Welcome to the May edition of Trust in Transition. This monthly newsletter, compiled by WISER scholars, is your gateway into finance, technology, and trust in Africa. Each month the Substack features WiSER scholars unpacking the current events and stories shaping their research.
🗓️April recap:
On Thursday, April 25, Keith Breckenridge and Ayesha Omar presented the third lecture in the series on the unified theory of trust. The lecture examined the Islamic law and economics of trust institutions, especially the thousand year history of waqf and its effects on institutions of learning. Keith and Ayesha both stressed the carefully laid out rules and roles of ownership, custody and benefits that have been developed by waqf.
The lecture drew heavily from Makdisi's Rise of the Colleges, but it also considered Hallaq's arguments about co-option and showed how much the waqf institutions in north Africa changed in the course of the 19th century. The lecture suggested that the English law of trust may well trace its most important institutional roles, rules and norms to the same waqf model that fostered the development of the earliest colleges.
In this edition, Wiser Trust scholars and affiliates are reading the following:
“A new geopolitical order in oil financing?” Keith Breckenridge | Professor | Trust
“Unveiling South Africa's ID Dilemma: A Closer Look at the National Identity Management System.” Jonathan Klaaren | Professor | Law
“Confusion as Nigeria national ID cards multiply.” Raymond Onuoha| Postdoc Fellow | Trust
“Balancing Innovation and Trust: Navigating Data Privacy in African Banking.” Georges Eyenga | Postdoc Fellow | Trust
“Digital credit loan sharks: regulating an emerging threat to public safety” Tunde Okunoye | Doctoral Fellow | Trust
“Loaning Looted Artefacts. Asante Gold returns to Ghana, for now.” Caroline King | Doctoral Fellow | Trust
“South Africa's Democracy: Past Promises and Present Realities” Fatima Moolla | Doctoral Fellow | Trust
“Limiting risk? Insurance for bank failures” Laura Phillips | Researcher | Trust
“A new geopolitical order in oil financing?”
Submitted by Keith Breckenridge | Professor | Trust
Three recent reports on investments in African mineral resources are important in thinking about the geopolitics of finance. African economies have long been very dependent on mining and drilling for tax revenues and foreign exchange (and illegal offshored rents), and, in the years leading up to the Ukraine invasion, that seemed to be changing as funds for new oil and mining investment dried up. But in the last year there are signs of a new political -- and financing -- order in oil exploitation. Niger's new military government quickly signed an agreement with the China National Petroleum Corporation (CNPC) to finance and complete the pipeline running through Benin; Senegal's newly elected government of tax collector, Bassirou Diomaye Faye, is looking to renegotiate the contracts with Australian and British oil companies; and Uganda has signed a similar funding agreement with two Chinese state firms to finance the EACOP pipeline that will run from the border with DRC to the Tanzanian coast.
“Unveiling South Africa's ID Dilemma: A Closer Look at the National Identity Management System.”
Submitted by Jonathan Klaaren | Professor | Law
As previously noted in this Substack, a South African court uncovered a lurking issue in the vaunted South African national identity management system – the blocking of IDs where around 2 million holders of ID cards were cut off in the past from their IDs without their knowledge, with 700 000 currently affected. The news this month is that the government has not appealed, thus signalling their acceptance of the order. In terms of the judge’s direction, the DHA had till 8 April to unblock all IDs belonging to children. Case discussions should hopefully confirm soon what progress has been made. In any case, civil society advocates are doubtful that the Department’s new practice of notice is compliant with South Africa’s rigorous Constitution – the 160 000 notice letters issued thus far do not appear to include reasons for the blocking and take effect within 14 days.
“Confusion as Nigeria national ID cards multiply”
Submitted by Raymond Onuoha| Postdoc Fellow | Trust
Confusion as Nigeria national ID cards multiply
There’ve been mixed reactions in Nigeria after the federal government unveiled plans to introduce a new multi-purpose national digital ID card, with some describing it as a duplicative effort and a waste of resources. In a statement issued Friday April 5, the National Identity Management Commission (NIMC), said the new ID card, whose launch is supported by the Central Bank of Nigeria and the Nigeria Inter-bank Settlement System, will have payments and social service delivery functions, and will facilitate access to other services including travel, health insurance information, microloans, agriculture, food stamps, transport, and energy subsidies, just to mention a few. The number of new cards to be introduced notwithstanding, the announcements come as Nigeria is pursuing efforts to expand coverage of the NIN – another digital ID – which has so far been issued to nearly 105 million people. Across the country’s social media space, there has been strong criticism of the NIMC’s announcement of yet other cards. Following the criticisms online, the NIMC has also clarified that the issuance of the new card will not require the collection of additional biographic or biometric information.
“Balancing Innovation and Trust: Navigating Data Privacy in African Banking.”
Submitted by Georges Eyenga | Postdoc Fellow | Trust
AI and digital innovation to continue driving banking in Africa - KPMG survey
Although technological innovation is presented as a means to improve access to banking services and promote financial inclusion, concerns about data protection and user privacy also exist. While AI and digital innovation are touted as opportunities to enhance services and personalize experiences, it is imperative that banking institutions implement robust security measures to safeguard their customers' personal and financial information. Without a strong trust in transaction security and data privacy, users may be hesitant to fully embrace these new technologies, thus limiting their impact on financial inclusion. Furthermore, the text highlights that regulatory, governance, and transparency challenges are potential obstacles to the expansion of the banking sector on the continent. These challenges can also influence user trust in the banking system, as they may raise concerns about the reliability and fairness of banking practices. While technological innovation indeed offers opportunities for improving banking services, it is essential for banking institutions to proactively address concerns related to data security and regulatory compliance to enhance user trust in the banking system.
