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Another False Messiah: Why Fin-Tech Isn’t the Panacea for Africa’s Development

9 min read.

After the manifest failure of microcredit to address poverty in Africa and everywhere else, the international development community has hit upon a new microcredit-related idea that, it claims, will do the job this time around: ‘fin-tech’, i.e. financial technology. As Milford Bateman argues in this article that fin-tech has the potential to gravely undermine the position of the poor and to increase inequality while, not coincidentally, vastly enriching a narrow elite.

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Another False Messiah: Why Fin-Tech Isn’t the Panacea for Africa’s Development
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Financial technology, or ‘fin-tech’, has been defined as, ‘Computer programs and other technology used to support or enable banking and financial services.’ The pioneering fin-tech that so many development experts love is M-Pesa, Kenya’s agent-assisted, mobile phone-based, person-to-person payment and money transfer system. M-Pesa’s origins lie in a project funded by the UK’s Department for International Development (DFID) in 2000 to encourage the private sector to improve access to financial services. M-Pesa was launched in March 2007 and expected to specialise in providing microcredit, but it was found that clients were more interested in the transfer of money, and so this became the focus of its activity. M-Pesa operates through a network of agents that allow clients to put cash into their account and take it out. By changing cash into ‘e-balances’, it is possible to send cash to another account via an SMS message. M-Pesa is owned by Kenya’s largest and most profitable company Safaricom, which in turn is majority owned (including through its South African subsidiary) by the UK telecoms multinational Vodafone plc.

Kenya stands at the front of the fin-tech movement thanks to M-Pesa and M-Shwari – a lending application also within the Safaricom group. But, thanks to the support of the international development community, the fin-tech revolution is spreading right across Africa. Digital payments are being introduced in many African countries, while fin-tech savings and loan platforms are expanding very rapidly indeed. One of the leading examples is MyBucks, the South African-owned (but registered on the Frankfurt Stock exchange) financial institution. MyBucks has been purchasing non-profit microcredit institutions and other ‘bricks and mortar’ lending operations all across Africa in order to turn them into hugely profitable fin-tech platforms, not least expecting to benefit by significantly upping the amount of expensive microcredit it can make available through a mobile phone.

However, it is largely thanks to M-Pesa in Kenya that the international development community now argues that a new digital utopia has arrived in Africa, i.e. that the further introduction and growth of fin-tech applications will play a major role in addressing the pressing need for meaningful poverty reduction, job creation and sustainable local economic development.

Unfortunately, the debate over the real value of fin-tech, including M-Pesa, is hopelessly one-sided since the fin-tech lobby itself is leading it. By this I mean the World Bank and its International Finance Corporation arm, USAID and DFID. These international development agencies also work in conjunction with a range of other private institutions with a keen self-interest in seeing the fin-tech model spread across the Global South, centrally including many of the major financial institutions (CitiGroup especially), leading Silicon Valley tech investors and investment funds, the two major digital payments companies (Visa and Mastercard) and a handful of high-profile Silicon Valley philanthro-capitalists (especially Bill Gates through his Gates Foundation). This effort is then further backed up by a plethora of fake ‘astro-turf’ NGOs, such as the Better than Cash Alliance (BTCA), that were set up by the private institutions noted above and which quietly do their bidding while presenting themselves to the world as if they are really all about ‘helping the global poor’.

The interests of all of the above parties are patently clear. For the international development agencies, it is about promoting an ideologically preferable ‘pure’ market-driven form of financial intermediation, while also benefitting American and British multinationals. For the multinationals and investors involved, the prospect of fantastic profits in a growing under-regulated market is more than enough to wet their appetites.

Unfortunately, the debate over the real value of fin-tech, including M-Pesa, is hopelessly one-sided since the fin-tech lobby itself is leading it.

The power of the US-based philanthro-capitalists here should also be considered. Some analysts see them as neutral bodies when it comes to promoting interventions designed to assist the global poor, always being careful to choose ‘what works best’. However, this is simply not so. Look carefully and one can find that they are actually primarily engaged in validating and extending the system that conferred upon them their great wealth and power at the expense of many around the world, especially the poor; they have no interest in trying to change this system at all. Philanthro-capitalists support the fin-tech model to preclude any fundamental challenge to African capitalism. The neoliberal model of capitalism supremely validates and celebrates their achievements, and they have no wish whatsoever to change this. Fin-tech is a useful innovation to support because it provides the appearance of great things for the poor, but no substance.

As Anand Giridharadas points out, ‘American elites generally seek to maintain the system that causes many of the problems they try to fix — and their helpfulness is part of how they pull it off. Thus their do-gooding is an accomplice to greater, if more invisible, harm … What their “change” leaves undisturbed is our winners-take-all economy, which siphons the gains from progress upward.’ Like microcredit the US government-led fin-tech movement involves significant downsides for the poor, and keeps off the table alternative pro-poor development models and institutions, while it provides a whole array of ideological and financial gains for global elites.

What is the real development impact of fin-tech on the ground?

Alarmingly, the driving force behind the fin-tech revolution in Africa – market fundamentalist ideology and the aggressive drive for profit – are the very same two noxious components in the US financial sector that gave rise to the multiple frauds that created the global financial crisis in 2008. This fact alone is more than enough to suggest extreme caution. But emerging facts on the ground confirm that extreme caution is very much warranted.

Consider first that in the last decade or so conventional microcredit institutions had already begun to create a worrying level of indebtedness in Kenya. Reckless lending became a pervasive feature of virtually all maturing microcredit sectors across Africa. The arrival of fin-tech has clearly begun to exacerbate this over-indebtedness problem. This was almost inevitable when, for instance, many fin-tech lenders advertise their services with the claim that it is now possible to obtain a new microloan ‘at the touch of a few buttons on your mobile phone’.

Even one-time microcredit advocates are now sounding the alarm bells. Perhaps the most notable of these voices is that of Graham Wright, the founder and Group Managing Director of Microsave, one of Africa’s most successful financial inclusion consultancy companies. Microsave has succeeded down the years by advising governments and the international development community on the need to embrace the commercialised microcredit model and then, when it began to become clear that the microcredit model had failed, how to promote the new financial inclusion agenda. Launched by the World Bank, the financial inclusion movement is an effort to protect and hide the failed microcredit model by incorporating it into a new and wider agenda that argues the poor now need a whole range of market-driven financial instruments in order to better cope with their poverty.

