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The billions changing hands in shadowy slum economy

FINANCIAL STANDARD
By Dominic Omondi | June 1st 2021

A boy learns how to ride a bicycle in Kibera slums on May 21, 2021.[Stafford Ondego, Standard]

Like the untouchables in the Indian caste system, the ‘filthy’ slum dwellers of Nairobi have been shunned by a nation that is busy trying to achieve post-industrial status by turning the capital city into a financial hub and Africa’s Silicon Savannah.

Neglected, the slum dwellers have stoically carved for themselves a unique economy with black and grey markets where billions of shillings change hands daily.

Expectedly, goods and services are often provided by cartels with deep roots in the settlements while vigilantes and militias maintain law and order. There is a lucrative market for stolen phones in Mathare; rejected bread in Kawangware and scavenged wigs in Korogocho. 

Hundreds have gone blind after taking hooch while thousands have succumbed to cholera among other waterborne diseases after drinking contaminated water.

Some of the jobless youths have been preyed upon by politicians and incited to destroy properties as well as take lives as was evidenced during the 2008 Post Election Violence. 

“When you have low self-esteem…life loses meaning,” says Mairura Omwenga, the chairman of the Town and County Planners Association of Kenya. “Such a human being is not productive. He tends to destroy whenever he sees a neighbour who has got much more than himself.”

Close to three million people or 60 per cent of Nairobi’s population live in slums, according to the country’s official data.

Lured by an economic boom in urban areas after independence, millions of uneducated and unskilled Kenyans who had been constrained in the ‘reserves’ during the colonial period abandoned their farm-based rural life for a stab in the city en masse.

Back then, the central government, the City Council and big firms had staff quarters. With time, companies stopped providing houses to their staff and a corrupt,  broke City Council also discontinued its rentals - the last one being Huruma and Kariobangi South flats which were built in 1978.

To stem the imminent housing crisis, the defunct City Council of Nairobi with the help of the World Bank and USAid adopted a policy of site and service scheme. Under this scheme, private developers were given space to build affordable houses in return for such services as water and toilets.

But even these houses could not keep up with the wave of the population that was sweeping into the city at an alarming rate, says Fred Kibinda, an urban planner and former director of the city planning department at the defunct City Council.

Slum lords who saw an opportunity to cash-in built ramshackle shelters with mud walls, corrugated iron or carton boxes and roofs of mabati or polythene papers. They were set up in poor areas such as along rivers, on swamps that were prone to flooding.

The result was sprawls of crowded, illegal and substandard settlements. Things appear cheap in the informal settlements because slum dwellers use their dignity as their currency.

There are cheap houses that leak when it rains; cheap electricity that could easily get you electrocuted; cheap healthcare that could leave you sicker; or cheap water that is contaminated with cholera.

At night when the parents transform into lovers - like a Werewolf into a wolf, they share the bedroom with their children. Moreover, the single room suddenly becomes a self-contained bedsitter with buckets and polythene bags converted into toilets.

At the crack of dawn, the excrete together with all other solid waste will be disposed of in the street, a vacant plot, drain or waterways by 42 per cent of the households in Kibra, according to the census report of 2019.   

Optimists, says Dr Joy Kiiru, an economics lecturer at the University of Nairobi, will always tap on their desperation.

Oblivious of the risk to their lives the avant-garde among the slum dwellers have illegally tapped electricity. They have then sold it to the tens of thousands of families who need to light their homes, watch their favourite TV programmes or charge their mobile handsets but can’t afford to be connected.

These illegal connections have denied the loss-making power distributor Kenya Power critical revenue, even as Kenyans continue to pay an additional Sh1.7 billion annually through system losses.

Despite Kenya Power warning of dire consequences for those found guilty of illegal connections (a punitive fine of Sh5 million, 10 years’ imprisonment or both) this economic crime has continued. “These are people who have looked at the cost-benefit analysis and realised that they have nothing to lose if they tapped electricity,” says Dr Kiiru.

A corrupt system that allows offenders to bribe their way out of their predicaments has not helped. Deep into the slums of Kibra is an intricate network of pipes known as ‘spaghetti connections.’ They are illegal pipes of water set up by cartels.