“Digital credit loan sharks: regulating an emerging threat to public safety”
Submitted by Tunde Okunoye | Doctoral Fellow | Trust
What to do when loan sharks harass you
The digital credit industry in Africa is one that has developed faster than attempts at regulation. In Nigeria alone there are at least 160 digital credit start-ups jostling for the attention of the working class in Africa’s fourth largest economy. Digital loan apps have their appeal. They bypass the regular “brick and mortar” methodologies of traditional financial institutions to provide access to quick, almost instant loans. Beyond this initial sweet taste in the mouth though, many of their customers have found that they leave a bitter, churning taste in the stomach.
The most discussed of this “bitter taste” are the methods they employ for loan recovery. Drawing from data intrusive technologies through which the apps harvest sensitive personal data from the mobile phones of customers, these companies hire loan sharks who use these data to embarrass and harass customers through incessant (sometimes abusive and threatening) phone calls, notifying contacts such as employers and family of the debt status of customers, and as revealed in India, sending “nudes” of customers. In Nigeria, the Regulator has firmly and commendably moved in to cleanse the stables. Another instrument of regulation is ensuring that credit bureaus do work, so that creditors don’t feel that the only recourse they have in potentially high loan default environments is employing nasty loan sharks.
“Loaning Looted Artefacts. Asante Gold returns to Ghana, for now.”
Submitted by Caroline King | Doctoral Fellow | Trust
Asante gold artefacts: Ghana rejoices as 'crown jewels' looted by British put on display
After over 150 years, Asante Gold artefacts were displayed in the Manhyia Palace Museum in Kumasi, the capital of the former Ashanti Empire and today’s Ashanti Region in Ghana. This comes after years of negotiations between various British museums that have been keeping these stolen colonial artefacts and Ghanaian researchers and the Ashanti king. The emergence of provenance research in Europe is shedding a light on the past wrongdoings of the colonial power and is making it more and more difficult to justify keeping stolen artefacts in European museums, where they are displayed for monetary gain or simply kept in archives.
First steps were taken last year with Germany returning a collection of Benin Bronzes to Nigeria, but the Ghana case is different. UK law cleverly prevents the return of “contested items” from its national museums, and loans to countries of origin are seen as a way to overcome the legal issues, but some argue that by accepting loans, countries support the notion that the artefacts belong to British museums. The loaned artefacts are on display in Kumasi for the next three years, it remains to be seen what will happen to them after.
“South Africa's Democracy: Past Promises and Present Realities”
Submitted by Fatima Moolla | Doc Fellow | Trust
ANC OR BUST? Who can scratch South Africa’s 30-year itch?
In the latest of my posts focusing on elections and the upcoming South African election, I pick up on this article from the Africa Report which focuses on the upcoming general elections in South Africa and the growing disillusionment amid persistent inequalities and economic stagnation. (See previous commentary: April, March, February) The narrative juxtaposes the hopeful beginnings of democracy in 1994 with today's harsh realities, highlighting a 40% unemployment rate and rampant corruption.
The piece suggests a troubling disconnect in the electoral process. While elections are meant to reflect public will and drive change, in South Africa, they still need to address deep-rooted issues. Voter shift away from the ANC, particularly among the middle class, signals frustration with unmet promises rather than ideological differences. This situation underscores a critical challenge: while elections are essential to democracy, they alone are insufficient to remedy systemic socio-economic problems. The article effectively points out the necessity for democracy to not only enact but also to enforce and embody substantial changes.
“Limiting risk? Insurance for bank failures”
Submitted by Laura Phillips | Researcher | Trust
South Africa's central bank rolls out deposit insurance scheme
In April 2024, the Corporation for Deposit Insurance (CODI) was established as a subsidiary of the South African Reserve Bank. Reporting suggests that it was given particular impetus by the collapse of the VBS Mutual Bank, though it has been a long time in the making. In an attempt to minimise individual depositors’ exposure to the risk of bank failures, CODI collects monthly contributions from member banks. In the case of bank failure, deposits of up to R100 000 will be paid out to banking clients, supposedly, according to CODI, enhancing public confidence - or trust - in the country’s bank system.
Trust in Transition, is a Substack exploring the intricate interplay between trust, finance, and societal evolution within the African context. This space serves as a lens into the fascinating dynamics of trust infrastructures, financial landscapes, and their transformative impact on Africa's economic pathways.
About the Trust Project:
WISER is pleased to announce a new, long-term research project into African Trust Infrastructures. With generous support from Standard Bank we will be hosting a new doctoral research program examining the development of digital population registration systems, and their effects on institutions.
About WiSER:
As a part of The Witwatersrand Institute for Social and Economic Research (WiSER), our mission is to spotlight African scholarship, dissecting the nuances of societal transitions, financial evolution, and trust frameworks. Established in 2001, WiSER has been at the forefront of interdisciplinary research, delving deep into the humanities and social sciences in South Africa.