I woke up this morning and started flicking through The Post, the only independent daily here, as I do most days. However, I almost spat my god damn coco pops out when I came across a large article on page 6. It was a little unsettling, I have to admit, to read in the national news that the chairman of the organisation I am consulting (the Association of Microfinance Institutes of Zambia) had been suspended for two weeks so that corruption charges against him can be investigated.
Mr Ltombi Kawana is the friendly, smiling, larger than life chairman of AMIZ (anyone seen the Last King of Scotland? only joking), who I have been working closely with for the last six weeks. He heads up the board of directors, who I meet with monthly to discuss my findings. I work for the UNDP of course, but the AMIZ board are the beneficiaries of my study and essentially the key to my whole project. He in particular has been consistently enthusiastic, and one of the main champions of what I am doing. So what exactly has he been accused of?
Microfinance is the simple business of giving small loans to people who have no other access to finance, so they can build a future for themselves. The recovery rate is pretty bad, however, with default rates anything between 15-30%. This means it can be very tempting to just give loans to your friends and relatives, without expecting anything back - the missing money can usually be hidden in the mountain of other bad debt.
Mr Kawana has just been sent on two weeks forced leave after it was discovered that he had (allegedly) given out plenty of loans to relatives, which is against company policy. On top of that, in some cases up to four loans have been given to the same relative under slightly different names, which is DEFINITELY against company policy. And, as you might expect, none of these loans have been paid back or serviced. The press are aggressively incriminating him so far, with Mr Kawana unable to put up much of a defence (other than his claim that these charges are a retaliation, by certain members of staff, to his discovery that they are corrupt).
So what now? The formal investigation has begun. He has to lie low and stay away from Pride Zambia, the microfinance institution of which he is CEO, while the authorities gather evidence and investigate the charges. At best, they will find that he has not been too naughty and he can continue doing his job (I secretly hope this happens; I like this guy and would welcome assurance that I have not misjudged him). Alternatively, he is found guilty, fined and sacked, and we have to get a new chairman. At worst, the investigation roots out a dirty, nasty, sick, infested underbelly of corruption in microfinance in this country and the whole industry goes to SHIT. Whatever happens, I'll keep you updated!
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2 comments:
Blimey. The doodoo has most certainly hit the fan. I'm guessing the original investment in the micropayment industry comes primarily from international aid. Lack of transparency and a perception that many African governments are corrupt are constantly cited as reasons why charitable donations are not higher in the U.K. I don't know why we find it so hard to accept governments and their agencies can be corrupt - its endemic in the west, so why not Africa?
But, if we cannot - or should not - invest in government because government is inherently corrupt, and international aid agencies simply waste money, what's the solution? The World Bank would argue that it has the answer - the distribution of aid being contingent on certain changes in the way government operates. But, unfortunately, the World Bank has a barely veiled ulterior motive - the protection of transnational corporations in their insatiable desire to colonise Africa, exploit their resources, and avoid the guiding hand of local or international law.
The other alternative is to make International Aid agencies work harder, more efficiently and effectively. An adoption of 'commercial' or 'business' methods is always cited as the way to do this. But, I've worked in a big aid agency, and I can tell you there is massive cultural opposition to this kind of change. Many of these organisations were founded on principles, or truths, that are in total opposition to business - love, altruism, belief in god. The people who work at these organisations don't do it for money, or even because they feel its the right thing to do - they do it because they feel its a divine calling. Not something you tend to find in the commercial sector, and not something the methods or business can easily embrace. The language of business is incompatible with the language of altruism. Thats my firm belief.
So, international aid is in crisis, all governments are corrupt and we continue to fund both.
Perhaps the way forward is to encourage, lobby, persuade or incentivise successful economies in Africa to take the lead in showing the way to their neighbours. African nations should be working together, sharing knowledge, resources, cutting bi-lateral and multi-lateral deals, forming unions, and fostering a sense of African community, of one-ness. I have no idea whether this is already being done, whether it was tried, and failed, whether local communities are incompatible. But, I think there's something incredibly powerful in the idea of a co-ordinated Africa, not a single nation, or any of that twaddle, but an African economic collective, built on the simple premise that nations are stronger together, rather than apart.
Mr buffer,
thanks for your comments. i'm glad you liked the photos too; although with net connection speeds slower than scotland's run rate in the world cup it takes serious patience to upload them to flickr. but nevertheless i'll try and join the beautiful online community you have created.
i agree with you on many counts; although i think that the 'business attitude' that charities could benefit from doesn't have to be money-driven: it can be efficiency-driven instead. My hope is that aid agencies can become better at figuring out exactly what they are trying to achieve and become more accountable for achieving it...rather than setting vague goals that result in vague achievements. But i agree that development culture has a LONG way to go.
I think it would be a wonderful thing to foster african co-ordination; it would do a lot for the continent. But sadly, in practice everyone is out for themselves. South africa is the economic hub of the region; and its companies develop themselves ruthlessly all over sub-saharan africa - just as as european and american multinationals have done in asia and south america in the past. Most african nations are obsessed with exporting to other markets to drive their own growth, and rather less obsessed with helping out their sister nations for the good of the region. But there are some positive partnerships, like the COMESA union of southern and eastern africa, that could become strong once the individual nations have found their feet. One day, many years from now, they could be the EUs of the south...
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