Financialising Development


Cash is Fashionable

Ryan’s recent post on money and its flows and blocks  prompts me to post this, something I wrote a few weeks ago in response to a request from colleagues in Leiden for their  ICA magazine, which is published by study association Itiwana of the department of cultural anthropology and development. After my post on brands and the UK riots they thought I could write something about brands.   Being in Tanzania which is buzzing with money talk,  prompted in part by its new status as  a destination for mining and gas companies in the current  natural resource rush, I wrote instead about how development is being re-branded. 

The 2015 deadline for the Millennium Development Goals is fast approaching. Few  countries in Africa  are expected to meet the targets.  Income poverty, food insecurity, rising inequality and poor health remain problems for the most of the continent.  Despite shifts towards democratic politics in many countries, civil conflict and political instability  are  entrenched  in others as legacies of colonial state  building and post independence power struggles.  Such conflicts, as in Mali and  the Sudans,  are fueled by the rising value of  resources  associated with particular regions within a global market that is revaluing Africa as a potential source of minerals, gas and oil  and as a  high growth location with an expanding  middle class. 

Annual growth rates  for African economies have averaged six or seven percent for much of the decade.  The extent to which growth is a consequence of political stability and sound macroeconomic management is open to question. A more pressing explanation for the recent transformation in Africa’s economic fortune is the global increase in demand for its natural resources enabled by regimes of economic management  which are increasingly open to foreign investment and partnerships.

This   continental push to promote the commercialization of  what can be claimed as `natural’ resources within a context of on-going economic liberalization is legitimating an emerging discourse about the wealth of African nations and the urgent need for investment  as the magic bullet which can liberate this capital and create national prosperity. The regionalization agenda which fosters economic integration is aggressively promoted by governments and donors, along with initiatives aimed at strengthening property rights, enabling foreign direct investment and transforming communications infrastructure. 

China’s  new position as the potential economic savior of a continent   signals  fundamental  shifts in the political ordering of international development. The poverty discourse  central to the MDGs and,  arguably, to the constitution of countries in sub Saharan Africa as  fitting subjects of development  intervention is  increasingly contested, not only  by politicians and media commentators across the continent,  but by  an authoritative cadre of technical experts promoting market led development. Development is being re-imagined not as a consequence of social sector spending but as an effect of marketization.

States across the  continent are  seeking to present themselves as  entrepreneurial and investment friendly. Tanzania is no exception.  Like Uganda, it has practically shifted the orientation of its poverty reduction strategy towards economic growth. The government of President Jakaya Kikwete, now in its second term, is pursuing  a policy of Kilimo Kwanza,  farming first, seeking to marketize agriculture and to promote `a green revolution’ with the support of  major donors including the World Bank.  While  the country continues to rely on donor support for around thirty percent  of its national budget, rationales for intervention are  now situated within  a discursive package that is market led.  Donor funded workshops  buzz with talk of  value chains and market information.

The more conventional investments in the social infrastructure of schools and health facilities financed by the Tanzania Social Action Fund  have been superseded by  what are designed to be income generating investments for farmer groups to enhance their own livelihoods.  Phase Three of this program, shortly to be implemented, is structured around an assumed transformation from indigence to entrepreneurship, enabling self reliance through savings and micro finance as the poorest get, in a phrase equally at home in US discourses of welfare reform, `a hand up not a hand out’.

The aspirations of private sector advocates, within and outside government, increasingly  converge with  the policy positions of development partners as development is re-branded  globally to occupy a new market position.  In Tanzania, as elsewhere, financialization, as means and end,  plays a central role in this convergence.   International accounting firms fight for market share of development implementation within extended contracting chains that  conflate financial  and political accountability. Civil society organizations are brought into being to play specific roles in monitoring public expenditure, along with new organizational forms and participatory practices.   Public expenditure tracking,  known as PETS, has a  set of methods  into which civil society volunteers must be  enrolled through seminars and allowances. Techniques equally at home in the world of market research  comprising score cards  and surveys  come to have political clout as modalities through which dissatisfaction with government can be articulated.

Outside these transient relations held tenuously  in place through development funding streams, a range of private institutions  are seeking to establish the architecture through which the financialization of Tanzanian  social life is possible.  The limited reach of existing banking infrastructure and the Savings and Credit Co-operative Societies creates potential opportunities for  new kinds of  financial  institutions. These include  private financial institutions providing loans  to  formal sector workers,  specialist microfinance lenders such as Pride,  and the money transfer services provided by mobile telephone companies, of which the market leader is Vodacom’s Mpesa.  The proliferation of  formal and informal financial services, and those which straddle  this divide,  is staggering.