Perhaps one of the worst aspects of the current over-indebtedness problems, however, is the impetus fin-tech has provided for the serious gambling problem currently afflicting Kenya and neighboring countries such as Rwanda, Uganda and Tanzania. Microcredit becomes the chance to be ‘in it to win it’ for so many of East Africa’s poor, offering them the hope of instantly escaping their poverty predicament, or at least a little excitement in an otherwise desperate daily struggle to survive. Young people are particularly susceptible to the allure of gambling, with all too many able to instantly access cash via M-Pesa and then sending it on to one of the many gambling sites. Entry inevitably starts with small sums, but regular gambling can result in major losses for those unable to quit.

Consider also those who choose to use their digitally-acquired microcredit for what it was originally intended – to create new microenterprises. This can only be good, right? Sadly, no. Rather than strengthening the local economy, such a trajectory often undermines it. For one thing, the sheer paucity of local demand means very many new enterprises simply cannot survive for very long; as many as 46 per cent of MSMEs in Kenya fail within a year after their establishment.

However, it is largely thanks to M-Pesa in Kenya that the international development community now argues that a new digital utopia has arrived in Africa, i.e. that the further introduction and growth of fin-tech applications will play a major role in addressing the pressing need for meaningful poverty reduction, job creation and sustainable local economic development.

Worse still, even if enough new entrants are successful, their success will inevitably eat into the local demand that existing microenterprises were counting on to survive. This forces very many of these already struggling incumbents to contract or fail. Economists call this ‘job churn’, a highly unproductive entry and exit phenomenon that creates very few net sustainable jobs and generally makes the local economy structurally weaker. Further compounding the problem created, the ultra-competitive local market structure created by fin-tech lending helps to force average incomes down to the subsistence level. More of the poor might therefore be more active in their own new microenterprise, but all microenterprises in the community will tend to earn less on average, meaning that they are in work but poorer than ever. This was a huge problem in South Africa, when over 1997-2003 microcredit helped create many new informal microenterprises and some jobs, but this additional competition helped depress average incomes by a crushingly large 8 per cent per year. With the current high growth rate of fin-tech lending in Kenya and new fin-tech lenders emerging just about every day, it seems unlikely that such a negative scenario can be avoided there.

Academic Economists and Fin-Tech

But some academic economists say great things about fin-tech. By far the most talked-about contribution to date has been that by US-based economists Tavneet Suri and William Jack. Almost every article on the issue of fin-tech now quotes their astonishing headline claim that up to 194,00 households in Kenya (2 per cent of the total) were able to escape poverty between 2008 and 2014 thanks to their use of M-Pesa.

Unfortunately, this headline-grabbing claim by Suri and Jack is largely unfounded There are a surprisingly large number of defects in the work by Suri and Jack, which is somewhat surprising given that the two economists hold high academic positions in reputable US institutions. So where have they gone wrong?

First, Suri and Jack completely ignore the ‘job churn’ and lower average income effects just noted above. In spite of the clear evidence that failure rates of microenterprises are extremely high in Kenya, as everywhere in the Global South, they chose to assume that every women in Kenya who starts a tiny microenterprise with the help of M-Pesa must have succeeded. There is thus no need to explore in their analysis any of the familiar downside problems associated with the failure of a microenterprise. Of course, that is not to say that there are no positive impacts of new microenterprise entry in Kenya, but without looking at the impact of exit as well as entry we simply cannot tell. Inevitably, Suri and Jack also chose to ignore the displacement impacts affecting incumbent microenterprises. They conjured up instead a Disneyland-style world of perfect competition in which the local economy is sufficiently elastic to absorb any number of new microenterprises supplying lots more simple goods and services without creating any problems for anyone. It is not just sociologists and anthropologists, like Mike Davis, who well understand that such a rose-tinted model is fundamentally wrong, many development economists do too (notably the late great Alice Amsden).

Suri and Jack then compound their problematic analysis by also choosing to ignore the issue of the destructively high rates of individual over-indebtedness that now exist in Kenya. When it is evident to many economists (including surely their local researchers?) that M-Pesa has significantly extended this very serious problem, this is another major omission. And when leading financial analysts such as Graham Wright are vociferously arguing that the over-indebtedness situation is creating a huge problem, it is difficult to see why and how such a serious downside can be missed in any analysis of the development and poverty impact of M-Pesa.

Finally, as economists working in the neoclassical tradition, Suri and Jack dutifully refuse to consider issues related to the operations of power and imperialism in the sector and how they might shape markets in order to benefit above all one – the most powerful – side of any market transaction.

Accordingly, they have nothing to say about the fact that the majority owner of M-Pesa – the UK multinational telecoms giant Vodafone – is generating massive profits from its stake in M-Pesa, value that is ultimately harvested from the tiny and often desperate financial transactions and tiny business operations of Kenya’s poor. This profit stream is being repatriating back to already wealthy shareholders in the UK and in other global financial centres, just as in previous centuries, in fact, when mining and other activities allowed the UK’s colonial elites to extract significant wealth value from the country’s many colonial possessions.

As Anand Giridharadas points out, ‘American elites generally seek to maintain the system that causes many of the problems they try to fix — and their helpfulness is part of how they pull it off. Thus their do-gooding is an accomplice to greater, if more invisible, harm … What their “change” leaves undisturbed is our winners-take-all economy, which siphons the gains from progress upward

All told, one really has to wonder if Suri and Jack’s work was ever meant to be a genuine effort to assess the value of fin-tech and M-Pesa. Or was it perhaps simply an output that was designed to provide a headline-grabbing claim that could then be used by the US-led international development community – notably the World Bank – to convince African governments into embracing fin-tech regardless of the hugely problematic impact it will have on their poor? We should remember that there is a track record of just this underhand tactic being used by certain sections of the international development community with regard to microcredit. In giving an unfeasibly positive view of the impact of microcredit in Bangladesh, two World Bank economists, Mark Pitt and Shahidur Khandker, nevertheless achieved the World Bank’s strategic goal of instantly validating microcredit in the eyes of the world, thus opening the way for its rapid expansion. When Pitt and Khandker’s analysis was later on largely debunked, this did not matter: its expansion around the Global South had been secured in the meantime and many financial corporations and investors in the leading financial centres in the rich countries were soon doing very well indeed from their profit flows originating in the Global South. So, are Suri and Jack the new Pitt and Khandker perhaps?

