Life In The Sticks

I am a tree farmer. I have planted thousands of trees on a small piece of dry land somewhere on the windswept plains of Laikipia. I thought trees would be a good way to rejuvenate a piece of land that had been denuded by charcoal terrorists who had destroyed every single living tree within their abominable reach as most of the land owners in that area were absentee landlords. What I didn’t count on was that a simple project like planting trees, on a nondescript piece of land in a rural backwater, would turn out to be the most humbling experience of my life.

 

For starters, rural settings have an entirely different socio-economic dynamic than that of the urban setting to which a born and bred city dweller like me could ever have imagined. The minute I started to put up a fence, local youth appeared and requested to be hired. I had the good fortune to get a fence erecter from a different town who was quite familiar with how local dynamics played out and he hired a couple of them for good order. One of them ended up staying on as the farm caretaker and that is when the rain started beating on me. Let me first start by cautioning that this is my experience, my story and therefore my conclusions all of which I am completely entitled to own. In my experience, the problem with hiring local labor is that there is a sense of entitlement that local youth have, which entitlement means that they don’t have to work that hard to deliver their contracted labor. “Mama, hapa tunalipwa kazi kwa siku. Na siku ni kutoka saa mbili mpaka saa saba,” was how I was informed that wages were paid daily and the daily rate started at 8 am and ended at 1 pm. Right. Lesson 1: local labor was a seller-dictated resource. Promptly after that, the Member of the County Assembly (MCA) got my number and called me inviting me to a “small tea to raise funds for his son who was going to a university somewhere in the Rift Valley.”

 

I wouldn’t have picked this man out from a pod of whales if I stumbled upon it. Quite frankly, he could say the same thing about me. So I said the first thing that came into my umbrage-filled mind, “Well, where I am from men don’t ask women to support them financially, you don’t know what problems I have.” This smooth operator didn’t miss a beat, choosing to neatly sidestep that gender stereo based swipe. “Today it’s my turn, and tomorrow I will help you.” Gah! I mumbled some weak response and hung up. Lesson 2: telephone numbers of perceived wealthy city folks were highly valued currency in these parts. Which leads us to lesson 3: putting up a chicken wire fence held up by treated poles = massive wealth.

 

A few months later, I had fired the local caretaker as by now he had settled down neatly into his role as a labor assassin. How? As we were in the process of planting trees and needing to dig holes for the trees, he had created a cartel of laborers who would demand a pre-determined fee per hole. Then he realized that he could hire students for half the fee and arbitrage on the price differential. Now it’s not supreme powers of deduction that helped this telephone farmer discover that she was skirting on dangerous labor law infractions. No. It was the oldest form of skullduggery known to man: the disgruntled laborers blew the whistle and sang like canaries once they were cut off from the gravy train. Lesson 4: If you have a farm in County W, hire your caretaker and all subsequent workers from Counties X,Y and Z. Mix and match. Divide and rule. The colonialists knew exactly what was needed to tame the African native into a self-preservative existence.

 

The cherry on the icing of this welcome-to-rural-life soliloquy was a text message that I got from the local parish priest. (Please refer to lesson 2 above about mobile numbers being currency) “Dear madam: we are having a harambee next June and your contribution would be highly appreciated.” To which my prompt response was: “Dear Father, I am yet to receive a ‘welcome to this parish’ message from you. It would be nice to be welcomed with anything other than a request for money.”

 

Okay, fine. I didn’t send that text back. But I certainly thought those exact thoughts. I just ignored it and I am preparing for a case to answer when I get to the pearly gates. But it did lead to my final lesson number 5: the Nyumba Kumi initiative is a very urban construct. In the windswept plains of Laikipia, you couldn’t operate a stealth bomber without folks over 100 miles yonder telling you the thread count on your pilot jumpsuit. If you’re thinking of buying land and starting a new life out in the sticks, forget anonymity. It doesn’t exist.

