Africa dead capital contradictions


Prof. Bitange Ndemo wrote an article in a local daily in 2014 about Africa’s Poverty Contradictions and Dead Capital. Towards the end of 2017, the article went viral in online forums in Kenya. Several people came out this year to write rejoinders on social media and mainstream media forums some even saying the article was written this year. The problem is most of them missed the gist of Ndemo’s thesis. They only saw the rural house nail and picked a hammer without seeing the cultural wall coated with financial paint context the nail had been driven into.

Ndemo set off the story with his return to Kenya from USA in 1993. I don’t know his real age but he says he was newly married. He had built a permanent house in his rural home before he came back to Kenya. Like many people who relocate back to the country from abroad, Ndemo recounted the challenges he encountered to find a footing. Meanwhile he was living in a rental house and I can bet he was not living in neighborhoods accessed through Jogoo Road.

He began as a real estate agent then a relative asked him to join her horticulture export business. Things improved a bit and he started seeing an opportunity of applying his financial systems experience in Kenyan horticulture industry. Then word began to spread from his rural home that their son who returned from the US was selling vegetables. Politician Jimmy Angwenyi then a lecturer at University of Nairobi surprised that their illustrious son was selling vegetables got him a job as a tutorial fellow. His pay was Sh7,000 while his rent alone was Sh12,000. He fell for social pressure and took the job.

Dead Capital Theory

Prof. Ndemo called his rural house and many others in rural Kenya including commercial houses as dead capital. The first point most responses picked was that Ndemo used dead capital as a wrong label. Peruvian economist Hernando de Soto crafted the theory of dead capital as informally held property that is not legally recognized which hinders the owners from generating wealth from it.

Nobody could reason beyond the theory and see that in rural Kenya a titled property that you cannot use as collateral due to low value and low chances of lenders disposing it on default is as good as a property without a title. I find Africans obsession with defining our reality along the rigid straits of theories by foreign intellectuals as a letdown. If we cannot generate our own theories then at least we can domesticate them to our reality. It is simplistic to think that a simple theory can conclusively explain a social reality. 

Secondly, Ndemo was advising young Kenyans to avoid the cultural trap he fell into. These are; that a man must have a house in his rural home as soon as he is married and secondly, just because you are learned you cannot sell vegetables or simply engage in business. Ndemo fell for social pressure and accepted a job that could not pay his rent, leave alone other bills. Culture is dynamic and as Ndemo puts it, Africa moved from socialist life to a capitalist world. He says it is not wise to build a big house then leave your friends to raise money to educate your children when you die. One should build a rural house at a cost he is sure he will not regret if he falls on lean times. Even if rural homes are not meant to generate capital, it is prudent that what you own should be able to shield you from unpredictable emergencies of our capitalistic world.

A newly married man has a young family, most likely with one or two toddlers. Such a small family does not need a big house upcountry. By the time, someone has retired and is ready to live in the house longer than the twice in fifteen years Ndemo lived in his, the children have left home leaving the parents alone in the house. The children get lost in the globalization rat race where they rarely visit their retired parents. They never saw their parents live upcountry long enough to get attached so they never look forward to it.

It is not wrong to build a house in rural Kenya. What is wrong in the scheme of wealth creation is building a house there when you are struggling to pay rent and survive in the city. This is what Ndemo was emphasizing. His rural house had gobbled up part of his savings but it could not help him as he struggled to settle back in Kenya. It was as good as dead capital. If you build a house upcountry let it be a fraction of your net worth not the main property you own. The cultural value will not put food on the table or pay school fees for your children.

The other argument that was fronted was that those houses inspire locals to aim high in life and invest. Like lawyer Donald B. Kipkorir puts it, the local priest stopped being the sole role model in his Cheptongei village when he put up his house, which he sleeps in only twice a year. Very few people can afford to throw huge amounts of capital to ‘sleep’ and inspire villagers. If you do not fall in that category, do not fall for the pressure, there are many ways to inspire your village.  Invest the money elsewhere and use the profits to uplift your village mates.

On the side of culture, I remember watching my grandfather’s tero buru ceremony in 1987 from behind the door of my uncle’s hut. The cows that were running around the compound were uncountable. My aunt as the first born, my dad as the firstborn son and my elder brother were the main attraction running around dodging cows and other mourners like people possessed. That was the first and last tero buru I ever witnessed, I have attended several funerals but at no time was the ceremony mentioned.

Even if people in my village insisted to, cows are few and in poor health nowadays. If they push the envelope, unlike long time when people would walk into a home and untie cows without permission for such ceremonies, very few people will let their cattle go through the rigorous ceremony. Then again, with the youth preferring to look cool, I bet no one will enjoy draping himself in leaves and herding cows the whole day. Prof. Ndemo did not write against the ceremony, but no one is interested anymore. That is how culture walks through the sands of time, dropping off the baggage the society can no longer carry.

I agree with Ndemo that as rural land is subdivided into smaller plots, putting up a rural home will soon be out of touch with the reality of our children. Very few parents can now bequeath their children land to put up a home and the numbers will dwindle with time. To put up a home, one will be required to purchase a piece of land which will be subject to future market forces. It is these market forces that Prof. Ndemo is urging us to look at keenly and prepare for the future because they will determine if our children will be able to put up a home and eat a good meal in it or not. 

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