Connect with us

Business

Why group inequalities can become ticking time bomb : The Standard

Published

on

Loading...


With the benefit of hindsight, one can observe that the French revolution was fuelled by inequalities veiled as class struggle.
In July 1789, the French public revolted against the rule of Louis the 16th and his infamous queen, Marie Antoinette.
The French nation was organised into estates. The clergy and nobility were the first and second estates respectively, wealthy from large land ownership, tax immunity and legal barriers that protected their businesses.
The peasants, who comprised the third estate, were allowed to own land and produce but paid huge taxes and were disgruntled by the fact that they could not carry out certain lucrative businesses.
These misgivings were exacerbated by the enlightenment at the time espoused by the writings of John Locke, Voltaire, Jean- Jacques Rousseau, Denis Diderot among others.
Inequality and an awareness of a better alternative is a potent ingredient for social change.
The deadly effect of inequality was first espoused by Plato. “We maintain that if a state is to avoid the greatest plague of all — I mean civil war, though civil disintegration would be a better term — extreme poverty and wealth must not be allowed to arise in any section of the citizen-body, because both lead to both these disasters.”
This assertion has long formed the foundation of the economic thought that inequality leads to conflict.
The position was affirmed by the French political scientist Alexis de Tocqueville in 1835: “Remove the secondary causes that have produced the great convulsions of the world and you will almost always find the principle of inequality at the bottom.
Either the poor have attempted to plunder the rich, or the rich to enslave the poor. If then, a society can ever be founded in which every man shall have something to keep and little to take from others, much will have been done for peace”
New research, however, suggests that inequality alone cannot create conflict.
Violent conflict
Countries, where there is high inequality, do not experience more conflict than countries with little or no inequality.
It’s a fact that by the time of the French revolution happened, King Louis had reduced the inequality gap by allowing peasants to own land.
Political economist Christopher Cramer did a paper for the UN entitled Inequality and Conflict. In the paper, Cramer argues that inequality may not be a cause of conflict and may not perhaps be necessary or sufficient for violent conflict.
Rather, some characteristics of this inequality, other than inequality itself, may be more relevant; and perhaps something in the intensity of inequality, measured in various ways may be relevant to the outbreak of violent conflict. The studies done by the World Bank has given a further understanding of the subject.
It found that inequalities between groups defined by religion, ethnicity, or regional identities are linked to a significantly higher risk of armed conflict.
This is group-identity inequality which is also known as horizontal inequality.
The French public was not moved by individual inequalities, rather by class inequalities between the peasants and the nobles which had become rigid group identities for centuries.
This was, in fact, true in Russia when over a century later, the peasants organised the famed October revolution and threw out the Tzar and his nobles.
Group inequalities defined along geographical lines would also play a part in the disintegration of the Soviet Union in 1991.
The theory equally holds true for African conflicts.  It is evident in the conflicts in Somalia, Nigeria, Rwanda and Sudan.
In Nigeria, maternal mortality rates in the northeast of the country are nine times those in the southwest.
This is driven by the fact that the southwest is home to the educated and wealth Igbo tribe while the north is home to the Muslim Hausa who never adopted the white man’s education.
President Barrack Obama during his speech at Kasarani Stadium when he visited Kenya in 2015 said: “Today, a young child in Nyanza Province is four times more likely to die than a child in Central Province – even though they are equal in dignity and the eyes of God.
A girl in Rift Valley is far less likely to attend secondary school than a girl in Nairobi.”
These realities have existed for long, entrenched by politics of ethnicity and neo-colonial policies like the sessional paper number 10 of 1965. The paper advocated for focused development on areas with the highest agricultural productivity.
The result of these inequalities has seen tribal clashes, xenophobic attacks at the coast by the Kaya Bombo militant group, post-election violence of 2007 and the enthusiasm for sections of the country to discuss secession after the 2017 elections.  
There has been progress to incorporate the marginalised into the political system through strategic political appointments.
Economically, devolution is expected to distribute resources to areas that traditionally did not have access to resources at the centre. But this is slow and the gap remains overtly visible.
In 1789, despite the efforts of King Louis XVI to improve the well being of the peasants and his subjects generally, his bankruptcy and failed fiscal policies led to a drought and hunger which in the end triggered the revolution.
As with all other children of divisive political strategy, inequality is highly flammable and a small economic shock or political trigger might kindle it beyond control.
-The writer is an independent analyst

Loading...

