Making Money Pay: Cash Transfers in Kenya

Cash transfer as part of a programme in Kenya. Photograph by Colin Crowley.

Instead of handing over billions of dollars to bureaucrats to devise ways to help the world’s poor − and make aid vulnerable to ‘leakage’ in the process − why not just send one-time disbursements of cash directly to recipients so that they could lift themselves out of poverty?

Last month, I travelled to western Kenya to interview some of the recipients of cash transfers in those communities. (My research was funded by GiveWell, a non-profit organisation that vets the work of international charities).

“People used the money in different ways, to pay their children’s school fees, to buy a motorbike, to build a new house like you see my neighbour has done here,” one recipient explained. “I think everybody has used it well according to their own needs.”
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This is precisely what makes cash transfers different, and superior, to traditional forms of aid, proponents say. In an article for the Cato Institute Journal, former Lead Economist in the World Bank’s research group, Branko Milanovic, wrote: “By delivering aid in cash, we do not tell poor people what they should do…and how they should spend their money. We just allow them to decide, without paternalism, on their own. And we improve, ever slightly, their condition.”

Read the full article at Think Africa Press.

Knowledge is Power: World Bank to Chart Africa’s Minerals in ‘Billion Dollar Map’

Think Africa Press

Nairobi, Kenya– Last month, the World Bank announced an ambitious new project aimed at helping African governments earn a better price for their natural resources and accelerate the pace of mining across the continent.

Dubbed the ‘Billion Dollar Map’ for its meteoric price tag, the decade-long initiative will scour a century of historical research into the continent’s mineral makeup and collate it in a public database. The project will then finance governments to conduct exploration to fill in the gaps.
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The need for better research into the continent’s minerals is clear and urgent. When it comes to negotiating contracts, knowledge is power, and African government’s uncertainty over the levels of the resources they possess has contributed to them signing some hugely unfavourable deals.

According to a 2013 report by the think tank Global Financial Integrity, African countries have lost between $600 billion and $1.4 trillion in net resource transfers over the past 30 years.

Read the full story at Think Africa Press.

Risky Business: Is China Wavering in Africa?

Think Africa Press

South Africa’s president arrives in Beijing for a Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC). Photograph by GovernmentZA.

Chinese companies and banks were once seen as bold and fearless as they invested in countries Western investors deemed too risky. But this may now be changing.

By Jacob Kushner

In 2007, when two Chinese state-owned companies struck a deal with the Congolese government to build the biggest mine the country had ever seen, all involved were riding high. In a mega-deal originally worth some $9 billion, Sinohydro and the China Railway Engineering Corporation (CREC) would gain access to 6.8 million metric tons of copper, the future profits of which were to underwrite the prior building of hospitals, roads and other infrastructure.
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At the time, the China’s involvement in Africa was booming and the Sicomines deal embodied much that was symptomatic of Sino-African relations: it was massive-scale, involved vast infrastructural construction linked with similarly vast mineral resources, and was taking place in a country many other investors would have deemed too unstable.

It was not long, however, before confidence in the deal began to wane, especially amongst the deal’s financiers, China’s Export-Import Bank (Exim).

Read the full article at Think Africa Press.

Kenya’s Failing Bid to be East Africa’s Next Resource Hub

Think Africa Press

Kenyans are abuzz with hope that its newly-discovered resources will enrich the country, but is Kenya prepared to make the most of its natural wealth?

Flaring in the night at a oil site in Turkana County, Kenya. Photograph by DEMOSH via Think Africa Press.

Kenya, a long time outlier in a continent known for its mining and oil, is now facing the prospect of a natural resources boom itself. And Kenyans are abuzz with hope that the country can harness its newfound mineral wealth to propel East Africa’s largest economy even further.

But while these discoveries could provide a significant source of revenue for Kenya, disorganisation within Kenya’s mining ministry, and controversy surrounding one Canadian company in particular, raise concerns that Kenya may be unprepared to regulate and benefit from its forthcoming resource surge.

Read the full article as it appeared at Think Africa Press.

Corruption in the Congo: How China Learnt from the West

Think Africa Press

To single out Chinese companies for entering into shady business in the DRC is to miss a fundamental point: Western firms have been at it for centuries, and still are.

Last January I was in the Democratic Republic of Congo (DRC) to research Sicomines, China’s controversial $6.5 billion megadeal in which Chinese companies will construct roads, schools and hospitals in exchange for mining and untold billions of dollars worth of copper and cobalt with Congo’s state mining agency.

On a sunny morning in the south-eastern mining city of Lubumbashi, I called a Congolese official to pose some hard questions about the deal – particularly, what happened to the $350 million ‘signing bonus’ that was handed over by the Chinese. But I hardly got a word in before his response betrayed his fear as to the more sensitive concern on his mind: “Is this about COMIDE?”

It wasn’t, of course. But perhaps it should have been, because the corruption scandal that burns hottest among Congolese officials today has nothing to do with the Chinese. In 2009, the International Monetary Fund started a $551 million loan to improve the DRC’s business climate through a series of projects. As a condition of the loan, Congo’s government would have to make all its mining contracts and transactions public.

So it must have come as a surprise to the IMF when Bloomberg revealed the DRC had sold its 25% stake in a copper mining venture called COMIDE SPRL – a trade the Congolese government hadn’t disclosed. The IMF responded to the news by refusing to renew the loan, meaning the DRC will essentially forfeit an incredible $225 million because a few Congolese officials didn’t want the world to know what they were up to.

Read the full story as it appeared at Think Africa Press.