Welcome to the September 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.
đ Happy ID Day from WiSER! đȘȘ
Today, as we celebrate International Identity Day (ID Day), we again reflect on the importance of legal identity in fostering inclusive development and access to essential services. Legal identity is not just a marker of individual recognition; it is increasingly the gateway to rights, opportunities, and security.
At WiSER, we are deeply engaged with the politics of identity, governance, and digital transformation, as demonstrated by our participation in the ID4Africa conference earlier this year. In May, we hosted the panel âCan Trust Be Engineered on the African Continent?â, which explored the complexities of biometric ID systems and digital infrastructures across Africa. As countries across the continent continue to innovate in the realm of identity, we remain committed to exploring how trust can be built through these systems while ensuring they protect citizens' rights and foster inclusion.
On this ID Day, letâs continue the conversation about the power of identity in shaping our futures, and reflect on the role we all play in advancing equitable and sustainable identity systems for all.
August Recap đïž
The sixth lecture in the series on the unified theory of trust was held on August 1 and delivered by Keith Breckenridge in discussion with Laura Phillips.
The lecture examined the insights that can be gained from taking the critics of trust seriously; it sketched the similarities between Putnamâs theory of social capital and Gramsciâs theory of hegemony, and of cultural struggle, in the institutions of civil society. It then discussed Orlando Pattersonâs account the three versions of democracy in the United States, each defined by a distinctive form of racialised trust â and the significance, not only in US history, of trust as a common bond between free citizens against distrusted and oppressed others : slaves, aliens, women. The lecture stressed that even the most enthusiastic advocates of trust as a driver of prosperity, like the Polish scholar Piotr Sztompka, have pointed to liberalismâs heavy, and inescapable, reliance on institutional distrust in designing limits on state power. Pippa Norrisâs recent work has taken these criticisms considerably further by pointing to the links between trust and credulity in the recent rise of democratic populism, and to the ongoing importance of a militant scepticism in the workings of a real democracy. The lecture concluded by discussing the similarities between Bourdieuâs account of social capital, and the political problems generated by his implicit account of the politics of trust â especially in the defence of the redistributive state in the face of an expanding and potent free market.
â The WiSER Feature:
âA long South African tradition of registering but not regulating trustsâ Keith Breckenridge and Jonathan Klaaren
Read below âŹïž
In this edition, Wiser Trust scholars and affiliates are reading the following:
âRebuilding Trust Amidst State Dependency: The Role of Augentic in Cameroon's Civil Identification Reformâ Georges Eyenga | Postdoc Fellow | Trust
âThe Fried Chicken Bankâ Joel Pearson | Postdoc Fellow | Trust
âWhat is mobile money?â Fatima Moolla | Doctoral Fellow | Trust
âMTN granted power generation license in Nigeria â Tunde Okunoye | Doctoral Fellow | Trust
âCan New Technology Solve Ghanaâs Identity Fraud Problems?â Caroline King | Doctoral Fellow | Trust
âStiff regulatory fines for shoddy Zimbabwean telecommunication services.â Hannah Krienke | Doctoral Fellow | Trust
âGetting off the Grey List.â Laura Phillips | Senior Researcher | Trust
âR100m heist: How a criminal syndicate scammed Postbank with cloned grant cardsâ | Keith Breckenridge | Trust
This edition explores diverse and critical themes, from state dependency in biometric identification reforms in Cameroon to the role of mobile money in reshaping financial inclusion across Africa. Our scholars examine emerging technologies, such as Ghanaâs use of âliveness detectionâ to tackle voter fraud, and the innovative ways fintech is evolving in Zimbabwe with platforms like InnBucks. The issue also highlights the challenges facing major companies, such as MTN Nigeria's response to national infrastructure failures and stiff penalties facing Zimbabwean telecoms for poor service. Each contribution offers fresh insights into the intersection of technology, policy, and trust in shaping Africa's socio-economic landscape.
The WiSER Feature đ
A long South African tradition of registering but not regulating trusts.