Group inequalitiesGroup work



Loading...

Business

BCCI: The bank ‘that would bribe God’

Published

on

Loading...
Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.

BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.

It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.

BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.

The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.

He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.

In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  

BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.

The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.

The bank had five branches countrywide and panic had gripped depositors on the state of their money.

Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.

It sent statements assuring depositors that their money was safe.

The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.

It was said that contact between CBK and Abu Dhabi was “likely.”

This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.

The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.

And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.

“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.

BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.

“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.

Loading...

A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.

“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.

CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.

This was meant to stop Kenyans from making panic withdrawals.

For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.

In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.

Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 

The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.

Criminal culture

In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).

The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.

This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.

Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.

“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.

These included the Third World Foundation for Social and Economic Studies, a British-registered charity.

“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.

BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).

Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).

[email protected]    

Monitor water pumps remotely via your phone


Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

Loading...
Continue Reading

Business

East Africa celebrates top women in banking and finance

Published

on

Loading...

The Angaza Awards for Women to watch in Banking and Finance in East Africa took place Online via Zoom on 8th June 2021.

The event was set to celebrate the top 10 women shaping banking and finance across East Africa. The 2021 Angaza Awards, which will be a Pan-African Awards program, was also announced at the event.

Key speakers at this webinar were Dr Nancy Onyango, Director of Internal Audit and Inspection at the IMF; and Gail Evans, New York Times Best Selling Author of Play Like a Man, Win Like a Woman and former White House Aide and CNN Executive Vice President.

Dr Nancy Onyango advised women to deep expertise in their fields, spend time in forums and link with key players in that sector.
“Gain exposure with other cultures by seeking for employment overseas and use customized CV for each job application,” said Dr Onyango.

According to Gail Evans, women should show up and be fully present in meetings and not be preoccupied with other issues.
“Be simple and avoid jargon. Multi-tasking only means that you are mediocre Smart people ask good questions in a business meeting. Most women face drawbacks due to perfectionism, procrastination and fear of failure, said Evans.

She advised women to play like a man and win like a woman, be strategic, and intentionally make their moves to get to the top.

“For us to pull up businesses that have been affected by effects of COVID-19 pandemic, we need to re-invent business models, change the product offering and make more use of digital platforms,” said Mary Wamae Equity Group Executive Director.

Mary Wamae emerged top at the inaugural Angaza awards( East Africa) ahead of other finalists.

While women continue to excel in banking and finance, the number of that occupies top executive positions is still less.

“There is a gap for women occupying C suite level and it continues to widen in the finance sector. At entry level, there is still an experience gap for women,” said Nkirote Mworia, Group Secretary for UAP-Old Mutual Group.

She said that at the Middle Management level, women do not express their ambition. For this reason, UAP-Old Mutual has developed an executive sponsorship program to help women get to the next level.

Mworia added that most women hold the notion that top positions in management have politics and pressure.
“One needs leadership skills and not technical expertise to get to the top,” said Mworia.

According to Catherine Karimi, Chief Executive Officer and Principal Officer of APA Life Assurance Company, women need to focus on the strengths and natural abilities that they already have.

Loading...

“Take risks and raise your hand to get to the high table. Find mentors along the way and develop your own brand and not compare yourself with others Focus on your strengths because it will make you move faster in the career ladder,” said Karimi.

Lina Mukashyaka Higiro, a Rwandan businesswoman and chief executive officer of the NCBA Bank Rwanda since July 2018, has three lessons for women who want to excel in banking and finance.
“Always spend at least 20 minutes each day reading, seeking genuine feedback from other staff members and widen your network,” Higiro told the webinar.

