing you are buying, with money that is not yours, serve as the collateral in case the enterprise doesn’t prosper.

The most famous LBO in the world is the hostile takeover of an American company called RJR Nabisco. In 1989, the executives of the conglomerate, which sold tobacco and food products, including the world famous Oreo cookies, started an unstoppable process to acquire the entire company at $75 a share.

The events that followed that ignition are covered in Barbarians at the Gate: The Fall of RJR Nabisco, book (and movie) written by two American journalists. It covers the executives’ plan to buy out other shareholders, and the marathon that began when other groups of people joined in on the race to acquire one of the biggest companies in the world. One of them finally won, by offering a price higher, by $15 a share, than the management team’s offer.

But the best of this story is that none of them, even the executives who wanted to buy a company for $25 billion, actually had the money. They didn’t need to. In the great game of modern finance where money is an idea, one person quoted in the book says, you need more money to start a shoeshine store than you do to buy a 2 billion-dollar company.

The gist is to start what is called, in modern finance, a fundless fund –simply a corporate body that on the one hand promises to and negotiates to buy something, while asking for money from those who have it to complete the deal. For investors with vast amounts of money on hand, this is an investment for which they expect to see profits.

In the world of modern finance, this seemingly brilliant financing strategy has a name. It is called a leveraged buyout (LBO). It works exactly how Dr. Thenya did it: you buy a company by taking in debt and giving up equity, which means you do not need a single coin to start whatever enterprise you want to start.

Dr. Thenya gave up 40 percent of NWH’s ownership to the investors who gave him the $50 million (in total) to buy the assets of Hurlingham Hospital, and to repaint it afresh as Nairobi Women’s Hospital. As the new hospital grew on the back of its reputation as a niche healthcare provider, Dr. Thenya progressively bought out the investors, and by the late 2000s, owned the entire thing.

As they left, presumably after making a profit, Dr. Thenya expanded his enterprise just in time. The 2008 financial crash was wreaking havoc in Western markets, starting first in the mortgage industry and eventually spreading its tentacles to the heart of multiple economies. For private equity funds, which had had their best years right before the crash, it was time to find other markets to play in.

In 2009, Dr. Sam Thenya acquired Masaba Hospital in Adams Arcade, and turned it into the second Nairobi Women’s Hospital branch. By the end of the next decade, there would be a total of nine Nairobi Women’s Hospitals: four in the capital city and the metropolis; two in Nakuru; and one each in Naivasha, Meru, and Mombasa.

From a single hospital in Hurlingham, Nairobi Women’s Hospital was one of the fastest-growing hospital chains in Kenya by the mid-2010s. But things had changed. In the first decade, Dr. Thenya had quit practising to concentrate on the business side of his hospital.

I realised that I was not giving my patients full attention because I was often caught up in strategy meetings,” he said in later years, “[so] I had to choose between expanding the hospital and practising.”

And in several transactions beginning in 2010, he had progressively sold his ownership stake in the hospital to the successor of leveraged buyouts in modern finance; a similar but differently named structure called a private equity fund.

The present

private equity (PE) firm is a leveraged buyout by another name, with very few significant differences. Simply, you get money from wealthy individuals and organisations, such as pension funds and charities, and buy attractive companies. Then you restructure them by cutting costs, expanding as fast as possible, extracting as much revenue as you can, and then selling them for a profit.

The basis of this model of financing is to buy and sell, as opposed to keeping an investment in perpetuity. So PE firms strip their new companies of any sellable assets, change the management, reduce costs by firing professionals and employing cheaper labour, pay executives bonuses for meeting targets, and once the company is attractive enough on paper, sell it to someone else. That new buyer is often just another PE firm.

In the complicated structures of global commerce, private equity funds are used to finance rapid expansion, which increases the value of the assets. Investors, who include funds of funds, where one investment fund invests in another investment fund, expect a return in investment. And investment funds get money by promising exactly that.

PE funds themselves make money in two ways: by charging an annual management fee of the money they have been trusted with, calculated as a percentage, and by taking a cut of the profits they make when they sell the companies they buy. So their primary motivation is to get more investor money, and to restructure companies as fast as possible to attract a higher price than they bought it for.

One of the things PE funds do when they acquire a company is to transition it from a founder-run company into a corporate body that can attract a higher price. This is exactly what happened at Nairobi Women’s Hospital from the first funding round in 2010, where Dr. Sam Thenya’s ownership systematically reduced as the new owners’ ownership stake increased.

In the midst of the “Africa Rising” narrative, and from the ashes of the 2008 global crisis, billionaires and institutional investors in the West turned their investment focus on Africa. The continent’s young population offered an attractive proposition for profit-making ventures; it was expected that not only would these younger Africans be richer than their parents, and willing to spend more on everything, but that there were no modern legal or regulatory structures in place to halt corporate raids of existing companies. And by the time they came, several rounds of investors would have already made enough profits.

In 2010, Dr. Sam Thenya got $2.66 million for part of his stake in the hospital. The buyer, The Abraaj Group, which would collapse in 2018 amidst investigations that its founder and executives had stolen investor funds, was founded by a Pakistani based in Dubai. In addition to Nairobi Women’s Hospital, it also acquired all or parts of other Kenyan companies: Java House (100%); Brookside Dairy (10%); and Seven Sea Technology (21%).

But its most prominent purchases were in private healthcare, where it bought 18 clinics and 10 major hospitals. In addition to its stake in Nairobi Women’s, it also bought part of Avenue Group Hospital, Ladnan Hospital, and Metropolitan Hospital.

Three years later, Abraaj bought more of Nairobi Women’s with a partner PE firm called Swedfund. The Swedish government describes Swedfund, which it funds and owns, as a “development financier and development cooperation actor”; but it works in basically the same way privately-owned PE firms do.

The objective of the Africa Health Fund is to increase access to affordable and quality health-related goods and services for those at the bottom of the income pyramid,” Swedfund said in a press release dated 22nd November 2013. “At the same time it hopes to provide investors with good long term financial returns.

This dual-purpose fit into Dr. Thenya’s founding principles, which had been to build a hospital that offered services to abused women for free, while offering other medical and surgical services at a fee. Swedfund, which said it “put a high emphasis on environmental, social and governance issues”, and other investors were investing in the hospital to fund its expansion.

In 2010, Dr. Sam Thenya got $2.66 million for part of his stake in the hospital. The buyer, The Abraaj Group, which would collapse in 2018 amidst investigations that its founder and executives had stolen investor funds, was founded by a Pakistani based in Dubai.