Professors Keith Breckenridge and Jonathan Klaaren
Trusts have long been potent instruments of capital formation and government in South Africa. This was especially true in the development of the largest mining companies â De Beers, Goldfields and Rand Mines â all of which were brought into being as joint-stock corporations by pre-existing trust deeds. Cecil Rhodes and Alfred Beit were explicit that these founding documents should give the founding directors âthe fullest powersâ against the rights of the new shareholders buying the company stock in London and Paris. The De Beers trust deed, which Jan Smuts discussed admiringly in 1930, allowed for the companyâs profits to be syphoned away from shareholders to fund colonisation north of the Limpopo River. The Rand Mines trust deed included a special provision that gave Wernher, Beit and Co, as founders, 25% of the future surplus profits of the company. More recently, the Ingonyama Trust deed has given the Zulu monarch control over a third of all land in the province of KwaZulu-Natal and half of its population of 10 million people. Similar problems of ownership and control in trusts â new and old â have been at the heart of the disputes around Royal Bafokeng Holdings, arguably the most successful new mining corporation of the post-Apartheid era. The high courts in Pietermaritzburg and Pretoria, especially, have been continuously busy with disputes between beneficiaries and trustees (and the government agencies embroiled with both groups) in the many tribal and community trusts created by land reform. And the newspapers are full of lurid stories of violence as the people meant to benefit from the creation of the new land and mining trusts go to war with each other. Â
Yet the law of trusts remains today much as it was in 1967 when Oliver Schreiner, South Africaâs preeminent justice, observed that âwe have generally declined to admit openly that since a proper law of trusts is necessary for modern civilised life, and since we have not got one, all such, but only such, copyings and borrowings should be effected as are required to produce a satisfactory system.â (p. 47) The best summary of these âcopying and borrowingsâ is the 800 page textbook produced over fifty years, and six editions, after 1966 by Oxfordâs Regius Professor of Civil Law, HonorĂ©âs South African Law of Trusts. Â
In the 1980s the South African Law Commission (as it then was) began to plan to address some of the weaknesses Schreiner had identified in the 1988 Trust Property Control Act (TPCA). HonorĂ© and Cameron have described the TPCA as ârestrained and workmanlikeâ and unlikely to damage the âhealth of that vital and highly adaptable world citizen, the trust.â But while effecting some positive changes, the new act also created a distinctive point of failure in the workings of the trust law. Following the trusteeship arrangements already in place for bankruptcy and inheritance, the new act placed the masters offices in the metropolitan high courts at the core of the regulation of trusts. Deeds establishing the trust can be produced by anyone, but they must be deposited with the master; trustees may only serve after they have been appointed by the master, who may decide that trustees have to provide security and remove trustees who have been proven dishonest or bankrupt; the master is also the first point of call for the regulation of trusts, and the institution responsible for hearing reports of misbehaviour, for dismissing badly behaved trustees and calling for accounts to be provided by the trustees of how resources have been earned and spent. Only after they have appealed to the master can beneficiaries approach the courts. The masters offices took on an enormous new area of responsibility, which appeared to overlap with their established work on liquidation and deceased estates, but â especially after the new land reform trusts of the 1990s â could only really be managed by a programme of administrative indifference. While nominally responsible for the administration and regulation of tribal and communal trusts, and the behaviour of their trustees, by early 2022 it was clear that the masters could not handle the existing paperwork for estates and liquidations, and, certainly, were in no position to assess the workings of the many new communal trusts out in the countryside.