There is no doubt that fin-tech has the potential to liberate enormous value that could make the lives of the global poor immeasurably better; for example, allowing member-owned financial cooperatives and credit unions to provide better and cheaper services for their members while redistributing any profits from the operation right back to them. But the problem as it stands in Kenya – and wider still in Africa and the world – is that the bulk of the value being released by fin-tech is not designed to go to the poor, who will most likely be worse off: it is very clearly designed to go up into the hands of a narrow global financial-digital elite that are the main forces behind the fin-tech ‘revolution’.

The 2008 global financial crisis showed the world that an exciting new innovation said to be of huge benefit to America’s poor minority communities – sub-prime mortgages – was actually expressly designed to enrich a narrow Wall Street financial elite. If a similar deception is not to be perpetrated in Kenya and across Africa, then those genuinely committed to poverty reduction and social justice, must urgently take concrete action.

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

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Milford Bateman is a Visiting Professor of Economics, Juraj Dobrila University of Pula, Croatia and Adjunct Professor of Development Studies, St Marys University, Halifax, Canada.

Politics

Africa’s Land, the Final Frontier of Global Capital

If the designs of global big money are not stopped in their tracks, Africa is threatened with environmental degradation and nutritional poverty.

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Africa’s Land, the Final Frontier of Global Capital
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Three great factors are coming together to constitute what may be a whole new, and final chapter in the book of horrors that have been visited on the African people since the birth of Western European capitalism.

If Native Africans do not begin to think very deeply about what this is going to mean for what is left of them, in terms of their livelihoods and ways of living, then the recent past will seem like a small piece of paradise.

Unlike our ancestors, who are often blamed — opportunistically — for the original conquest of Africa and the trade in enslaved Africans that came before it, this time round, there will be no excuses or debate. Africa now knows what colonial conquest is and what it does, in a way that our unfortunate ancestors could not.

The first factor is that capitalism is fast running out of things to destroy in order to make profits. The climate crisis is the best evidence of this. This has been a long-term trend, certainly since the 1960s. However, the most recent financial collapse of 2008 certainly intensified it. Of the grand things and sectors left for capitalism to ravage, there is the production of food for the masses of people crowded into the towns and cities of the West, with no space, time or fundamental skills to produce it for themselves from scratch.

The global corporate food industry is based on one key assumption: that the human race, as it continues to grow in number, will become less and less able to independently produce food for itself. These is because of embedded assumptions about the inevitability of intensive urbanization, as well as time and lifestyle choices, themselves often culturally encouraged, if not imposed, by the same industry.

Food, that indispensable need, is now recreated as a guaranteed industrial commodity.

And so, a lot of corporate interest and money has migrated into the corporate agriculture sector, globally. Global big money is now trying to colonise food production itself, on a global scale, in order to find new ways of keeping its money valuable. Writing in mod-2011, the late Dani Nabudere perceives a deeper conflict:

During the first three months of 2008-the year the global economic crisis intensified, international nominal prices of all major food commodities reached their highest levels for fifty years. The United Nations Food and Agricultural Organisation-FAO reported that food price indices had risen, on the average, by 8% in 2006 compared with the previous year.  In 2007, the food index rose by 24% compared with 2006 and in the first three months of 2008, it rose by 53% compared with 2007. This sudden surge in prices was led by increases in vegetable oils, which on the average increased by 97%, followed by grains with an increase of 87%, dairy products with 58% and rice with 46%.

This means that investing in food, or the assumption of the future existence of food as a commodity to be traded. In short, what is known as the Futures market. But the problem with futures is that at some point, the commodity will have to come into existence.

The second thing native Africans need to be aware of, and arising from the first, is that African land is going to be in demand in a way not seen even at the height of the period of European colonial domination.

Most of the world’s arable land is now found somewhere in Africa. It is unclear if by this is meant arable land under use, or also land that can be put to agricultural use (but may be located under a forest, or something, at present).

The March 2012 issue of Finance & Development Magazine sheds some light on that equation:

Throughout the world, it is estimated that 445 million hectares of land are uncultivated and available for farming, compared with about 1.5 billion hectares already under cultivation. About 201 million hectares are in sub-Saharan Africa, 123 million in Latin America, and 52 million in eastern Europe. . .

The third factor is that arable land is only arable if it has fresh water near it. And it is only viable for corporate exploitation if it also has no people on it. Africa is therefore the prime target: plenty of fresh water, and very few real land rights.

In my estimation, the area of Africa between the Western and Eastern Rift Valleys running along the length of the Nile valley below the Sahel has been identified as on the last open, near-virgin territories, ripe for intensive mechanized agricultural exploitation.

That area’s human settlements have historically originated around the pattern of freshwater bodies. A lot of Uganda was once a wetland. As a result, the country will find itself located at the very epicentre of any such an enterprise.

Dr Mike Burry, a now legendary American stock market operator is reported in the Farmfolio website to have said, “I believe that agricultural land – productive agricultural land with water on site – will be very valuable in the future . . . . I’ve put a good amount of money into that.”

The website goes on to report quite sarcastically,

Over the next three decades, the UN forecasts the global population to increase to about 10 billion. How do you imagine farmland investments will benefit from an over 30% increase in mouths to feed? Good luck feeding two billion people with Bitcoin or gold nuggets.

In this sense, colonialism was just the attempted start, with the former white settler farm economies of Kenya and southern Africa as the increasingly decrepit leftovers. The goal now is African land in general, wherever land can be turned over to large-scale (and therefore mechanised, “scientised” and corporatized) production of the commodities needed to make factory food.

The implications are clear: the goal of the huge capitalist formations that dominate public and foreign policy in the industrial countries, and whose agribusiness interests have a global reach, is to turn Africa into a huge farm, both as an opportunity, and as a response to an internal crisis.