From a single branch, Nairobi Women’s Hospital had expanded to three hospitals: one in Adams Arcade founded in 2009, another in Ongata Rongai founded in 2011, and the Nakuru branch which followed a year later. It also had two medical centers in Kitengela and Eastleigh, both opened in 2012, and two more branches, in Mombasa and Kisumu, on the way.

This was all, the Swedish state investor said, “part of a the grand plan to expand further in the country and the Eastern African region by 2016; and subsequently into the rest of Africa.”

The thoroughfare

While the source of Swedfund’s finances is obvious, the source of The Abraaj Group’s funds is a more interesting story because it led to its death in 2018, and the arrest of its top executives.

Because PE funds run multiple projects at any one time, they structure them as independent funds with their own fund managers. The specific one that invested in private healthcare in Kenya beginning in the late 2000s was called The Abraaj Growth Markets Health (Africa) Fund. It got its $1 billion to invest in Kenya and other countries from multiple sources, the most prominent being the Bill & Melinda Gates Foundation and the World Bank’s private equity fund, the International Finance Corporation (IFC).

The second deal, which reduced Dr. Thenya’s ownership even further, was worth $6.5 million.

The Dubai-based Abraaj Group, founded a year after Dr. Thenya started Nairobi Women’s, was a renowned investor in multiple sectors across the continent. By the time it collapsed in 2018 amidst a dispute with its investors, the Bill & Melinda Gates Foundation had initiated an audit into how its money in the healthcare fund had been used; it had invested an estimated Sh320 billion in 80 transactions across Africa.

Through the fund, part of which the PE firm’s founder, a Pakistani man called Arif Naqvi, was accused of misusing, Abraaj owned private hospitals in Kenya, Nigeria, and Pakistan. In April 2018, around the same time the screenshots of the Nairobi Women’s Hyrax Whatsapp group were revealed, Naqvi was arrested in Britain on a US warrant.

Naqvi had resigned from Abraaj the month before investigators found evidence that he had defrauded investors in two ways: by inflating the price of assets, which included Nairobi Women’s Hospitals and several other Kenyan private healthcare providers, and misappropriating the fund.

The scandal made headlines around the world, as many other similar investment structures had ridden on the Africa Rising wave and bought many companies, in many countries, on the continent. Meanwhile, The Abraaj Group was closed and its assets stripped for parts by other PE firms. A British firm took over its stakes in Brookside Dairy and Java; an American PE firm called TPG acquired the healthcare fund, which counted among its assets several Kenyan hospitals. TPG then renamed the fund the Evercare Health Fund to avoid the negative reputation of its former name and manager.

These high finance events and deals all took place outside of Kenya, but in the end TPG owned Nairobi Women’s Hospital and several other private hospitals in the country.

Meanwhile, Arif Naviq remains in the UK, and not by choice. Last May, after he had spent a year in custody, he was granted a record $20 million bail. By October, he was also being investigated for bribing Pakistani politicians.

While this complicated game of international finance was happening, the private hospitals in Kenya were still operational, and still working to make profits for the fund, as their investors sorted a new PE firm to “buy” and run them.

In a text forwarded to the Nakuru Hyrax staff on 11th September 2018, CEO Dr. Felix Wanjala outlined the revenues so far, and the targets he expected them to contribute during the course of that day. The Nairobi Women’s Hospital group was making Sh12.81 million a day against a target of Sh15.47 million, and cumulatively was Sh33 million off a total target of Sh170 million.

Team this revenue is too low for the numbers that we have, are we billing,” he posed to the staff.

The shift from Dr. Thenya’s ownership and leadership to the PE funds had launched what was typical corporate behaviour after acquiring a new asset. Nairobi Women’s Hospital had, over time, stopped hiring medical officers (MOs), professionals in waiting who are mostly post-graduate students, to serve outpatient patients. It had instead turned to hiring young clinical officers (COs), who (at the time) only had a diploma earned after three years of training, to do the job.

To staff its rapid expansion, Nairobi Women’s was now depending on COs to serve patients who were not already admitted in the hospital. It was also encouraging them, according to multiple insiders, to meet admission and revenue targets, which were analysed every hour of every day, day and night. While the hospital still hired specialists, it hired less than it required (because MOs demand better salaries) and gave clinical officers the job of determining which patient needed to be admitted. It also gave the COs a financial incentive, at one point 710 shillings per patient they admitted.

This structure meant that while COs would find and push for admissions, even (and especially when) they were unnecessary, more qualified medical officers would only encounter the patients when they had already been admitted, and were already paying for the bed, food, tests, and medicines. They were already, in lingo used frequently in the leaked Whatsapp group messages, customers.

Nairobi Women’s Hospital had, over time, stopped hiring medical officers (MOs) to serve outpatient patients. It had instead turned to hiring young clinical officers (COs), who (at the time) only had a diploma earned after three years of training, to do the job.

Once they were in the hospital, the top management of Nairobi Women’s encouraged the staff, everyone in the Whatsapp group, medical and non-medical staff included, to keep them admitted for longer.

In another text, for example, CEO Dr. Felix Wanjala asked his staff “how did we end up at 18 discharges from 10 planned.” The text included an emoji of a sad face, suggesting he was unhappy with the situation. His COO, Eunice Munyingi, then asked someone called Victoria to answer the CEO. Victoria then passed the question to two other people, before the CEO responded “Vikki calm down…we expect better performance in future. Obviously this is not good for us.”

Medical officers and other specialists who worked at Nairobi Women’s at the time describe multiple instances of being pushed to keep patients for longer than necessary. In a text sent at 8:04 am on 11 November 2018, COO Eunice Munyingi told the staff to “lock discharges at 7” and to “…kindly start now.

This meant that if you were admitted at this particular Nairobi Women’s Hospital, and should have been released to go home, the decision of whether to let you go was based on revenue and admission targets, not on your health. In the texts, the senior executives ask staff to post hourly updates of the branch’s status, specifically how many people are being served and how much money was made, and cheer them on in language a media practitioner described as “better suited for a trading floor than a hospital management team”.

Courtesy of SHOWTIME

The comparison to a trading floor is poignant, because insiders describe an internal system that fits the script of the popular TV series Billions, with a CEO-COO dynamic similar to that of the characters Bobby Axelrod and Mike “Wags” Wagner in the show.