Women picked for Angaza awards

Mary Wamae, Executive Director, led this year’s Top 10 Women in Angaza Awards, Equity Group (Kenya)(2)Catherine Karimi, Chief Executive Officer, APA Life Insurance Company (Kenya)(3)Lina Higiro, Chief Executive Officer, NCBA Bank (Rwanda)(4)Elizabeth Wasunna Ochwa, Business Banking Director, Absa Bank (Kenya)(5)Joanita Jaggwe, Country Head of Risk and Compliance, KCB Group (South Sudan)(6) Millicent Omukaga, Technical Assistance Expert on Inclusive Finance, African Development Bank (Kenya)(7)Emmanuella Nzahabonimana, Head of Information Technology, KCB Group (Rwanda)(8)Judith Sidi Odhiambo, Group Head of Corporate Affairs, KCB Group (Kenya)(9)Rosemary Ngure, ESG & Impact Manager, Catalyst Principal Partners (Kenya) and(10)Pooja Bhatt, Co-Founder, QuantaRisk and QuantaInsure (Kenya).

The Kenyan Wallstreet, a financial media firm, partnered with Kaleidoscope Consultants to raise awareness of seasoned women shaping and influencing the sector through their organizations.

The Angaza Award criteria included assessing the applicants’ area of responsibility and contribution to firm performance. Professionals in Banking, Capital Markets, Insurance, Investment Banking, Fintech, Fund Management, Microfinance, and SACCOs were invited to submit their applications or nominations via the Kenyan Wallstreet Award Web page.

ALSO READ: Angaza Awards Top Finalist; Mary Wangari Wamae

Loading...
Continue Reading

Business

IFC in New Partnership to Develop Affordable Housing in Mombasa County

Published

on

Loading...

NAIROBI, Kenya, Jun 14 – International Finance Corporation, a member of the World Bank Group, has signed a new deal in support of affordable housing in Kenya.

The corporation has partnered with Belco Realty LLP, to develop a mixed use affordable living complex that will consist of 1,379 residential units and over 4,500 square meters of retail and commercial spaces in Kongowea, Mombasa County.

Together with the Kenyan firm, IFC says the partnership will help meet surging demand for housing in Kenya.

Under the agreement, IFC will help identify suitable international strategic partners to invest equity of up to $12 million, or Sh1.3 billion in Belco and to provide the company with the necessary technical support to develop the project.

The development, known as Kongowea Village, will be developed to foster inclusive and affordable community living within the city.

Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa says the project, which will be located on eight acres within the heart of Mombasa city, will aim to be a catalyst for wider city regeneration.

The project will be developed to meet IFC EDGE certification requirements and will incorporate the latest technologies in passive cooling, energy efficiency and water conservation to support sustainable urbanization.

 Kongowea Village is expected to create 1,160 jobs and business opportunities during the three-year construction period and many more after completion of the project within the themed retail arcade.

Loading...

 “Access to quality housing is a growing problem in Kenya and across Africa,” said Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa.

Advertisement. Scroll to continue reading.

“Developers often target the high end of the market, but this project is aimed squarely at the lower-income bracket. Helping Belco identify the right partners for this project is expected to attract more developers to Kenya and other parts of Africa to help meet rising demand for housing.”

 IFC‘s engagement with Belco will help Kenya support its rapidly growing and urbanizing population by increasing access to affordable housing. The problem is similar across most of Africa, where population growth and demand for quality housing are combining to outstrip supply.  We are pleased to partner with a company such as Belco that is committed to contributing to solving this challenge,” said Emmanuel Nyirinkindi, IFC‘s Director for Transaction Advisory Services.

 IFC’s partnership with Belco is part of its broader strategy to support better access to affordable housing in Kenya.

In 2020, IFC invested $2 million in equity in the Kenya Mortgage Refinance Company (KMRC) to help increase access to affordable mortgages and support home ownership in the country.

Loading...
Continue Reading
Advertisement
Loading...
Advertisement
Loading...

Trending

Kenyan Tribune