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Thursday, August 2, 2007

Will money solve Africa's Problems? A Story of Former Kenyan Millionaires

By James Shikwati
The $7 million compensation towards injuries caused by live ammunition left by the British to 228 Samburu herders did not stop them from spiraling back to poverty. A local TV crew visited the once “millionaire’s town” and found paupers instead. What lessons do millionaires of Maralal give to Africa?

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The media has documented events that followed the money boom. The South Africa Star wrote: “Samburu tribesmen and their families are here on a spending spree: drinking, roasting meat, buying bicycles and clothes and flirting with women.”

A Mr Mathenge in Nanyuki observed: “… a variety of con men, masquerading as traders, doctors, preachers, fortune-tellers and soothsayers descended on Nanyuki moments after news spread that money has arrived…” The Standard reported in 2006: “The newly made millionaires were lured by what they considered modernity. Many owned several cell phones, TV sets, and vehicles.

Today, none of these items exist in Maralal, if they do they are in a state of disrepair.” The traditional approach of addressing African problems through the lenses of “big money” misses the point.

The Organization for Economic Corporation and Development (OECD) countries has pumped an estimated $640 billion to Sub Sahara African countries since 1960.

The G8 countries committed $60 billion towards fighting diseases and lately China has dedicated $5 billion in the next three years to Africa. I propose that Jeffrey Sachs, Bono, Geldof, Bill Clinton and other proponents of “big money will fix Africa”, take a short walk to Maralal.

If money was the key to solving problems, banks would send agents on the streets to supply money to afflicted individuals. Banks only offer money to individuals who successfully translate their “problems” into “opportunities.” Money in itself is neutral.

Big Money viewed as capital, has led to strategists (who depict Africa as trapped in a cycle of poverty) to argue for massive external inflows of big money as the only means of escape from poverty.

Viewing money as a receipt for value, a creation and resultant effect of exchange between different parties; offers a chance to translate African problems into opportunities.

The herder’s predicament points at the fact that what Africa needs urgently is not money. We need a mindset that will engage in a rational response to the challenges that face the continent. I refer to this type of mindset as “capital,” without which money or external solutions to the continent will come to naught. This explains in part the paradox of the continent being resource rich and full of poor people.

Investing in a “mindset” as capital calls for individuals to be creative from a commercial perspective on how they address their daily challenges.

For example, if Kenyan architects visited Kibera, and came up with a design of housing units that guarantee safety, sanitation and can be moved whenever the government wants to relocate people, they will have solved a slum problem.

It will make sense for banks to offer loans towards such a venture than simply order banks to build houses for the poor. The architects and the bank will both make millions of shillings turning a problem into an opportunity.

The actual worth of money lies in “exchange of value,” and that is what we should be pushing Africans to do at village, national, continental and international level. The lesson from Samburu is that money is just paper, it’s the value it guarantees that Africans ought to go for.

Unless the capital in form of the African Human Mind is exploited, all the do-good projects are destined to join the “bubble millionaires.”


Ark-888 said...

Great article Branded, very interesting. The mind set that often determines economic development is some thing that has always interested me. It is some thing that I think is very overlooked by every one, especially in Africa, when it comes to economic development.

branded said...

Thanks Ark-888 for you comments. When publishing this story, apparently another Kenya lady who had won a state of the art Mercides Benz lost all her fortunes to her husband just because she had no idea on what to do with the money that she had gotten from a sale from that Merc. She is now back to rugs and pleading with the government to save her from the agony.

Ark-888 said...

It is a more common problem then most people seem to think it is. Interestingly enough, before the 17th century, the people of Scotland had the same problem. They landed up spending all their money on alcohol and "merry making" as soon as they got it. It was only in the 17th to 18th century that a social revolution in the country happened that was largely lead by protestant churches. The churches encourage people to save and set up saving and building funds.

The saving revolution was so successful that even to this day Scots are renowned for being thrifty and Scotland is now home to some of the largest banks in the world. In fact the industrialization of Scotland only happened after people started saving their money and learnt how to look after it by investing it or putting it in a bank or building

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