The similarities with a fictional TV show do not end there because the two characters run a ruthless private equity firm that buys companies, restructures them by any means necessary, legal or otherwise, and sells them over for a profit.

Like a PE firm and any modern enterprise, the top management of Nairobi Women’s also kept tabs on its reputation online. In one screenshot from 2017, the then clinical services in-charge, Victoria Wawira, posted a screenshot of a Facebook post written by a woman who had commented on their hurry to admit her child. Whenever she took her daughter to the hospital, “…The doc sees her and immediately its admission no second thought about medication,” she’d written on a Nakuru Country Mums group on Facebook.

In follow-up messages, Victoria told two clinical officers that the post was “trending on FB” and that they should “vet admissions”. In any other context, this would mean that the two COs should make sure they were admitting only patients who needed to be admitted. But in this particular context, it meant one thing – that they should check that they didn’t admit potentially problematic patients who would be suspicious of the need for them to move from outpatient to inpatient.

Medical officers and other specialists who worked at Nairobi Women’s at the time describe multiple instances of being pushed to keep patients for longer than necessary. In a text sent at 8:04 a.m on 11 November 2018, COO Eunice Munyingi told the staff to “lock discharges at 7” and to “…kindly start now.

Bad publicity meant not just harm to the hospital’s reputation, but it could also hurt the bottom line if future buyers, well-meaning investors, and nosy reporters found the posts and figured out how Nairobi Women’s was achieving its spectacular service and revenue targets.

The chaos, and reasons why we seek medical attention, meant patients caught up in this great game of corporate greed, and trusting their doctors to know what was best to restore their health, did not know better. They would have sell assets, sacrifice savings, hold fundraisers both online and offline, and do whatever was necessary to pay their hospital bills, without ever knowing that they had been unsuspecting victims of the vagaries of modern finance, and the focus on Africa that followed the 2008 financial crisis.

In Part II, the author examines how we let this happen, how other hospitals do it too, and how other countries have warded off the barbarians at the gates.

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Owaahh is the pseudonym of a blogger based in Nairobi

Politics

Beyond Political Freedom to Inclusive Wealth Creation and Self-Reliance

Malawi can alleviate poverty and become a model for development and democracy by investing in and improving the quality of human capital, the quality of infrastructure, and the quality of institutions.

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Beyond Political Freedom to Inclusive Wealth Creation and Self-Reliance
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The Tonse Alliance that made history in June by winning the rerun of the presidential election, the first time this has happened in Africa. It represented a triumph of Malawian democracy, undergirded, on the one hand, by the independence of the judiciary, and on the other, by the unrelenting political resilience and struggles of the Malawian people for democratic governance. In short, we can all be proud of Malawi’s enviable record of political freedom. However, our democratic assets are yet to overcome huge developmental deficits. Our record of economic development and poverty eradication remains dismal, uneven, and erratic.

Malawi’s persistent underdevelopment does not, of course, emanate from lack of planning. In 1962, Dunduzu Chisiza convened “what was perhaps the first international symposium on African Economic Development to be held on the continent”. It brought renowned economists from around the world and Africa. In attendance was a young journalist, Thandika Mkandawire, who was inspired to study economics, and rose to become one of the world’s greatest development economists. I make reference to Chisiza and Mkandawire to underscore a simple point: Malawi has produced renowned and influential development thinkers and policy analysts, whose works need to be better known in this country. If we are to own our development, instead of importing ready-made and ill-suited models from the vast development industry that has not brought us much in terms of inclusive and sustainable development, we have to own the generation of development ideas and implementation.

I begin, first, by giving some background on the county’s development trajectory; and second, by identifying the three key engines of development – the quality of human capital, the quality of infrastructure, and the quality of institutions – without which development is virtually impossible.

Malawi’s development trajectory and challenges

Malawi’s patterns of economic growth since independence have been low and volatile, which has translated into uneven development and persistent poverty. A 2018 World Bank report identifies five periods. First, 1964-1979, during which the country registered its fastest growth at 8.79%. Second, 1980-1994, the era of draconian structural adjustment programmes when growth fell to 0.90%. Third, 1995-2002 when growth rose slightly to 2.85%. Fourth, 2003-2010, when growth bounced to 6.25%. Finally, 2011-2015, when growth declined to 3.82%. Another World Bank report, published in July 2020, notes that the economy grew at 3.2% in 2017, 3.0% in 2018, an estimated 4.4% in 2019, and will likely grow at 2.0% in 2020 and 3.5% in 2021.

Clearly, Malawi has not managed to sustain consistently high growth rates above the rates of population growth. Consequently, growth in per capita income has remained sluggish and poverty reduction has been painfully slow. In fact, while up to 1979 per capita GDP grew at an impressive 3.7%, outperforming sub-Saharan Africa, it shrunk below the regional average after 1980. It rose by a measly 1.5% between 1995 and 2015, well below the 2.7% for non-resource-rich African economies. Currently, Malawi is the sixth poorest country in the world.

While the rates of extreme poverty declined from 24.5% in 2010/11 to 20.1% in 2016/17, moderate poverty rates increased from 50.7% to 51.5% during the same period. Predictably, poverty has a gender and spatial dimension. Women and female-headed households tend to be poorer than men and male-headed households. Most of the poor live in the rural areas because they tend to have lower levels of access to education and assets, and high dependency ratios compared to urban dwellers, who constitute only 15% of the population. Rural poverty is exacerbated by excessive reliance on rain-fed agriculture and vulnerability to climate change because of poor resilience and planning. In the urban areas, poverty is concentrated in the informal sector that employs the majority of urban dwellers and suffers from low productivity and incomes, and poor access to capital and skills.

While the rates of extreme poverty declined from 24.5% in 2010/11 to 20.1% in 2016/17, moderate poverty rates increased from 50.7% to 51.5% during the same period. Predictably, poverty has a gender and spatial dimension.

The causes and characteristics of Malawi’s underdevelopment are well-known. The performance of the key sectors – agriculture, industry, and services – is not optimal. While agriculture accounts for two-thirds of employment and three-quarters of exports, it provides only 30% of GDP, a clear sign of low levels of productivity in the sector. Apparently, only 1.7% of total expenditure on agriculture and food goes to extension, and one extension agent in Malawi covers between 1,800 and 2,500 farmers, compared to 950 in Kenya and 480 in Ethiopia. As for irrigation, the amount of irrigated land stands at less than 4%.