In a May 2017 opinion piece published in the UK Guardian newspaper, then United Nations Environment Programme Head Erich Solheim made a similar point:

Several scenarios for cropland expansion – many focusing on Africa’s so-called “spare land” – have already effectively written off its elephants from having a future in the wild. These projections have earmarked a huge swathe of land spanning from Nigeria to South Sudan for farming, or parts of West Africa for conversion to palm oil plantations.

All this speaks directly to the immediate future of the African people. Put bluntly, in order to put industrial agriculture in place here, there will have to be genocide, massive environmental damage, widespread human displacement, and therefore repression and conflict as the tools of implementation.

African land is going to be in demand in a way not seen even at the height of the period of European colonial domination.

The Alliance for Food Sovereignty in Africa (AFSA), calls the bringing of the US agribusiness model to Africa “a grave mistake”. They describe the model as “the single largest cause of biodiversity loss worldwide,” that “also fails to solve hunger, negatively impacts small-scale farmers, and causes environmental harm.”

It is in this context that the debates in Uganda and Kenya, for example, about land use and policy, can then be appreciated.

In Uganda, President Yoweri Museveni has launched a political offensive (once again) against the Kingdom of Buganda, describing its neo-traditional land tenure system as “evil” and in desperate need of reform.

This should not come as a surprise to anyone. First of all, Mr Museveni has firmly established himself as the pre-eminent fixer for imperialist ambitions in the Great Lakes Region. Whatever the owners of Western capital want here is what he will always try to deliver, no matter the collateral damage. Secondly, whenever the Ugandan president hatches a plan targeting the wealth and resources of native Ugandans, he begins with an attack on Buganda. Not because there is anything more valuable there, but because it enables the ideological seduction of a useful section of Ugandan political society: Ugandan “patriotism” was built on the notion that native identities are a bad thing, and that the Ganda identity is the worst of all.

It worked in the process of marginalising native voices in the independence movement and replacing them with smooth-talking “pan-Africanists”.

It then worked again with the creation of the culture of dictatorship between 1966 and 1979. Voices raised in opposition were easily dismissed as “divisive”, or retrograde. The mission now, was to build the new non-ethnic nation.

More recently, it has been deployed again to justify global neo-liberal designs on African land, through dismissing native resistance to it as “backward” and “parochial”.

Once it has been politically established that the overriding of native objections to anything is an essential and desirable part of development, then the “principle” can be applied in practice, to all other parts of the country.

Through its loyal and devoted client, the National Resistance Movement regime, Western capitalism is targeting all Ugandan land, regardless of which natives own it and under what system.

The same principle works differently in Kenya, but towards the same end. Initial white settler-based agriculture was never successful. Part of the story of Kenyan independence is actually the story of the Empire at headquarters becoming increasingly unwilling to deploy the economic, political and military resources needed to maintain a colony largely for the benefit of a small group of unproductive, self-regarding “middle-class sluts”, as one of the British commanding officers is alleged to have described the settlers.

However, a legacy of that time is that unlike in Uganda, vast areas of Kenya’s potentially productive land are still in white and foreign ownership. And a lot of this is in areas historically within a pastoralist ecosystem.

A succession of Kenyan governments neglected to address this historical injustice. In fact, through corruption, key individuals in a number of those regimes actively took advantage of the situation and joined the white families in becoming big landholders themselves.

Put bluntly, in order to put industrial agriculture in place here, there will have to be genocide.

Today, the three-way contestation between native (often pastoralist) communities, dogged white and other land oligarchs, and a wavering, uncaring state, rumbles on.

Co-author of The Big Conservation Lie: The Untold Story of Wildlife Conservation in Kenya, longstanding Kenyan conservation biologist, and land rights activist, Mordecai Ogada, has long argued that the whole wildlife tourism-based “conservation” industry run off the vast settler-leased native landholdings is basically a landgrab. The question will be Is this just for tourism, or will it be open to other ventures, like industrial agriculture?

It could lead to something deeper. Arguments for “development” and “rangeland/wildlife conservation” will be mobilised as a cover to carry out large-scale land grabbing and the eviction of peasants and pastoralists from lands they have historically occupied. Not just for the parochial descendants of the original white settlers now turned “conservationists”, but the kind of mega-scale mechanised planting that has been so central (and destructive) to the American mid-west, the Amazon basin, and native Canada.

This was also partly how the war that eventually split Sudan played out in the now separated south, and still plays out in Darfur and the Nuba Mountains. A significant section of Arab-descended northern economic elites was centered on the production of wheat. According to the Sudanese intellectual Dr Fatimer Babiker Mahmoud, in the late 1980s, this sector was making millions of dollars annually from the large-scale planting, harvesting and export of the grain to Europe, Asia and the Arab world.

Sometimes this meant the clearing of the more fertile lands of the south, the Nuba mountain lowlands and the Darfur region – all largely inhabited by Black Africans –  for the mechanised growing of wheat. This is what gave the conflict its racial character, as Arab chauvinist arguments were used to justify this genocide.

But, as with the white settler projects, these should be seen as trial runs in the greater measurement of our economic history. There is a need to understand the sheer scale and scope of these operations.

What may be coming will be much grander in scale, out of both Western necessity and greed.

Of the top ten foods listed as traded the most within global trade by  the Just-Food Magazine website in 2014, (fish, soybean, wheat, palm oil, beef, soybean meal, corn, chicken meat, rice and coffee) there are five key items that drive the processed food industry: palm oil, wheat, soya and corn.  It seems sugar cannot be accurately measured because it features in just about anything processed.

In addition, meat production (chicken, beef and pork) is dependent on the others on the list. Cattle are fed on corn, and soya (and the soybean meal) comprises part of what is fed to chickens.

The scale of the operations means that huge sums of money are invested. In today’s world, this means money from banks and institutional investors (hedge funds, etc.) as shareholders in agribusiness corporations. Poultry factories can contain up to forty thousand chickens permanently locked in cages for laying, or just warehouses of several thousand square feet. In early 2020, some 20 million chickens were being slaughtered each week in the United Kingdom. Corn and other grain are usually planted on lots measuring thousands of hectares apiece.

When investing on this scale, certain guarantees must be put in place. These are not matters that are left to chance, or fortune. And the primary purpose of all capitalist economic activity, especially in the West, is to obtain the biggest private return possible on any investment. And also usually in the shortest possible turnaround time.