Savings and loan groups are rapidly proliferating in both urban and rural areas, notably those organized on the  Village Savings and Loan model  promoted by the NGO Care International. These groups consisting of around  thirty members are a fascinating  organizational form,  using strategies of ritualization and formalization to ensure regularity of savings and financial transparency in a group structure where all transactions  take place at weekly meetings and hence in public. Group members  buy weekly shares up to a limit  of five  intended to  ensure that large profits cannot be made and to  restrict  the exploitative potential of  the better off making money from lending to their poorer neighbors. Savers lend to members of the group at a rate of interest  designed to  increase the value of the savings share.

Groups operate on an annual cycle  after which accumulated interest is divided among members according the  value of their purchased shares.These  `care groups’ as they have come to be  known in some districts are  wildly popular because they allow people to borrow money at limited rates of interest,  particularly useful in helping meet big expenses such as  school fees, funeral contributions and hospital  costs.  They also provide a predictable return on savings, depending on the extent of borrowing  within the group.  An additional  weekly contribution functions as a kind of social insurance for group members who are paid a  sum of money should they fall sick or  lose a close family member.

These kinds of groups are heralded by promoters as  a locally available form of micro financial institution serving the previously excluded, a social institution for the promotion of fiscal responsibility and the discipline of saving not so much as an end in itself but as the precursor to enterprise.  Savings  groups thus conceived may indeed be foundational to a new culture of economic change. They  also enable  a range of distinct practices which support  radically different cultures of economic practice, cultures which  simultaneously promote and obstruct the aspirations of  Tanzania’s economic transformation.

In Ulanga district, Southern Tanzania,  where I have been doing some fieldwork, a  large number of `care groups’ have been established over the past two years,  with the majority now entering their second  savings and loans cycle. Despite the core organizational  template which specifies  numbers of members and the management structure, the  practice of groups varies widely, even within the same geographical area. In addition to variations in the value of shares purchased and the timing and duration of loans,  some groups insist on   compulsory  borrowing as well as saving as a  condition of membership as a means of increasing the value of savings for all the members of the group. Many groups also insist that members purchase  necessities like laundry soap  from the group at a price which is the same as or higher than market prices  in order to increase group profit and hence the value of the shares which are divided at the end of the cycle.

Borrowing is socially construed as an emergency response to hardship   but valued as the means of increasing savings.  In this enactment of savings and loans  the group itself is the enterprise and saving  framed as entrepreneurial activity which generates a return for individual members.  The income generating strategies of group members focus on  gathering  sufficient cash to  make savings, in actuality purchasing  regular shares,  because  this is likely to  accumulate more value than  alternative forms of enterprise, including agricultural investment. Participating in `care groups’, for  people with cash to make regular  contributions,  is fast  becoming a recognized means  of making money   make money. Consequently,  traders and  middle income people  in the villages close to the district capital   are joining multiple groups, allowing them to them to escape the  limitation on share purchase within a single group and to access the kinds of loan amounts which can  yield profitable returns.

That money generates money though such practices does not equate to  the kind of financialization envisaged by the architects of Tanzania’s new development order,  a world premised on depersonalized economic action within a market frame.   `Care groups’ in  performing the social relations through which money begets money, via shares invested by group members and the interest they pay on loans , permit individual profit so long as costs are shared to some extent by members of the group.  Organized around distrust rather than trust groups rely on  the visibility of transactions made in public  and  the simple technology of the specially constructed cash with three separate locks for which  separate keys are distributed among ordinary members.  Such practices  make explicit the social labor required to make money do savings work and the essential embedding of money within  social relations.  It is this embedding which accounts for the success of  mobile money services in much of Africa rather than mobile banking- what people are interested in  is the capacity to transfer money between situated persons not the potential of investing money in abstract institutions. 

Political emphasis on accountability dovetails with cultural preoccupations around relations and money , articulated as concerns with the illicit appropriation and consumption of public resources which are  highly personalized.   The organizational structure of `care groups’ taps into fundamental cultural concerns about groups and individuals, collective responsibility, equity and enrichment in ways that permit adaptation to support  core ideals.  As anthropology consistently demonstrates, values rather than value are foundational to understanding economic practice in any context.  This is not a matter of resistance to global capitalism or neo-liberal economics so much as an assertion of  what   values count.




Maia Green works on issues of social transformation in East Africa and the anthropology of international development. She has written on diverse topics ranging from anti-witchcraft practices to the proliferation of NGOs. She teaches at the University of Manchester.