Therefore, raising agricultural productivity is imperative. This includes greater crop diversification away from the supremacy of maize, improving rural markets and transport infrastructure, provision of agricultural credit, use of inputs and better farming techniques, and expansion of irrigation and extension services. Commercialisation of agriculture, land reform to strengthen land tenure security, and strengthening the sector’s climate resilience are also critical.

In terms of industry, the pace of job creation has been slow, from 4% of the labour force in 1998 to 7% in 2013. In the meantime, the share of manufacturing’s contribution to the country’s GDP has remained relatively small and stagnant, at 10%. The sector is locked in the logic of import substitution, which African countries embarked on after independence and is geared for the domestic market.

Export production needs to be vigorously fostered as well. It is reported that manufacturing firms operate on average at just 68 per cent capacity utilisation. This suggests that, with the right policy framework, Malawi’s private sector could produce as much as a third more than current levels without needing to undertake new investment.

After independence, Malawi, like many other countries, created policies and parastatals, and sought to nurture a domestic capitalist class and attract foreign capital in pursuit of industrialisation. The structural adjustment programmes during Africa’s “lost decades” of the 1980s and 1990s aborted the industrialisation drive of the 1960s and 1970s, and led to de-industrialisation in many countries, including Malawi. The revival and growth of industrialisation require raising the country’s competitiveness and improving access to finance, the state of the infrastructure, the quality of human capital, and levels of macroeconomic stability.

Over the last two decades, Malawi has improved its global competitiveness indicators, but it needs to and can do more. According to the World Bank’s Ease of Doing Business, which covers 12 areas of business regulation, Malawi improved its ranking from 132 out of 183 countries in 2010 to 109 out of 190 countries in 2020; in 2020 Malawi ranked 12th in Africa. In the World Economic Forum’s Global Competitiveness Index, a four-pronged framework that looks at the enabling environment – markets, human capital, and the innovation ecosystem – Malawi ranked 119 out of 132 countries in 2009 and 128 out of 141 countries in 2019.

Access to finance poses significant challenges to the private sector, especially among small and medium enterprises that are often the backbone of any economy. The banking sector is relatively small, and borrowing is constrained by high interest rates, stringent collateral requirements, and complex application procedures. In addition, levels of financial inclusion and literacy could be greatly improved. The introduction of the financial cash transfer programme and mobile money have done much to advance both.

Corruption is another financial bottleneck, a huge and horrendous tax against development. The accumulation of corruption scandals – Cashgate in 2013, Maizegate in 2018, Cementgate and other egregious corruption scandals in 2020 – is staggering in its mendacity and robbery of the county’s development and future by corrupt officials that needs to be uncompromisingly uprooted.

Malawi’s infrastructure deficits are daunting. Access to clean water and energy remains low, at 10%, and frequent electricity outages are costly for manufacturing firms that report losing 5.1% in annual sales; 40.9% of the firms have been forced to have generators as backup. The country’s generating capacity needs massive expansion to close the growing gap between demand and supply. Equally critical is investment in transport and its resilience to contain the high costs of domestic and international trade that undermine private sector development and poverty reduction.

Digital technologies and services are indispensable for 21st century economies, an area in which Malawi lags awfully behind. According to the ICT Development Index by the International Telecommunications Union, in 2017 Malawi ranked 167 out of 176 countries. There are significant opportunities to overcome the infrastructure deficits in terms of strengthening the country’s transport systems through regional integration, developing renewable energy sources, and improving the regulatory environment. Developing a digitally-enabled economy requires enhancing digital infrastructure, connectivity, affordability, availability, literacy, and innovation.

Malawi’s infrastructure deficits are daunting. Access to clean water and energy remains low, at 10%, and frequent electricity outages are costly for manufacturing firms that report losing 5.1% in annual sales.

The services sector has grown rapidly, accounting for 29% of the labor force in 2013 up from 12% in 1998. It is dominated by the informal sector which is characterized by low productivity, labor underutilization, and dismal incomes. The challenge is how to improve these conditions and facilitate transition from informality to formality.

Enablers and drivers of development

The challenges of promoting Malawi’s socio-economic growth and development are not new. In fact, they are so familiar that they induce fatalism among some people as if the country is doomed to eternal poverty. Therefore, it is necessary to go back to basics, to ask basic questions and become uncomfortable with the county’s problems, with low expectations about our fate and future.

From the vast literature on development, to which Thandika made a seminal contribution, there are many dynamics and dimensions of development. Three are particularly critical, namely, the quality of human capital, the quality of infrastructure, and the quality of institutions. In turn, these enablers require the drivers embodied in the nature of leadership, the national social contract, and mobilisation and cohesiveness of various capitals.

The quality of human capital encompasses the levels of health and education. Since 2000, Malawi has made notable strides in improving healthcare and education, which has translated into rising life expectancy and literacy rates. For the health sector, it is essential to enhance the coverage, access and quality of health services, especially in terms of reproductive, maternal, neonatal, and early child development, and public health services, as well as food security and nutrition services.

The introduction of free primary education in 1994 was a game changer. Enrollment ratios for primary school rose dramatically, reaching 146% in 2013 and 142% in 2018, and for secondary school from 44% in 2013 to 40% in 2018. The literacy rate reached 62%. But serious challenges remain. Only 19% of students’ progress to Standard Eight without repeating and dropout rates are still high; only 76% of primary school teachers and 57% of secondary school teachers are professionally trained. Despite increased government expenditure, resources and access to education remain inadequate.

Consequently, in 2018 Malawi’s adult literacy was still lower than the averages for sub-Saharan countries (65%) and the least developed countries (63%). This means the skill base in the country is low and needs to be raised significantly through increased, smart and strategic investments in all levels of education. Certainly, special intervention is needed for universities if the country, with its tertiary education enrollment ratio of less than 1%, the lowest in the world, is to catch up with the enrollment ratios for sub-SaharanAfrica and the world as a whole that in 2018 averaged 9% and 38%, respectively.

Human capital development is essential for turning Malawi’s youth bulge into a demographic dividend rather than a demographic disaster. Policies and programmes to skill the youth and make them more productive are vital to harnessing the demographic dividend. Critical also is accelerating the country’s demographic transition by reducing the total fertility rate.

