Lessons for the Post Coronavirus Economy from the Informal Economy

Published on 28th April 2020

The fundamentals of neoliberalism have been shaken. Stock markets have collapsed. Oil markets have gone haywire. Labour markets have not been spared. Currencies have lost their value. The informal economy and peasant production is not exploitative and extractive. It has survived despite state neglect and disparaging by policy and academic elite as survivalist and backward.

The post coronavirus economy will need to learn from the African informal economy which draws its resilience from the principles of Ubuntu which include sharing, solidarity and reciprocity. These principles have helped the informal economy and peasant production survive into the 21st Century.

Ubuntu holds that all human beings occupy a single universe and have a moral responsibility to work for the welfare of all. According to ubuntu, economics cannot be divorced from our humanity. African peasants, traders and artisans practice a humane economic system that combines African values and norms with an awareness that individual actions impact on others positively or adversely. Ubuntu is about endurance, loyalty, hard work, concern for the welfare of others, resilience, generosity, shared risks, economic justice, a culture of saving and wise deployment of surplus, good labor relations, and solidarity entrepreneurialism that entails sharing of space, joint transport, joint procurement, mutual security, pooling of money, shared pricing of goods, sharing of ideas, and selling goods on behalf of each other.

The ubuntu business model stems from the need to build individual and group agency. It is supported by laws that regulate the group and the individual. It is strengthened by a learning process that involves the transfer of business knowledge and behavior in the market. It upholds economic justice by allowing everyone to trade and share space. The business model is closely linked to the individual’s life and community. It is foregrounded on resilience, self-reliance and entrepreneurship.
In traditional African communities, production was carried out individually and communally. Individuals would work together to clear bushes and work on each other’s farms. Blacksmiths would mine and smelt metal together. Women would sit together for company and share tasks in pottery and basketry. Different households would provide food to feed workers. People worked together in solidarity to meet a desired goal of human survival and flourishing.

Most peasant cooperatives exhibit the principles of ubuntu in their daily activities. A cooperative in Kiambu is an example of a collective that espouses the principles of ubuntu. The cooperative was established in 1961 by 31 members inspired by the liberation struggle that aimed at enabling Africans to own the means production and be self-reliant, instead of being servile workers in European settler firms  and farms.

The cooperative’s mode of production combines African logic and norms. Some of the peasants donated their parcels of land to be used as milk collection centers. They provided pick-ups to collect and transport milk to desired markets. The cooperative accommodated both the smallholder farmer with the least output in milk production as well as the farmer with more milk. Working for the common good of the members of the cooperative was given pre-eminence. This effort was a form of anti-colonial resistance that was not only transformational, but also preserved the peasant values of solidarity, family and community flourishing. The cooperative also stressed independence over state control.

Key factors that have sustained the cooperative include mandatory monthly forums and milk collection system. The area is divided into ten routes based on the geographical feature - the ridge. People occupying one ridge are likely to be connected though blood or marriage which makes integration easier. They are also likely to have similarities in the Christian religion they have adopted. Ridges in the precolonial society were divided according to different clans and cultural practices. People from one ridge would be initiated together hence bond, monitor each other and castigate wrong doing. In each ridge, there are several sub routes. Milk collection points are situated within a walking distance, usually not more than two kilometers. There are about 80 Milk collecting centers. Each route has a code.

Learning is an important ingredient of the cooperative management. It involves training on handling feeds, maintaining cleanliness in milking and adoption of new technologies like making biogas from animal waste. The cooperative had about 14 dairy extension officers who treated animals, carried out artificial insemination, controlled the quality of milk and enforced hygiene standards. Its members underwent courses on efficient management of fodder, record keeping, formulation of feeds, bull selection, control of mastitis and udder disease, management of zero grazing unit and calf management.
The cooperative had 58 feed stores from which members could access feeds through credit check-off systems. The cooperative offers good prices, pays regularly without delays, and gives farmers bonuses at the end of each year. Annual dividends are also given on performance. The cooperative was quite productive that it started supplying milk to the now defunct Kenya Cooperative Creameries (KCC).

The Cooperative is managed by a board of directors who are elected by the members. It has an executive committee comprising chairman, secretary and treasurer. Each board member represents a milk route. Every month, the route director holds meetings with cooperative members of the area.

Every year, the cooperative holds an Annual General Meeting where policies are reviewed and reading of accounts and future innovations discussed. Implementation of any changes is approved by consensus. The members discuss the budget, introduction of new feeds, employment of workers, animal medicines, expansion, creation of other institutions such as a SACCO to support buying of property, education, insurance, and welfare. The Cooperative established a milk processing factory which produces a popular milk brand since 2004. The processed milk is distributed to cities and major towns in Kenya.
The cooperative has greatly contributed to the enhancement of wealth and wellbeing in the surrounding community. It has spearheaded the building of schools, churches and health centers in Githunguri area. Its ‘Store initiative’ enables members to access foodstuff on credit. Members can also access farm inputs on credit and pay on a monthly or quarterly basis through the monthly check-off system same.

Households make biogas energy from cow dung for use in cooking, heating and lighting. Food production in the farm is also enhanced by supply of manure. The cooperative has reduced income inequality as most households participate in dairy farming. Parents and adult children are included in the family SACCO account for ease of transactions and guaranteeing of loans. Members are provided with loans to buy motorbikes which they use to fetch animal feeds from distant places or deliver milk to the collecting center.

The region’s youth are employed in the factory, or in dairy farming support services such as transport, feed and implement production. There is intensive training for members. Any innovations introduced are approved by the membership. Procured veterinary officers are vetted by the board and the members for competency. Companies willing to partner or do business with the cooperative also undergo rigorous vetting. Service providers have to offer samples of their products free of charge to a minimum of ten farmers in each of the milk collection routes. The ensuing feedback determines whether the service provider can do business with the cooperative.

The cooperative’s laws and regulations are formulated by the members. The members also determine disciplinary action. An elected representative from each of the routes forms part of the cooperative board that supervises and manages the activities of the secretariat. It holds regular meetings whose decisions are conveyed to the respective route.

The act of peasants, artisans and traders positioning themselves in the global economy using the resilience and insurgency accruing from ubuntu cannot be ignored. They have come up with an ethical business model that is based on cooperation, self-reliance, human dignity and fairness in the competitive global economy. Their mode of production and exchange is done differently from the mode of production and exchange of corporations and governments.

It is time that economists, policy makers, investors and planners thought creatively on how to dialog with traders, artisans and peasants and accommodate ubuntu. Open and ongoing dialog between these groups will lead to the creation of models that respond to everyone’s needs as opposed to ones that ostracize the rest. Ubuntu has the potential to serve as Africa’s contribution to global sustainable development, African governments and city planners should borrow from it for inclusive and sustainable development.

The ubuntu model is an antidote to greed, cut-throat competition and inequality that is characteristic of neoliberal development. Cross-fertilizing ubuntu into global business will put a stop to the disastrous survival for the fittest worldview that breeds conflict. Given the polarization and sectarianism evident in contemporary cities and states, ubuntu offers practical lessons on how self-regulating autonomous communities can work fairly and in harmony. Ubuntu is the missing link that post coronavirus economy needs to inextricably connect people to each other. It offers the new economy the tenet of inclusivity, self-reliance, solidarity, continuous learning, democratic governance, reciprocity, pooling of resources, redistribution of resources, gifting, role of the divine, social protection, individual and communal wellbeing.

By Mary Njeri Kinyanjui
[email protected]


This article has been read 1,274 times