This is why “insurance” measures are locked in from the start. In particular, chemical-based fertilisers, pesticides and fungicides and also increasingly, the use of genetically modified seeds and livestock, as well as steroids and antibiotics to promote rapid growth and prevent sicknesses.

In fact, through corruption, key individuals in a number of those regimes actively took advantage of the situation and joined the white families in becoming big landholders themselves.

The goal is huge, regular volumes of uniform products to be processed and marketed to huge urbanized populations.

The whole commercialisation process begins in the West, where this industry is the most developed. The European conquest of the continents of north and South America, also mark the period when food production migrated from being a community-based activity, to an industry.

This led to the clearance of human settlement from large areas of land, as well as the destruction of forests and wetlands, all to make way for the animal ranches and very big plantations.

This way of life is now being increasingly imposed on all societies, as “the normal”.

The recent riots in the Republic of South Africa for example, are an illustration of the dangers of becoming prisoners of a privately owned, mechanised food supply system, and also an attempted repudiation of it.

The rest of Africa is quickly “catching up” to this advanced backwardness, with the increasing rate of unplanned migration to urban centers due to loss of opportunities in community-based agriculture.

In Uganda for example, this process was driven by the intentional Museveni-led neo-liberal disruptions to the adapted system of community-based agriculture that has been built up in the country over a period of nearly eight decades.

Agricultural production remains at the heart of this struggle. The Africans sought to ensure that they continued to produce their indigenous food crops so as to retain food sovereignty, while at the same time engaging in the new cash crop economy that was encroaching on their land and labour power.

Official African policy within each African state, as well as in the regional economic blocs and the various policy and finance bodies (such as the African Development Bank), remain uncritically in support (or at least not opposed) to this general strategic direction.

What may be coming will be much grander in scale, out of both Western necessity and greed.

“Africa must start by treating agriculture as a business,” wrote African Development Bank (AfDB) President Dr Akinwumi Adesina, in African Business magazine in 2017.  “It must learn fast from experiences elsewhere, for example in south east Asia, where agriculture has been the foundation for fast-paced economic growth, built on a strong food processing and agro-industrial manufacturing base.”

Our official planners suffer from a tragic tendency of conflating any activity involving money and machines, with “development”. The intention is to duplicate life as it is almost universally led in the Western-style countries. They think is will bring “industrialisation”, and through that, jobs.

There are four significant conflicts or budding conflicts on the continent right now, in which arable land for mechanisation will increasingly become a factor. These are in southern Ethiopia, Congo and the whole Sahel zone, anchored on Nigeria (and Sudan), and Kenya.

If these developments are not challenged and stopped, Africa can look forward to environmental degradation, and nutritional poverty.

We will all become Africans in South Africa, and poor people in the West.

Assuming the Western industrial system lasts much longer. And that the planet also does.

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Politics

How Capitalism Uses and Abuses the Arts

The arts business is a very flawed, archaic and extremely exploitative model but artists continue to rely on corporate sponsorship, without questioning the shrinking spaces and opportunities for the arts to thrive.

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In my last piece, I talked about how our education system destroys the arts by corrupting the meaning of education, work and the arts. And I said that these lies that are perpetuated in the name of education come from the unholy and abusive marriage between education and business. (I have said elsewhere that this marriage should be annulled immediately.)

In this piece, I’m going to talk about how capitalist business is the prime beneficiary of the terrible state of the arts in Kenya.

​Businesses swing artists between two extremes. On one hand, which I already explained in my previous letter, the business (parasite) sector encourages the education system to degrade the arts, so that art does not look like real work that takes skill and resources. By doing that, the business sector justifies artists not being paid for their work. If you have noticed that you are not getting paid, or your payment is delayed, it is because of that madharau for the arts. The accountants cooking books look at you and think to themselves “Why should I pay someone for shaking around or singing for people? Even I could have done that work if I wasn’t here balancing books.”

On the other hand, capitalism does pay artists huge amounts of money, like we see in Hollywood where people like Oprah and Jay Z have become billionaires through entertainment.

In the end, artists are treated like battered spouses. One minute, a spouse is being abused and beaten, and the next minute, when the battered person has had enough, the abuser apologizes, swears how much they love the battered person and promises not to beat the spouse again. And the cycle starts again.

Art and wealth

The first thing to understand about the arts business is that it is a very flawed, archaic and extremely exploitative model. I will talk mainly about music, but book publishing and other types of art business work using the same principle.

Basically, the art business uses the rentier model, like a landlord. A landlord builds a house once but earns money on that house as long as he owns the right to that house. The “work” of living there, or the business carried out there, is done by other people, but the landlord earns a cut of that work despite doing no work. Simply because he owns the property in which the work was done.

And that is the same thing record labels and studios do. They provide initial capital and make the artist sign a 360-degree contract that allows the label to earn from everything the artist is involved in for the rest of the artist’s life: performance, recording, brand merchandise and even artistic license. An artist who is signed to a record label is an enslaved person. In the US, artists who are lucky earn 10 to 15 per cent of the revenues they generate for the music industry. The rest are unlucky and earn much less, if anything.

Imagine that. For every artist billionaire we know, their record label earns nine times more.

As an artist, you’re probably thinking, “Well, it may be exploitative but at least it works. Why can’t those exploiters come and work in Kenya?”

Actually, they are working here, and we know it. They have names like MCSK and Liberty Afrika. And the way these companies exploit artists is the same way other companies exploit everybody else in employment. The wages we earn are nothing compared to the profits that entitled, lazy and ignorant fat cats make from our work, and yet — as we see with the doctors — companies are constantly coming up with new schemes to avoid paying us for the work we do.

An artist who is signed to a record label is an enslaved person.

And we should not compare ourselves to the Queen Beys and Justin Beibers of the West; rather, we should be aware that even in the Westmany artists are exploited.

I tell my arts students that they should spend time in the university studying and imagining a different model for earning income from the arts. For instance, 360-degree contracts should be considered slavery and outlawed. Saying that every future income of an artist is tied to the initial capital invested in their recording is just as ridiculous as a food supplier to a restaurant saying that they should earn 90 per cent of every plate or meal served by the restaurant. Once the food is delivered and paid for, the contract should end there. Artists should pay studios, publishers and marketers separately as bills, not on promise of royalties.