As for infrastructure, while the government is primarily responsible for building and maintaining it, the private sector has an important role to play, and public-private-partnerships are increasingly critical in many countries. It is necessary to prioritise and avoid wish lists that seek to cater to every ministry or constituency; to concentrate on a few areas that have multiplier effects on various sectors; and ensure the priorities are well-understood and measurable at the end of the government’s five-year term. Often, the development budget doesn’t cover real investment in physical infrastructure and is raided to cover over-expenditure in the recurrent budget.

The quality of institutions entails the state of institutional arrangements, which UNDP defines as “the policies, systems, and processes that organizations use to legislate, plan and manage their activities efficiently and to effectively coordinate with others in order to fulfill their mandate”. Thus, institutional arrangements refer to the organisation, cohesion and synergy of formal structures and networks encompassing the state, the private sector, and civil society, as well as informal norms for collective buy-in and implementation of national development strategies. But setting up institutions is not enough; they must function. They must be monitored and evaluated.

Human capital development is essential for turning Malawi’s youth bulge into a demographic dividend rather than a demographic disaster. Policies and programmes to skill the youth and make them more productive are vital to harnessing the demographic dividend.

The three enablers of development require the drivers of strong leadership and good governance. Malawi has not reaped much from its peace and stability because of a political culture characterised by patron-clientelism, corruption, ethnic and regional mobilisation, and crass populism that eschews policy consistency and coherence, and undermines fiscal discipline. Malawi’s once highly regarded civil service became increasingly politicised and demoralised. Public servants and leaders at every level and in every institutional context have to restore and model integrity, enforce rules and procedures, embody professionalism and a high work ethic, and be accountable. Impunity must be severely punished to de-institutionalise corruption, whose staggering scale shows that domestic resources for development are indeed available. To quote the popular saying by Arthur Drucker, “organisational culture eats strategy”.

Also critical is the need to forge social capital, which refers to the development of a shared sense of identity, understanding, norms, values, common purpose, reciprocity, and trust. There is abundant research that shows a positive correlation between the social capital of trust and various aspects of national and institutional development and capabilities to manage crises. Weak or negative social capital has many deleterious consequences. The COVID-19 pandemic has made this devastatingly clear – countries in which the citizenry is polarised and lacks trust in the leadership have paid a heavy price in terms of the rates of infection and deaths.

Impunity must be severely punished to de-institutionalise corruption, whose staggering scale shows that domestic resources for development are indeed available. To quote the popular saying by Arthur Drucker, “organisational culture eats strategy”.

The question of social capital underscores the fact that there are many different types of capital in society and for development. Often in development discourse the focus is on economic capital, including financial and physical resources. Sustainable development requires the preservation of natural capital. Malawi’s development has partly depended on the unsustainable exploitation of environmental resources that has resulted in corrosive soil erosion and deforestation. Development planning must encompass the mobilisation of other forms of capital, principally social and cultural capital. The diaspora is a major source of economic, social and cultural capital. In fact, it is Africa’s largest donor, which remitted an estimated $84.3 billion in 2019.

In conclusion, Malawi’s development trajectory has been marked by progress, volatility, setbacks, and challenges. For a long time, Malawi’s problem has not been a lack of planning, but rather a lack of implementation, focus and abandoning the very basics of required integrity in all day-to-day work. Also, the plans are often dictated by donors and lack local ownership so they gather the proverbial bureaucratic dust.

Let us strive to cultivate the systems, cultures, and mindsets of inclusion and innovation so essential for the construction of developmental and democratic states, as defined by Thandika and many illustrious African thinkers and political leaders.

This article is the author’s keynote address at the official opening of the 1st National Development Conference presided by the State President of Malawi, His Excellency Dr. Lazarus Chakwera, at the Bingu International Convention Centre, Lilongwe, on 27 August, 2020.

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Kenya’s Gulag: The Dehumanisation and Exploitation of Inmates in State Prisons

Kenyan prisons today carry the DNA of their forebears – the colonial prisons and Mau Mau detention camps. They are about brutalising prisoners into submission and scaring the rest of society into compliance with the state. And like their colonial predecessors, they are also sites of forced labour.

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The influx of the Mau Mau transformed the prison population in Kenya from one predominantly made up of recidivist petty criminals and tax defaulters to one composed largely of political prisoners, many of whom had no experience of prison life and who brought with them new forms of organisation.

Prison life was harsh, with its share of brutalities and fatalities. Between 1928 and 1930, about 200 prisoners in Kenya died. According to British historian David Anderson, “Kenya’s prisons were already notably violent before 1952 [when the Mau Mau uprising began], more violent than other British colonies.”

However, the incorporation of prisons and detention camps into the “Pipeline” (the system developed by the colonial state to deal with the Mau Mau insurgents and to try and break them using terror and torture) inevitably led to the institutionalisation of the methods of humiliation and torture.

As Anderson notes, “Most of the staff in both the Prison Service and in the [Mau Mau] detention camps were Africans. Some were even Kikuyu. They certainly ‘learned’ these methods during their periods of early employment.” He goes on to say that “those who ran the service by the 1960s and early 1970s were all men who had been recruited and trained during the Mau Mau period”. He thinks it “very likely that these individuals practiced what they had learned as cadets and trainees in the 1950s…I think the Mau Mau experience certainly hardened Kenya’s prison system and introduced a greater range of punishments and harsher treatment for prisoners as a consequence of the conditions off the Emergency”.

Compare, for example, this account of the treatment of Mau Mau detainees in the 1950s published in Caroline Elkins’ book, Britain’s Gulag: The Brutal End of Empire in Kenya:

Regardless of where they were in the Pipeline (the system of camps established for deradicalizing Mau Mau detainees and prisoners), roll call meant squatting in groups of five with their hands clasped over their heads. The European commandants would then walk through the lines, counting and beating the detainees. “The whole thing was just so ridiculous,” recalled one former detainee from Lodwar. “Whitehouse [the European in charge] would just count us over and over again.”

It bears stark similarities to this account published in the Daily Nation about conditions in Kenyan prisons 65 years later:

Omar Ismael, 64, a former Manyani inmate who served nine years till his exoneration in 2017, says he woke up at 5am, despite his advanced aged. They then squat in groups of five to be counted and checked by guards. “My knees are still hurting to date. I have a joint problem too as a result,” he says. He says they had at least six head counts per day. The first one at 5am, followed by 10am, noon, 4pm, 6pm and 7pm.

