Mombasa in spotlight over ‘currency that improves lives’ Bangla-pesa

By Nyambega Gisesa

NAIROBI, KENYA: Near the mud-walled house of Adhiambo Onyango, relatives and friends wipe sweat from their faces as they curse necessarily.

Dogs watching with keen eyes wail in unison. Even the poorly done mud walls seem to stare in anguish. This is the life situation of Mombasa’s Bangaldesh slum, where about 20,000 residents live in mud-walled houses and polythene bag structures. Here, life has come to a standstill.

Although no one is dead, this is a slum in mourning. On Thursday May 30, Mombasa Senior Principal Magistrate Richard Odenyo ordered for further detaining of five residents of this area.

The five have been placed under police custody as investigations continue on Bangla-Pesa, a currency that has propelled the neglected slum to national fame.

“Nobody seemed to care about us. We even didn’t need media attention. But now, there are endless calls about Bangla-Pesa,” John Onyango told The Standard on Sunday.

We found the talkative Onyango at the Changamwe Police Headquarters where he was among dozens of residents who unsuccessfully sought bail for the release of their relatives and friends in police custody.

The arrested are board members of Bangla Business Network Organisation that has representatives who include youth, elders, business owners and community health workers. They have been accused of coming up with the Bangla-Pesa, a currency that Changamwe OCPD Joseph Muthee describes as “controversial notes”.

Bangla-Pesa is a complementary currency. It is in different denominations of 5,10 and 100. A complementary currency is defined as any means of recorded exchange other than legal currency.

Fairy tale of the currency

The fairy tale of the currency, which residents acknowledge has improved their lives in the less than one month of existence, started in November last year when former Peace Corp Volunteer American William Ruddick visited the slum with a poverty-eradicating idea but without money.

When he knocked on the doors of the locals, they came running for meetings.

An econophysicst (econophysics is the use of tools of physics in economics), Ruddick had first started with a similar initiative known as Eco-Pesa.

Eco-Pesa programme was aimed at facilitating environmental, social service work and economic development through the use of the complementary currency, Eco-Pesa, in Mombasa’s Kongowea slums. Eco-Pesa started with the registration of 75 small-scale local businesses.

“Residents used Eco-Pesa to pay for waste collection, providing a cost-effective way of cleaning the littered slum,” the American told The Standard on Sunday at the Changamwe CID headquarters where he took a break from the unending interrogation by Central Bank of Kenya officials.

Use of Eco-Pesa

“The residents could then use Eco-Pesa at local small businesses that in turn used it at other businesses thus creating local circulation and boosting local trade. With only Sh29,920 ($352) worth of Eco-Pesa, there was an estimated Sh354,960 ($4,176) worth of trading.” He gave figures and illustrations of his work.

After using Eco-Pesa to collect 20 tonnes of waste in the area, he began a youth-led tree planting operation paid for using Eco-Pesa.

The Eco-Pesa programme was successful and lasted seven months. “I was frustrated when we decided to stop it,” he narrates. “This was as a result of donor funds running out and the community did not own the project, hence making its continuity a difficult task.”

Ready to learn from his mistakes, in November Ruddick arrived in Bangladesh.

“Bangladesh was an easy pick because it is one of the poorest if not worst informal settlements to live in Mombasa,” he says.

‘Bangla’, as it is commonly known as, is strategically located along the Nairobi-Mombasa highway.

Occupying 20 acres of land, the area was formerly owned by an Asian who left for Bangladesh never to return. In early 1950s, people started settling on his land, calling the settlement Bangladesh after the former owner’s destination.

It is a slum whose main denominator is poverty. According to a study done by the NGO Pamoja Trust, 81 per cent of the tenants pay a monthly rent of Sh1,500 and below and 79 per cent of the residents are tenants.

According to a study done by University of Nairobi don Dr Alex Sabuni last year, Bangladesh is powered by  illegal power connections, there are very few latrines, no designated dumping sites or rubbish collection bins and residents buy water at exorbitant prices from water kiosks.

Showering in a private bathroom is a luxury; only five per cent of the residents have one.

No secondary school

There is only one public school, no secondary school and there are only two privately owned hospitals. I walked through dozens of open sewers, as children played next to dirty greenish-coloured water and countless used and unused condoms painting the roads to listen to the residents’ from-rags-to-riches type of story that has turned catastrophic.

Like Eco-Pesa, trust is the only currency in Bangla-Pesa.

A total of 200 small-scale businesses have registered in the Bangla Business Network through which the network members trade with each other without using the national currency.

One becomes a member of the network upon finding four guarantors. A membership fee paid is used for administration, marketing and community programmes.

Once a member, you are expected to buy and sell goods and services to fellow members. If you default, the guarantors pay for your sins after which you are kicked out of the group.

The amount of Bangla-Pesa in circulation is determined by membership and a baseline survey that indicated that Bangla businesses spend a maximum average of Sh400 in a day.  Currently, The Bangla-Pesa vouchers in circulation are the equivalent of Sh20,000.

“This currency forms a buffer against fluctuations in the money supply due to remittances, weather, holidays, sending children to school and political turmoil, among others,” the group’s website reads.

Ruddick says: “The difference between Bangla-Pesa and Eco-Pesa is that Bangla-Pesa is not supported by donors and the initiative is owned by the community.”

Bangla-Pesa was launched by Koru Kenya (Koru is the Luo word for “your home’), an organisation that is run by Ruddick’s wife Jacqualine Kiuwa, a Kenyan from Nyanza.

Koru Kenya holds a non-voting advisory role in the board of Bangla Business Network Organisation.

The initiators say they are not related to the separatist organisation, Mombasa Republic Council (MRC) and they have also denied claims that Bangla-Pesa is a forgery of currency.

“Why does your money resemble the euro and pound?” a CID officer questioned Ruddick as we listened from the next room.

Ruddick says research on complementary currencies is neglected. “These currencies are a solution for alleviating endemic poverty in informal settlements and ensuring that aid money remains in target communities.”

In his book The Future of Money: Creating New Wealth, Work and a Wiser World, financial expert and economist Lietaer Bernard, points out that there are over 2,500 initiatives around the world using complementary currency concept. Success complementary programmes can be found from the local businesses of Berkshire Massachusetts in the US to the cultural, political and economic centre of Curitiba, Brazil.