 

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Twitter: @carolmusyoka

Mpesa is a key economic engine

I have a little farm on the sweeping eastern Laikipia plains that has me visiting at least once a month. The singular cause of blinding migraines for the many telephone farmers is farm worker fraud. Those fellows will find a way to skim money, farm inputs or farm outputs at any given opportunity and trust me, as soon as you plug one leak they’re ten steps ahead of you preparing for the next scam. So one has to, as a telephone farmer, accept a certain level of pilferage as part of the business-as-usual operations, or opting to move and reside permanently in the farm. Irritated and exhausted by one certain input request, I set up a system that didn’t require the farm worker’s intervention. I got a trustworthy boda boda operator in Nanyuki (where trustworthy is a fairly fluid virtue) to be purchasing the input on my behalf. But I don’t send him the cash. He goes to the outlet, sends me the “Lipa Na Mpesa” till number where I pay and he takes the goods together with an electronic receipt to the farm. I specifically chose the outlet for those two reasons: they have an mpesa till number and they issue electronic receipts. I then pay him, using mpesa, for delivery of the goods and have peace of mind, knowing full well that another scheme is likely being hatched at the farm since I blocked what had been a lucrative cash cow for the workers before.

Two things that are critical to the urban telephone farmer: a local boda boda “guy” and mpesa. While I don’t have any data on the impact that boda bodas have had on the transport economy – which must be undeniably high – more data on mpesa is readily available. In the latest published Safaricom financials for the half year ended 30th September 2016, the company had 26.6 million registered customers out of which 24.8 million or 93% were mpesa customers. However, a more accurate number is yielded by looking at the 30-day active customers which registered as 23 million, with 17.6 million active mpesa customers or 76.5% of total active customers. Safaricom made more money from mpesa at Kshs 25.9 billion than it did from mobile data, which generated Kshs 13.4 billion. Mpesa revenue was equivalent to 43.3% of the voice revenue data of Kshs 45.7 billion. In simple words, mobile money is no bread and butter; it’s the cream with a cherry on top!

What were these mpesa customers doing, you ask? Well telephone farmers like me were a piddly fraction of the mpesa volumes. Three quarters of the total Kshs 25.9 billion in revenue that Safaricom received from mpesa was from what they call “bread and butter” business, which are the person-to-person transfers and withdrawals: John sends Mary a thousand shillings, who promptly goes to an agent to withdraw the same in cash and purchase food items for the house. Telephone farmers like me are to be found in what Safaricom calls “new business” which accounts for 24% of their mpesa revenue or about Kshs 6.2 billion.
New business includes customer to business (individuals paying for services using mpesa), business to customer (businesses sending money to individuals for example Kenya Tea Development Agency paying farmers their tea bonuses), Business to Business (Distributors paying a manufacturer for goods delivered) and the rapidly expanding Lipa Na Mpesa that has saved many urban dwellers the pain of having to send cash to purchase items via fundis, rogue relatives and even more rogue workers. But mpesa revenue aside, it is the sheer transaction volumes that are simply eye watering. By September 2016, mpesa had transacted Kshs 3.2 trillion. Kenya’s Gross Domestic Product or GDP, according to World Bank figures is US $ 63.4 billion or Kshs 6.34 trillion. The mpesa volumes are virtually 50% of Kenya’s GDP. However, hang on to your hat please as there is some double counting in the mpesa transaction volumes since they include deposits, withdrawals, person-to-person transfers and the business volumes. The bigger question is whether mpesa then poses a systemic risk in the event it is out of commission for whatever reason.

Firstly, mpesa is a methodology of transferring cash virtually. The actual cash sits in various mpesa trust accounts in Kenyan commercial banks. The bigger concern is not whether one’s funds are safe if mpesa goes down, it’s how to access a system that will release those funds which are sitting safely in a bank. Central Bank data from 2014 demonstrates that while mobile money volumes are extremely high at 66.5% or two thirds of the national payment system, they only account for 6.6% of the throughput value. It’s definitely a case of more bark than bite where systemic risk proponents are concerned.

But having said that, the attraction to track the mpesa movements from a tax collection perspective goes without saying. Even though the values may be low, mpesa provides an excellent opportunity for the taxman to bring in smaller businesses into the taxpayer net as each transaction has an electronic signature and trail. Designing and applying resources to create that tracking framework may perhaps be where the challenge lies.

That mpesa has changed lives goes without saying. We live in a country where one can literally take a trip from Mombasa to Malaba carrying zero cash, zero plastic card and with just her phone be able to eat, drink and seek lodging for that entire trip. The growth of the Lipa Na Mpesa payment points was 73% year on year in the half-year 2016 Safaricom financials. This means that there is rapid uptake by commercial establishments of the mpesa payment option, which quite honestly presents a better cash flow option than credit cards as there is no lag time between customer transactions and when the funds are deposited into the business account (typically 2-3 days in the case of credit cards).

Mpesa’s metamorphosis is not inclined to stop here and a banking licence may end up being required at the rate mpesa is transforming.