Kenyan prisons today carry the DNA of their forebears – the colonial prisons and Mau Mau detention camps. They are about brutalising prisoners into submission and, along with the police and military, scaring the rest of society into compliance with the state. They are places of dehumanisation, abandonment and retribution. And like their colonial parents, they prefer to employ the least educated. (At present, out of a staff complement of 22,000, the Kenya Prison Service only has about 700 graduate officers.) As of 2015, according to the World Prison Population List prepared by the Institute for Criminal Policy Research, Kenya has incarcerated more of its citizens per 100,000 population than any other country in Eastern Africa with the exception of Rwanda and Ethiopia.

Notably, about 50 per cent of Kenya’s 54,000 prisoners are pre-trial detainees or those held in remand as they await trial – people legally considered innocent. By comparison, the median proportion of pre-trial prisoners in Africa is 40 per cent and nearly 30 per cent globally. In Eastern Africa, only Uganda and Ethiopia have a higher proportion of pre-trial detainees than Kenya. As in colonial times, pre-trial detention is driven by two factors – the need to extract resources from the populace and the subjugation of the native through criminalisation of ordinary life.

In 1933, submissions to the Bushe Commission provided some flavour of how the threat of arrest and imprisonment was ever-present among the natives.

Relates one Ishmael Ithongo:

Once I was arrested by a District Officer on account of my hat because I did not see him approaching. He came from behind and threw it down. I asked him why because I did not know him. He called an askari and asked for my name. It was in a district outside. He asked me, “Don’t you know the law here that you should take off your hat when you see a white man?” Then he asked me, “Have you got your kipandi?’ I said “No, Sir.” So I was sent to prison… When an askari thinks that you look smart he asks if you have your kipandi. I have seen natives who are going to church in the morning who have changed their coat and forgotten their kipandi. They meet an askari. “Have you got your kipandi?” “No.” “Ah right” and they are marched off to prison.

This will sound familiar to many Kenyans today whose encounters with the police often begin with demands for the production of the kipande (ID card) and end with a stint in overcrowded police cells. However, there are some differences. An audit of pre-trial detention by the National Council on the Administration of Justice found that police generally arrested and charged people for petty offences, with close to half of those arrests occurring over weekends. Most releases from police custody also happened over the weekend with no reason recorded for two-thirds of those releases. Further, only 30 percent of all arrests actually elicited a charge, the vast majority for petty offences. This implies that most police detentions today are something of a catch-and-release programme designed to create opportunities to extract bribes rather than labour.

However, for those who get incarcerated, matters are somewhat different. The exploitation of prisoners’ labour continues. Like the Mau Mau detainees, they are required to work for a token amount determined by the government, which, unlike its colonial ancestor, does not even pretend that the 30 Kenyan cents per day is meant as a wage, with the Attorney-General declaring in court that “prison labour is an integral component of the sentence”. The courts have held that it is entirely compatible with the protection of fundamental rights for the Prison Service to do this as well as to deny convicts basic supplies such as soap, toothpaste, toothbrushes, and toilet paper. Apparently, the conditions the convicts are experiencing cannot be called forced labour and servitude because, the strange reasoning goes, “the Constitution and the Prisons Act do not permit forced labour or servitude”.

Notably, about 50 per cent of Kenya’s 54,000 prisoners are pre-trial detainees or those held in remand as they await trial – people legally considered innocent…In Eastern Africa, only Uganda and Ethiopia have a higher proportion of pre-trial detainees.

Like in colonial times, the beneficiaries of this prison industrial complex are the state and those who control it. Remandees and convicts are liable to be put to work cleaning officials’ compounds and there have been persistent rumours of them being compelled to provide free labour for the private benefit of prison officers and other well-connected government officials, as is the case in Uganda.

While in 1930 earnings from convicts’ labour accounted for a fifth of the total cost of the Prisons Department, the official goal today, as declared by the Ministry of Interior, is for the Department to transform into a “financially self-sustaining entity”. To achieve this, President Uhuru Kenyatta has created the Kenya Prisons Enterprise Corporation with the aim of “unlocking the revenue potential of the prisons industry” and to “foster ease of entry into partnership with the private sector”.

This basically entails deeper exploitation of prisoners’ labour. And even though Kenyatta speaks of improving remuneration, it is notable that this is not a free exchange. Whatever the courts might say, it is clear that the state and its owners feel entitled to the labour of those they have incarcerated, much like their predecessors (the colonial regime and the European settlers) once felt entitled to African labour.

This will sound familiar to many Kenyans today whose encounters with the police often begin with demands for the production of the kipande (ID card) and end with a stint in overcrowded police cells. However, there are some differences. An audit of pre-trial detention…found that police generally arrested and charged people for petty offences, with close to half of those arrests occurring over weekends.

In this regard, the attitude is very like that of the white settler in Kiambu, Henry Tarlton, who told the 1912 Native Labour Commission regarding desertion by African workers that “this is my busiest season and my work is entirely upset, and it is hardly surprising if I am in a red-hot state bordering on a desire to murder everyone with a black skin who comes within sight”. Another white settler, Frank Watkins, in a letter to the East African Standard in 1927 boasted of his “methods of handling and working labour”, which included “thrash[ing] my boys if they deserve it”.

This brutality, especially directed towards African males, was paired with forced labour from the very onset of the colonial experience. (Brett Shadle, Professor and Chair of the Department of History at Virginia Tech, notes that the settlers were much more reticent about their violence on African women, which tended to be sexual in nature.) These settlers were already pushing the colonial state to institute unpaid forced labour on public works projects in the reserves (which it eventually did) as a means of driving Africans to wage employment for Europeans.

But it was within the prison system and Mau Mau detention camps that the practice of forced labour found its full expression. According to Christian G. De Vito and Alex Lichtenstein, “Conditions inside the detention camps created in Kenya in the 1910s and 1920s and in the prison camps opened in 1933 depended on the assumption that forced labour, together with corporal punishment, could actually serve as the only effective forms of penal discipline.” The influx of Mau Mau detainees, they explained, overwhelmed the system “since police repression by far exceeded the capacity of the already overcrowded prisons, and the colonial government decided to establish a network of camps, collectively called the ‘Pipeline’, characterized by violence, torture, and forced labour.”

These are the footsteps in which the Kenyan state is walking. Nelson Mandela once said that a nation should not be judged by how it treats its highest citizens but by how it treats its lowest ones. By that measure, the current Kenyan state is no different from its colonial predecessor.