But because my students have been told that education is only for jobs, none has ever taken up my challenge to think about this.

Virgin territory

There is another form of abuse and exploitation of artists that is less talked about because it is less easy to quantify. That is idea theft.

Through platforms like hubs, and through demanding proposals for shows and other performances, institutions exploits the artist’s energy and innovation, then pull the rug from under the artist and run off with the idea. That is why artists will start small concert gigs and before long, corporates, instead of sponsoring those gigs, create their own versions because they can pour in the money to make it big.

And these initially sustainable and indigenous ideas soon turn into monsters. These corporates invade natural parks like Hells Gate to sell even bigger than they should. Not only do they subvert eco-systems, they also crush their conservation opponents with media blitz and economic blackmail. What started as a Kenyan artistic initiative is not only hijacked but also turned into a short term, exploitative and destructive tsunami that dies almost as soon as it is born.

I tell my arts students that they should spend time in the university studying and imagining a different model for earning income from the arts.

Other artists report having given studios or media houses an idea for a show, leaving with a promise that they will hear from the producers. Within a few weeks, they see a bad version of the show they proposed. Is it a wonder that television entertainment is so unimaginative and poorly executed?

But this is the nature of capitalism: like a paedophile, it lets nothing mature and thrive. It instead derives a perverted sense of pleasure from exploiting the vulnerable and destroying budding ideas before the ideas develop to maturity.

Impunity and abuse

This paedophilia is replicated across all institutions. As someone recently said on Twitter, we are often employed on the promise of our ideas, upon which we are promptly frustrated and prevented from developing them.

No institution has escaped change and democratic supervision like the workplace. Workers around the world are succumbing to the abuse of the workplace, whether they are employed or not. Stress levels are high, and sexual bullying, mental illness, addiction and suicide are on the rise. The workplace has become a crime scene, where people get away with abuse and psychological torture.

But what is slightly unique about the arts is that when artists suffer from the same vices, the business world convinces us that this inhumanity is part of the artists’ creativity. That is why the high rate of depression and suicide among artists is not treated as a pandemic. When artists suffer violence such as being shot in clubs and being drugged and raped, we the abused and terrorized Kenyan public thinks that their abuse comes with the artistic territory.

In fact, we even accept that the business community does not treat artists as workers like other employees. Artists are not paid a salary, pension and benefits. They don’t go on leave. They are on the road all the time, or constantly searching for new gigs and new contracts, and never taking a break. The constant toil takes a toll on their minds and bodies and they start to use substances to stabilize their lives instead of getting some rest. Then there is the parasite industry of the paparazzi who make sales from intruding on artists’ lives and selling the details to the world.

The workplace has become a crime scene, where people get away with abuse and psychological torture.

But instead of us criminalizing these vices committed against artists, we let the business world convince us that this inhumanity is part of the artists’ creativity. That is utter nonsense.

Worse, the impunity also makes every new generation join the arts thinking that creativity requires criminality, substance abuse and insanity.

And the business sector has an evil, devilish interest in making literal murder and depravity acceptable for artists. Because of the power of the arts to free people, capitalism cannot let the arts thrive on their own, for the arts will inspire the people to challenge the tyranny of business by looking for alternative business models.

But at the same time, capitalism needs the power of the arts to manipulate people to behave in the interests of business. It puts the arts on a leash, so that the arts go only where capital wants the arts to go — to sedating the masses into accepting exploitation or into buying things.

And the artists, unfortunately, are joined to corporations at the hip and naively celebrate their reliance on corporate sponsorship, without questioning the shrinking spaces and opportunities for the arts to thrive.

And we artists need to understand that this abusive relationship is made possible by the hostility of the church. Instead of the church being our refuge in times of trouble, the clergy side with the state when the state crushes us through bans and censorship that are implemented in the name of morality.

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Politics

Laikipia Land Crisis: A Ticking Time Bomb

Historic land injustices, changing land ownership and use, and heightened competition for natural resources — exacerbated by the effects of climate change — make for a perfect storm.

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Laikipia Land Crisis: A Ticking Time Bomb
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“Here we have a territory (now that the Uganda Railway is built) admirably suited for a white man’s country, and I can say this with no thought of injustice to any native race, for the country in question is either utterly uninhabited for miles and miles or at most its inhabitants are wandering hunters who have no settled home . . . .” Sir Harry Johnstone

There have been significant changes in the pattern of land ownership in Laikipia in the last two decades. These changes are set against a background of profound inequalities in land ownership in a county where, according to data in the Ministry of Lands, 40.3 per cent of the land is controlled by 48 individuals or entities. The changes have not brought about an improvement in the lives of the pastoralists and other indigenous communities who occupied Laikipia before colonisation. These groups — and the Maasai in particular, following their 1904 and 1911 treaties with the British — were forced out and relegated to reserves in southern Kenya to make way for the establishment of large commercial ranches owned by White settlers. Those indigenous inhabitants who remained were pushed by subsequent colonial legislation to Mukogodo in the north of the county, the driest part of Laikipia.

The pastoralists did not recover their land with the end of colonial rule. On the contrary, Jomo Kenyatta, the first president of Kenya, encouraged White settlers to remain after independence and today, some of the descendants of those settlers who decided to make Kenya their permanent home still occupy vast swathes of land in Laikipia County. Those who were unwilling to remain in Kenya under majority rule sold their land to the Kenyatta administration. As Catherine Boone, Fibian Lukalo and Sandra Joireman observe in Promised Land: Settlement Schemes in Kenya, 1962 to 2016,

With the approach of independence, the settler state and the British government stepped in to protect the interests of Kenya’s white land-owners by creating a land market for white settlers who wanted to sell their agricultural holdings, and supporting land values for those who wanted to stay. The buyer of most of these properties was the Government of Kenya, using loans provided by the British Government and the World Bank. Through this process, the Kenyan state acquired about half of the land in the (ex-) Scheduled Areas.

In 1968, under the World Bank-funded Kenya Livestock Development Programme — whose stated objective was “to increase beef production for home consumption and export mainly by subsistence pastoral groups” — the government enacted the Land (Group Representative) Act (Cap. 287) that saw the creation of 13 group ranches in the northern part of Laikipia, which is the driest part of the county. However, well-connected local elites helped themselves to part of the land, excised as individual ranches. There are 36 such individual ranches that should have been part of the group ranches.