Households not served by these pipes get water from informal vendors who have illegally tapped municipality pipes. A 2019 study on informal vendors in Mathare Slum found that it is not unusual for the residents to find debris in the water brought from vendors or a bad taste due to contamination when vendors illegally cut municipality pipes.

Prices of items might appear to be low in Nairobi’s slums, but that is because incomes are even lower. Even unreliable and unsafe electricity costs a premium of up to 129 per cent, according to reports.

During the dry season, people can pay as much as Sh50 for a jerrycan of 20 litres of water in Kibra, residents told the Financial Standard. Yet, incomes earned by slum dwellers can be tiny and erratic. The pillars of the slum economy are the adjacent shops, factories or wealthy families where most of the slum dwellers work as casual labourers.

And those who are not working will have a micro-enterprise, a kiosk or grocery.

Every day, the women tap on the gates of the wealthy families looking for clothes to wash for pay. The men, on the other hand, will try their luck in the nearby factories for odd jobs.

Food takes up close to half of the residents’ income.

Normal quality

Two factors that make food appear cheap in the slums, says Timothy Njagi, a research fellow at the Tegemeo Institute, an agricultural and public policy think-tank, is quality and unit of purchase.

“The normal quality of, for example, tomatoes that probably would be rejected in a supermarket can easily be sold in a slum,” said Dr Njagi. It is not just rejected tomatoes that find their way to the dinner table of slum dwellers, there is also broken eggs, misshaped bread, parts of the chicken such as entrails, head and legs.

Moreover, in slums, where people don’t have refrigerators (official data shows that only 5.9 per cent of the households in Mathare have refrigerators compared to Nairobi City’s average of 23.5 per cent), people buy in bits for immediate consumption.

“Buying in smaller quantities is expensive if you factor in opportunity costs of time,” says Njagi.  A big chunk of the remaining income, after spending on food, goes into housing. About 92 per cent of the slum dwellers live in rentals, a World Bank study found. “Low-quality, high-cost” housing, that is how the World Bank described them in a 2006 report.

The capital outlay for the slumlord, says Kibinda, is low. “But the returns are high because the rent that a tenant pays is relatively very high.” The Covid-19 pandemic has aggravated poverty in slums with a lot of slum dwellers left without a source of income.

State efforts, which included giving youths in slums menial jobs like cleaning drainages and cutting grass and cash transfers to some select households might have helped to keep the wheels of the slum economy turning.

A breakdown in security - including food security - has meant that people rely on tribal kinship. Anthropologists reckon that the first factor in the urban settlement is solidarity which is achieved through tribal ties.

In a few of the slums, gangs such as Mungiki extract protection fees from the residents, matatus and other business establishments. Gangs also control the illegal brewing of chang’aa in Mathare and Korogocho slums. Chang’aa is a type of traditional spirit that is often brewed under unhygienic conditions.

Described as ‘kill-me-quick’ in street lingo as a few shots of the drink is enough to get you high, chemical-laced chang’aa killed 140 people in Mukuru kwa Kayaba in 2000.

Eleven years later, when a fuel tank in another slum, Sinai, leaked, some of the residents rushed to the scene with jerrycans to enrich themselves. An explosion occurred. Over 100 people died. Hundreds of others have been left with indelible scars.

Kibinda does not think slums should be seen as an eye-sore, but a solution to a housing crisis. “We have the slums with us, and all that is required is to make the slums livable.”

The slum upgrading programme, says Omwenga, should have been informed by having the accurate number of people in slums and where they live.

In 2014, the State started a Sh3.3 billion programme to establish a slum and informal settlements database. By end of June last year, only Sh10 million had been spent. A year earlier, the Jubilee administration started a project to acquire and upgrade health facilities in slums at a cost of Sh6 billion. That also has never been actualised.

Nonetheless, through the support of development partners, the State has so far spent over Sh15 billion in projects aimed at improving the living conditions in informal settlements spread across 15 towns.

Some of the houses in slums have now been legally connected to electricity. Thanks to free primary education, a lot of slum children are finishing their primary schools, giving hope of breaking free from the vicious cycle of poverty.

Giving slum people a sense of dignity is a battle for the soul of the nation, analysts say. “After all, what is development without dignity?

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