5 Reasons Why Facebook’s New Cryptocurrency ‘Libra’ is Bad News for Africa

For many emerging ‘mobile first’ consumers from East Africa the internet is indistinguishable from Facebook and the internet does not exist outside of this singular social network.

Facebook is plotting a new cryptocurrency dubbed ‘Libra’ for its vast social network scheduled for release in 2020. Libra coin, a virtual currency, will be governed by Libra association, a conglomerate of 28 American and European corporations who will decide everything from who can join the network, process transactions and how much currency will circulate.

As an African, it is my opinion that the peoples of Africa, its governments and central banks should be concerned, because we risk ceding more control, from the little we have now, to a digital colonial version of the internet.

That is because, for many emerging ‘mobile first’ consumers from East Africa the internet is indistinguishable from Facebook and the internet does not exist outside of this singular social network.

In a future post, I will write on how Africa can redress this imbalance. 

But today, I have 5 Reasons Why Facebook’s New Cryptocurrency ‘Libra’ is Bad News for Africa.

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How PayPal & the UK Government are nudging Kenyan Online Workers to Bitcoin

Kenyan online workers, PayPal and the UK Government are entangled in a mess that is paving way for Bitcoin and cryptocurrencies

A spat between the UK government, PayPal and Kenya freelancers has got everyone mixing up issues.

“Thousands of jobless graduates from Kenya who help lazy university students in developed countries to cheat academically could soon be forced to find something else to do after the UK government started clamping down on essay mills.

On Thursday, international digital money transfer service, PayPal, announced it was withdrawing its services to essay-writing firms selling to university students. This was after weeks of pressure from the UK government, which insists stopping payments for essay mills would go a long way in beating academic cheating.’ Daily Nation

There are 3 parts to this story.

First, the British Education Secretary, Damian Hinds, says when UK students tap cheap labor in Kenya for their assignments, it is unethical and cheating. 46 university vice chancellors last year wrote to Hinds, calling for the banning of cheating websites.

Secondly, PayPal is caught up in the wrangles for facilitating online payments between UK students and Kenyan freelancers. PayPal has come under pressure to stop processing these payments and declared it will not support unethical academic behaviour by UK graduates. Some people have suggested, cryptocurrency may serve well as an alternative for Kenyan freelancers.

Finally, in Kenya, we are all caught up debating whether it is cheating or job creation, as thousands of graduates are dependent on the thriving business for wages and employment.

This case is a glimpse of tectonic shifts at play on the future of Africa, its youth population and the web economy. It is easy to miss the forest for the trees.

To get at the heart of the matter, we need to go back to 2009 when it all began.

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How Nairobi’s Matatus Defied the Will of Kenya’s Cashless Policy Makers

Nairobi’s failed cashless experiment, an attempt to digitize all commuter payments in Kenya is a poster child on the pattern of thinking that’s left a trail of struggling Fintech experiments in the name of Silicon Savannah.

 

We often fall into the trap of making broad sweeping assumptions about people and places based on our preconceived notions of an what we consider is an ideal world. In the context of East Africa and its bulging informal economy, countless technology entrepreneurs, policy makers, donor agencies and wazungu NGOs have fallen victim to throwing resources at reality hoping to turn it into their Utopian dream. Pick a sector, any sector – be it agriculture, transport, banking, ecommerce. Everything but the kitchen sink has been tried at perceived problems. I say perceived because the definition of the problem depends on who you ask.

Kenya’s short innovation history is littered with such experiments, typically ambitious, well funded but not lasting long before packing up.

Nairobi’s failed cashless experiment, an attempt to digitize all commuter payments in Kenya is a poster child on the pattern of thinking that’s left a trail of struggling Fintech experiments in the name of Silicon Savannah.

Continue reading “How Nairobi’s Matatus Defied the Will of Kenya’s Cashless Policy Makers”

Is Financial Inclusion in Africa Overrated?

People in Africa do not sleep and dream of having bank accounts. What they want is income to put in a bank account. Simply having a bank account gets you nowhere. Simply being cashless gets you nowhere.

Prepaid economy
Logo designed for The Prepaid Economy by Jennifer Mwaogwugwu 3/16/13

 This week I was honored be part of #WhatsNextFinclusion, a series put together by Metta on the state of the Fintech industry in Kenya and more importantly, the future. I was there on behalf of ChamaPesa – a ledger keeping app for social savings groups in Africa. Check out #ChamaPesa on twitter.

This year’s edition was sponsored by Mastercard and the moderator threw some pertinent questions at the panel. I, of course, have my own opinions from my own experience over the past 4 years – what i have observed as an analyst, user researcher, blogger and now co-founder of a startup in the space.

But, I thought it better to pose the same questions to some of the more experienced, brilliant minds from the continent that I have had the privilege to interact with, learn from and exchange ideas.  

What follows is a response from Mwalimu Nyerere – my friend and mentor – on the state of the financial inclusion industry in Kenya and Africa in the raw.  Nothing has been alter-rated so as to preserve the original thought and tone, only polished to give it flow.

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A Little Bit Of Perspective On ‘Financial Inclusion’ and the NGO World

Let me give you guys a little bit of perspective on “financial inclusion” , the NGO world and the never-ending headlines of saving the poor

The White Man's Burden
“The White Man’s Burden (Apologies to Rudyard Kipling)” Judge, 1 Nisan 1899, The Ohio State University Billy Ireland Cartoon Library & Museum

Let me give you guys a little bit of perspective on “financial inclusion” , the NGO world and the never ending headlines of saving the poor.

There is a massive NGO network (con) built around the idea of “financial inclusion” – layered on the premise that the poor people of Kenya and Africa need loans and bank accounts.  This network is mainly funded by the Gates Foundation and major aid development agencies – UKAID, USAID et al.

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