Those ranches that were sold to the Kenyan government by the departing British settlers are within the expansive Laikipia plateau. The government later sold them to land buying companies formed by Kikuyus that in turn subdivided them into individual holdings. Examples of such lands include Kamnarok, Kimugandura, Kirimukuyu, Mathenge, Ireri and Endana, among others. The remaining land was gazetted as government land such ADC Mutara and Kirimon, or outspans such as Ngarendare and Mukogodo, which were used for finishing livestock for sale to the Kenya Meat Commission.

Land tenure and use

In the Kenyan context, and compared to other counties, the history of land in Laikipia County is unique, with a diversity of tenure systems each representing a unique system of production. The map below shows the different land use and tenure systems in Laikipia County that include large-scale ranches, large-scale farms, group ranches and smallholder farms.

There are 48 large-scale ranches sitting on 40.3 per cent of the total land area in Laikipia County, 9,532.2km², some of which are still owned by the descendants of the colonial settlers. The ranches  occupy huge tracts of land, the three largest being Laikipia Nature Conservancy with 107,000 acres, Ol Pejeta with 88,923.79 acres, and Loisaba with 62,092.97 acres.

Source: Ministry of Lands

Most of these large-scale ranches — many of which have an integrated economic system that includes livestock, horticulture, wildlife conservation and tourism — were acquired during the colonial period and legislation governing their ownership was taken from the colonial law and integrated into the constitution of independent Kenya under the land transfer agreement between the colonial government and the Kenyatta regime. It should be noted that the Maasai land campaign of 2004 pushing the government to address historical injustices following the forced ouster of Maasai from their ancestral lands in Laikipia, brought to light the fact that some of these ranches had no legal documents of ownership. In an article titled In the Grip of the Vampire State: Maasai Land Struggles in Kenyan Politics published in the Journal of Eastern African Studies, Parselelo Kantai observes,

Ranchers interviewed could not remember how long their own land-leases were supposed to last, were unaware of the Anglo-Maasai Agreement, and, in at least one case, were unable to produce title deeds to their ranches. And when opinion was expressed, it bordered on the absurd: the ‘invaders’, observed Ms Odile de Weck, who had inherited her father’s 3,600-acre Loldoto Farm, were not genuine — not Maasai at all. They were, she noted emphatically, Kikuyus. The Maasai, she said, had willingly ceded rights to Laikipia, had been compensated long ago and now resided happily in some other part of Kenya, far away.

Immediately following the campaign, the Ministry of Lands started putting out advertisements in the print media inviting those landowners whose leases were expiring to contact it.

Twenty-three large-scale farms occupy 1.48 per cent of the land in Laikipia County. These farms are mostly owned by individuals from the former Central Province who bought the land following sub-division by the Kenyatta administration, or through land buying companies, which opted not to sub-divide the land but to use it as collateral to access bank loans.

Source: Ministry of Lands

Smallholdings sit on 27.21 per cent of the total land area in Laikipia County. These farms were initially large-scale farms bought by groups of individuals who later sub-divided them into smallholdings of between two and five acres. There are three categories of farmers in this group: those who bought land and settled to escape land pressure in their ancestral homes, those who bought the land for speculative purposes, and those who bought land and used it as collateral for bank loans. A majority of the first group still live on their farms, practising subsistence, rain-fed agriculture. Most members of the other two groups are absentee landowners whose idle land has over time been occupied by pastoralists in search of water and pasture for their animals, or by squatters seeking to escape the population pressure in the group ranches. In some cases, pastoralists have bought the idle land and have title.

The 13 group ranches cover 7.45 per cent of the total Laikipia land area and are occupied by pastoralists who use them for communal grazing. However, some of the group ranches such as Il Ngwesi, Kijabe, Lekurruki and Koija have also established wildlife conservancies and built tourist lodges.

Laikipia land use.

Source: CETRAD

Changing land ownership, changing landscapes

Since the late 1990s, when agitation for political reforms and a new constitution began in earnest, and in the intervening period, new patterns of land ownership and land use have been emerging in Laikipia County.

Data from the Laikipia County Government indicates that 16 of the 48 large-scale ranches have been internally sub-divided into units of between 3,000 and 4,000 acres, with the land rates due for each sub-division paid according to the size of the sub-division. The sub-divisions are made through private arrangements and do not appear in the records at the Ministry of Lands. There are claims that the sub-divided parcels have been ceded to European retirees looking to acquire land for holiday homes in Laikipia, and to White Zimbabweans. There are also claims that the large, palatial, private residences that have sprung up within the sub-divided parcels are in fact tourist destinations for a high-end clientele in a business that operates outside Kenya’s tourism regulatory framework and violates Kenya tax laws.

In the Kenyan context, and compared to other counties, the history of land in Laikipia County is unique, with a diversity of tenure systems each representing a unique system of production.

Whatever the case, the County Government of Laikipia confirms, “Most of the white settlers buying property are soldiers or tourists who loved the [county’s] climate, its people and natural beauty and want to experience it all over again. Big time investors [sic] in real estate flock the area, either to buy or construct multi-million shilling holiday homes, targeting wealthy European settlers and tourists.”

The Laikipia County Government also confirms that the large-scale ranches have also been leasing training grounds to the British Army Training Unit Kenya (BATUK), adding, “In 2009 BATUK expanded these grounds to 11 privately owned ranches, including Sosian, Ol Maisor and the Laikipia Nature Conservancy.”

Multinationals have also moved in, buying up the large-scale farms, particularly those situated near permanent sources of water, where they have set up horticultural businesses growing crops for export to the European market. The arrival of export horticulture in Laikipia has increased competition for resources as “agro-industrial horticulture, pastoralism and small holder agriculture compete for land, capital, and water, with access to water being particularly hotly contested.”

Absentee owners of smallholdings that have over time been occupied by squatters are also selling their land. With the help of brokers and officials from the Ministry of Lands, the smallholdings are consolidated and sold to individuals and companies who may not be aware that the land is occupied and that the sale could be a potential source of conflict.

Only the group ranches — which are occupied by pastoralists who use traditional grazing management techniques — have not changed hands and remain intact. They are, however, facing pressure from a growing population, intensive grazing and increasingly frequent droughts that are putting a strain on the natural resources.