“It is also worth thinking about what happens to the prison at the end of colonialism,” says Prof Anderson. “There is no movement for prison reform in Kenya after 1963 – rather the opposite: the prison regime becomes harsher and is even less well funded than it was in colonial times. By the end of the 1960s, Kenya is being heavily criticised by international groups for the declining state of its prison system and the tendency to violence and abuse of human rights within the system.”

Prof Daniel Branch stresses that “post-colonial prisons urgently need a history. The Mau Mau period rightly gets lots of attention, but there’s very little by scholars on the post-colonial period”.

It is critical, as Kenya marks a decade since the promulgation of the 2010 constitution, that we keep in mind Mandela’s words and ask whether, if at all, it has changed how those condemned by society – “our lowest ones” – are treated. That will, in the end, be the true measure of our transformation.

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The Myth of Unconditionality in Development Aid

Based on interviews and ethnographic fieldwork in Western Kenya, Mario Schmidt argues that local interpretations of Give Directly’s unconditional cash transfer program unmask how the NGO’s ‘myth of unconditionality’ obscures structural inequalities of the development aid sector. Schmidt argues that in order to tackle these structural inequalities, cash transfers should be ‘ungifted’ and viewed as debts repaid and not as gifts offered.

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The New York Times praises the US-American NGO GiveDirectly (GD), a GiveWell top charity, for offering a ‘glimpse into the future of not working’ and journalists from the UK to Kenya discuss GD’s unconditional cash transfer program as a revolutionary alternative in the field of development aid. German podcasts as well as international bestsellers such as Rutger Bregman’s Utopia for Realists portray grateful beneficiaries whose lives have truly changed for the better since they received GD’s unconditional cash and started to invest it like the business people they were always meant to be. At first glance, GD indeed has an impressive CV.

Since 2009, the NGO has distributed over US$160 million of unconditional cash transfers to over tens of thousands of poor people in Kenya, Rwanda, Uganda, the USA and Liberia in an allegedly unbureaucratic, corrupt-free and transparent way. Recipients are ‘sensitized’ in communal meetings (baraza), the cash transfers are evaluated by teams of internationally renowned behavioral economists conducting rigorous randomized controlled trials (RCTs) and the money arrives in the recipients’ mobile money wallets such as the ones from Mpesa, Kenya’s celebrated FinTech miracle, without passing through the hands of local politicians.

In 2015 and after finalizing a pilot program in the Western Kenyan constituency Rarieda (Siaya County), GD decided to penetrate my ethnographic field site, Homa Bay County. On the one hand, they thereby hoped to enlarge their pool of potential beneficiaries. On the other hand, they had planned to conduct further large-scale RCTs (one RCT implemented in the area, studied the effects of motivational videos on recipients’ spending behavior). To the surprise of GD, almost 50% of the households considered eligible for the program in Homa Bay County refused to participate. As a result, the household heads waived GD’s cash transfer which would have consisted of three transfers amounting to a total of 110,000 Kenyan Shillings (roughly US$1,000).

In order to understand what had happened in Homa Bay County and why so many households had refused to participate, I teamed up with Samson Okech, a former field officer of Innovations for Poverty Action (IPA) who had conducted surveys for GD in Siaya. Samson had been an IPA employee for over ten years and belongs to the extended family I work with most closely during fieldwork. During our long qualitative interviews with recipients of GD’s cash transfer and former field officers as well as Western Kenyans who refused to be enrolled in the program, the celebratory reports by journalists and scholars were replaced by a bleaker picture of an intervention riddled with misunderstandings and problems.

Before I offer a glimpse into what happened on the ground, I want to emphasize that I am neither politically nor economically against unconditional cash transfers which, without a doubt, have helped many individuals in Western Kenya and elsewhere. It is not the what, but the how against which I direct my critique. The following two sections illustrate that a substantial part of Homa Bay County’s population did not consider GD’s intervention as a one-time affair between themselves and GD. In contrast, they interpreted GD’s program either as an invitation into a long-term relationship of patronage or as a one-time transfer with obscured actors.

These interpretations should make us aware of ethical problems entailed in conducting social experiments (see Kvangraven’s piece on Impoverished Economics, Chelwa’s and Muller’s The Poverty of Poor Economics or Ouma’s reflection upon GD’s randomisation process in Western Kenya). They can also crucially encourage us to think about ways of radically reconfiguring the political economy of development aid in Africa and elsewhere.

Instead of framing relations between the West and the Rest as relations between charitable donors and obedient recipients, in my conclusion I propose to ‘ungift’ unconditional cash transfers as well as development aid as a whole. Taking inspiration from rumors claiming that Barack Obama, whose father came from Western Kenya, has created GD in order to rectify historical injustices, I suggest rethinking cash transfers as reparations or debts repaid. Consequently, recipients should no longer be used as ‘guinea pigs’ but appreciated as equal partners and autonomous subjects entitled to reap a substantial portion of the value produced in a global capitalist economy that, historically as well as structurally, depends on exploiting them.

Why money needs to be spent on ‘visible things’

Those were guidelines on how to use the money. It was important that what you did with the money was visible and could be evaluated’, William Owino explained to us after we had asked him about a ‘brochure’ several other respondents had mentioned. One of the studies on the impact of GD’s activities in Siaya also mentions these brochures. In order to ‘emphasize the unconditional nature of the transfer, households were provided with a brochure that listed a large number of potential uses of the transfer.’ 

When being asked which type of photographs and suggestions were included in these brochures, respondents mentioned photographs of newly constructed houses with iron sheets, clothes, food and other gik manenore (‘visible things’). When we inquired further if the depicted uses included drinking alcohol, betting, dancing or other morally ambiguous goods and services, the majority of our respondents dismissed that question by laughing or by adding that field officers had also advised them against using the money for other morally dubious services such as paying prostitutes or bride wealth for a second or third wife.

One of our respondents in Homa Bay took the issue of gik manenore to its extreme by expressing the opinion that GD’s money must be used to build a house with a fixed amount of iron sheets and according to a preassigned architectural plan so that GD, in their evaluation, would be able to identify the houses whose owners had benefited from their program quickly and without much effort. Such practices of ‘anticipatory obedience’ are also implicitly at work in the rationalizations of another respondent. He expected that GD’s field officers who had asked him questions about what he intended to do with the money during the initial survey – questions whose answers had, in his opinion, qualified him to receive the cash transfer – would one day return to see if he had really used the money according to his initially stated intention. The logic employed is clear: The ‘unconditional’ cash transfers needed to be spent on useful and, if possible, visible and countable things so that GD would return with further funds after a positive evaluation.

Recipients understood the relation with GD not as a one-off affair, but as an entrance into a long-term relation of fruitful dependency. In contrast to GD which, like most neoliberal capitalists, understands unconditional cash as a context-independent techno-fix, the inhabitants of Homa Bay framed money as an entity embedded in and crystallizing social power relations.

From such a perspective, free money is not really free, but like Marcel Mauss’ famous gifts, an invitation into a ‘contract by trial’ which has the potential to turn into a long-term relationship benefitting both partners if recipients pass the test and reciprocate with obedience. While some actors framed the offer of unconditional cash as a test that could lead into an ongoing patron-client relationship between charitable donors and obedient recipients, others, the majority who refused to accept GD’s offer, interpreted it as a direct exchange relation with unseen actors.

Why money is never free

‘People in the market and those I met going home told me it is blood money’, Mary, a 40-year old mother remembered. After she had been sampled, Mary had never received money from GD but failed to understand why and believed the village elder had ‘eaten’ her money. She further told us that rumors about ‘blood money’ circulated in church services and funeral festivities. ‘Blood money’ refers to widespread beliefs that accepting GD’s cash implied entering into a debt relation with unknown actors such as a local group sacrificing children or the devil.

Comparable rumors playing with the well-known anthropological trope of money’s (anti)-reproductive potential circulate widely in Homa Bay: Husbands who wake up only to see their wives squatting in a corner of the room laying eggs, a huge snake that lives in Lake Victoria and vomits out all the money GD uses, mobile phones that can be charged under the armpit or find their way into the recipient’s bed if lost or thrown away (many people allegedly threw their phones away in order to cut the link to GD), money that replenishes automatically or a devilish cult of Norwegians that abducts Kenyan babies and transports them to Scandinavia where they are adopted into infertile marriages.

All of these rumors, which are epitomized in a phrase some recipients considered to be GD’s slogan, Idak maber, to idak matin – (‘You live well, but you live short’) – revolve around the same paradox: Money initially offered with no strings attached, but whose reproductive potential will soon demand blood sacrifice or lead to a fundamental change in one’s own reproductive capacities.

Local attempts to ‘conditionalize’ GD’s unconditional cash as well as rumors about tit-for-tat exchanges with the devil undermine GD’s assumption that their cash transfers are perceived by recipients as unconditional. This has two consequences. On the one hand, it questions the validity of studies trying to prove that the program was successful as an unconditional cash transfer program. On the other hand, it urges us to focus on the unintended consequences caused by GD’s intervention. While Western Kenyans who have given consent to participate in the intervention invested their hopes in an ongoing charitable relation with GD, those who have refused to participate – as well as some who did – have been haunted by fear and anxiety triggered by situating GD’s activities in a hidden sphere.

All this raises ethical and political questions about GD’s intervention in Homa Bay County. Did GD, an actor that is neither democratically elected nor constitutionally backed up, have the right to intervene in an area where almost 50 % of the population refused to participate? Did the program really reach the poorest members of society if accepting the offer depended on understanding the complex networks of NGOs that constitute the aid landscape? Should it not be considered problematic that a US-American NGO uses whole counties of an independent country as laboratories where they experimentally test the feasibility of unconditional cash transfers in order to assure their donors that recipients of unconditional cash ‘really’ do not spend donations on alcohol and prostitutes?

Apart from raising these and other ethical and political questions, the reactions of the inhabitants of Homa Bay County can be understood as mirrors reflecting a distorted but illuminating image of the development aid sector. Narratives about women laying eggs and satanic cults sacrificing children exemplify an awareness of the fact that, on a structural level, the development aid sector is shot through with inequalities and obscure hierarchical power relations between donating and receiving actors. At the same time, recipients’ anticipatory obedience to use the cash on ‘visible things’ unmasks a system that appears overwhelmed by the necessity to constantly evaluate projects in order to secure further funding.

By ‘conditionalizing’ cash transfers as long-term patronage relations or tit-for-tat exchanges with the devil, inhabitants of Homa Bay unmask GD’s ‘myth of unconditionality’ and thereby relocate GD into the wider development aid world in which they have never been equal partners.

Why we must ‘ungift’ development aid

‘I think it was because of Obama’, a former colleague of Samson who had administered the surveys of GD in Siaya County told me while we enjoyed a meal in a restaurant along Nairobi’s Moi Avenue after I had asked him why the rejection rates of GD’s program in Siaya had been so low. According to rumors that circulated widely during GD’s first years in Siaya, Barack Obama, whose father came from a village in Siaya County, had teamed up with Raila Odinga, an almost mythical Luo politician, in order to channel US-American funds ‘directly’ to Western Kenya, i.e. without passing through the Central Kenyan political elite who had – in 2007 as well as 2013 – ‘stolen’ the elections from Raila.

As a consequence, at least some recipients did not agree with interpretations of the cash transfers as market exchanges with shadowy actors or invitations into long-term relationships of patronage. Rather, they conceptualized the transfers as reparations originating in Obama’s attempt to recoup losses accumulated by the Luo community due to political injustices provoked by the actions of what many consider to be a corrupt Kikuyu elite. This conjuring of a primordial ethnic alliance between Obama and Western Kenyans might strike many as chimerical.

Be that as it may, we should acknowledge that the rumor of Obama’s intervention situates the cash transfers in a social relation between two equals who accept their mutual indebtedness and act accordingly by putting things straight. By reinterpreting GD as a clandestine operation invented by their political leaders, Barack Obama and Raila Odinga, inhabitants of Siaya portray themselves as belonging to a community of interdependent equals whose members are entitled to what the anthropologist James Ferguson has called their ‘rightful share’.

How would development aid look like if we dared to transfer this idea of a community whose members acknowledge their equality and mutual indebtedness to our global economic system? One way to redeem the fact that we all live in a highly connected capitalist economic system spanning the whole globe and depending on exploiting a huge portion of the global community would be to follow in the footsteps of the inhabitants of Siaya and rebrand cash transfers as reparations being paid for historical and structural injustices.

By way of conclusion, I want to suggest the idea of ‘ungifting’ development aid, i.e. to reframe it as a duty and to accept that recipients of cash transfers have the right to receive their share of the value produced by the global capitalist economic system. Consequently, cash transfers should be considered as debts repaid and not as gifts offered.


Names of individuals in this article have been anonymized.

This article was first published in the Review of African Political Economy.

Names of individuals in this article have been anonymized.

 

 

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