On the other hand, most of the land gazetted as government land has been grabbed by senior government officials, politicians and military personnel. Of the 36 government outspans, only four remain. Outspans neighbouring large-scale ranches have been grabbed by the ranch managers and such grabbed land has since changed hands and been acquired by individuals.

Where farmers were settled in forests during the era of former President Daniel arap Moi, forest cover was plundered for timber and the forest floor given over to cultivation. When President Mwai Kibaki succeeded Moi, these farmers were constantly under threat of eviction but they continue to occupy the forests to date. There are, however, intact forest reserves where on-going human activity has not had a negative impact. They are used and managed by pastoralists as grazing lands, or managed by conservation groups, or by the government.

Impact of change of ownership on other livelihood groups 

Land deals are coming to compound an already existing multiplicity of problems related to the access, use and management of scarce resources in Laikipia County. Compared to neighbouring counties, in the past Laikipia received moderate rainfall and severe droughts like those experienced in 2009, in 2017 and now in 2021 were the exception. This attracted pastoralists from Baringo, Samburu and Isiolo counties to settle in the county in search of water and pasture for their livestock.

Over time, land pressure in central Kenya also forced subsistence farmers to move and settle in Laikipia, practicing rain-fed agriculture and keeping small herds of sheep, goats and cattle. This has led to competition for space and resources that has been compounded by frequent and increasingly severe droughts in recent years.

“The Maasai, she said, had willingly ceded rights to Laikipia, had been compensated long ago and now resided happily in some other part of Kenya, far away.”

The consolidation of smallholdings belonging to absentee owners where land that had previously been sub-divided into units of between two and five acres is now being merged to form bigger units of 500 acres and above, sold off and fenced is further reducing the land available to pastoralists and to squatters who have been using such idle land to graze livestock and grow crops, leaving them with limited options and leading to an increase in levels of vulnerability as they have to rely on relief food in order to survive.

The smallholder land consolidation process, which is being undertaken by former ranch managers who are brokering for individual buyers, is also blamed for the over-exploitation of natural resources in some areas and their conservation in others. In those areas occupied by farming communities, forest cover has been exploited either for charcoal burning, firewood or timber production as people look for alternative sources of livelihood. In the smallholdings where pastoralists have title, overgrazing of the rangelands due to constrained mobility does not allow the range to regenerate. This in turn has led to the degradation of the land and the emergence of unpalatable invasive species of plants like prosopis that render grazing areas unusable, further compounding the problem of access to pasture in the few areas left for pastoralists to graze.

In the group ranches, the most degraded rangelands are overrun with opuntia stricta, an invasive species of cactus whose fruit is harmful to livestock and has caused “economic losses in excess of US$500 in 48% of households in Laikipia”.

On the other hand, in the large-scale ranches, large farms, consolidated smallholder farms and group ranches where conservation and resource use fall under the intensive management of a few individuals, the availability of resources is assured even during times of stress. However, the availability of resources for one group of users and the lack of resources for another often leads to conflict as those without poach from those who have them. One example is when pastoralists graze illegally in the large-scale ranches whenever there is scarcity in their own areas, leading to arrests and sometimes confiscation of livestock from the pastoralists by government agencies in an attempt to protect the large-scale ranches.

Historical injustices and government failures

Article 60 of the Constitution of Kenya 2010 guarantees equitable access to land and security of land rights. Further, Article 68(c)(1) states, “Parliament shall enact legislation to prescribe minimum and maximum land holding acreages in respect of private land.” Parliament has failed to pass such legislation and, indeed, the government has shied away from addressing historical land injustices in Kenya in general and in Laikipia – where they are most visible – in particular. Policy makers rarely discuss justice in the context of land reform and what has taken place are land law reforms in lieu of the essential land reforms that would confront the material consequences of unequal access to land. As Ambreena Manji observes in her paper Whose Land is it Anyway?,

The consequences of a legalistic approach to land reform are starkly evident in Kenya’s new land laws. First and foremost, it foreclosed debates about redistribution, prioritising land law reform as the most effective way to address land problems and so evading more difficult questions about who controls access to land how a more just distribution might be achieved.

The recent violence that visited death and destruction on parts of Laikipia is a continuation and an escalation of a crisis that first came to a head in May 2000 when pastoralists drove their livestock into Loldaiga farm. Then the Moi government intervened and allowed the pastoralists into the Mt Kenya and Aberdare forests while big ranchers supported the government by allowing some animals onto their ranches.

In 2004, pastoralists again occupied commercial ranches while agitating for the non-renewal of land leases which they believed had expired. This time the Kibaki government used force to dislodge them. However, the question of land leases remains unresolved to date. Outbreaks of violence have become more frequent since 2009, caused by a combination of factors including the effects of climate change and increasingly frequent droughts that force pastoralists from neighbouring Baringo, Isiolo and Samburu into Laikipia in search of water and pasture. This inevitably leads to conflicts with ranchers onto whose land they drive their animals.

Population pressure, from both humans and livestock, is another cause of conflict in Laikipia. The carrying capacity of group ranches is stretched to the limit while it is plenty on neighbouring commercial ranches. Moreover, population migration to Laikipia from neighbouring counties is placing additional pressure on resources.

The sub-divisions are made through private arrangements and do not appear in the records at the Ministry of Lands.

The proliferation of small arms in the county has added to the insecurity; pastoralists from neighbouring counties invade and occupy commercial ranches, conservancies, smallholdings and forests armed with sophisticated weapons. Laikipia pastoralists have also acquired weapons both to defend themselves and their animals and to invade other land.

Politicians have since 2009 also been encouraging pastoralists from neighbouring counties to move to Laikipia on promises of protection in exchange for votes. There are also claims that politicians have been helping the pastoralists to acquire arms and that most of the livestock being grazed in private ranches and farms belongs to senior government officials and politicians who have exerted pressure on the government not to act on the pastoralists.

In the twilight of another Kenyatta government, relations between the commercial farmers and ranchers, the pastoralists and the smallholders remain poor and there is a lot of suspicion among them, with each group acting as an isolated entity. But for how long can the big commercial ranches and large-scale farms continue to thrive in the midst of poor farmers and dispossessed pastoralists?

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