At the same time, the TPCA did little to address the problems caused by the rapidly growing enthusiasm for business and commercial trusts. Basil Wunsh, the leading authority on commercial trusts in the 1980s, had warned of their resurging (but largely unrecognised) popularity in South Africa, mainly to escape the auditing requirements of the Companies Act and the businessâ growing tax liabilities. Yet the TPCA did not confront the problems of business or trading trusts, in part because they were being investigated by another enquiry â the problems of anonymity, liability and general slipperiness remained in place. Reliable identification is an important part of this problem. âTrusts can choose any name they wish,â he warned, âand can change their names freely (depending upon the terms of the trust deed) and there is considerable scope for confusion without some kind of control over the use of names of trusts and without some method of identifying trusts by reference to their numbers.â(Wunsh 1986)
In the decades since the passing of the TPCA, the tax requirements imposed on trusts have changed remarkably. After the courtsâ found in the early 1990s that trusts in South Africa were not persons and not required to declare income, the Income Tax Act was revised to make trusts into taxable persons. This sounds clear enough, but in practice the tax liabilities of settlors, trustees, beneficiaries and trusts themselves have become highly specific and subject to almost case-by-case interpretations (often hinged on the assessment of the murky intentions of the different parties) in the courts. While trusts are required to report their incomes to the SA Revenue Services, it is not clear how many of them do, nor who is responsible â trustees, beneficiaries, settlors or the trust itself â when they do not. Â
This is exacerbated by the ongoing confusion over the legal personality of trusts, which the courts and the authors of HonorĂ©âs Law of Trusts, have tried to resolve by insisting that the âtrust is not except by statute a juristic person.â Nor is it at all clear whether business trusts â once again enormously popular in the management of financial assets, especially securitised interest payments on packages of debts â fall under the terms of the TPCA, or not. Good authorities are available for both positions. The recent efforts by the mastersâ offices to build a centralised and deduplicated registration database may eventually help to bring some order to the field of trusts in the future. But, because the centralised registration requirement applies only to new trusts, it will do little to organise the large number of existing trusts. Â
This condition of uncertainty seems, in part, to be a product of South African lawyersâ and officialsâ unease with strengthened regulation of the trust form. In Latifa Manieâs recentdoctoral thesis to design a new statute for the TPCA â including, as examples, suggested requirements for annual financial audits or the notarial execution of deeds â it is striking how little interest there is amongst the experts responsible for regulating and managing them for a heavier regulatory burden. A similar fondness for uncertainty and contingency pervades the scholarship on trust law, with the optimistic hope that matters should be âleft to our courts.â Yet, as Schreiner worried fifty years ago, managing trusts on an adhoc basis â when the rest of the English-speaking world relies on the comparatively clear principles of equity â may be a recipe for ongoing disorder. This is especially significant if Makdisi and Maitland are correct that associational life in the Islamic and English-speaking worlds derives from the settled expectations of responsibility between trustees, beneficiaries and their shared properties that have been nurtured by the equity courts over five centuries.
âïž Contributions:
âRebuilding Trust Amidst State Dependency: The Role of Augentic in Cameroon's Civil Identification Reformâ
Submitted by Georges Eyenga | Postdoc Fellow | Trust
Cameroon hands 15-year biometric ID card contract to Augentic
In 2022, we published an article in Critique Internationale where we described the collapse of the civil identification system in Cameroon and the efforts by the authorities to navigate out of a crisis that had left many citizens effectively stateless in their own country. In that article, we highlighted a positive reform occurring on the margins of this crisis: the production of passports by a new technology provider, Augentic. This reform was considered positive because the company managed to deliver an efficient service within a relatively short time, albeit at a higher cost.
At the conclusion of our article, we questioned the sustainability of this success, and now, three years later, it is clear that the passport production system continues to function smoothly. The difficulties previously associated with obtaining a passport seem to be a thing of the past. Building on this success, Cameroonian authorities have decided to entrust Augentic with the production of national identity cards under a 15-year "Build Operate Transfer" model, with an investment estimated at 70 million euros. The German company Augentic has announced plans to establish a new biometric identification system by the end of 2024, enabling the production of identity cards within 48 hours, with offices across the national territory.
If this promise is fulfilled, Augentic could emerge as the savior of a civil identification system that has been in disarray for several years, causing deep distress among Cameroonians. Economically, this reform could have significant implications for the trust relationship between citizens and commercial and financial institutions. However, entrusting the management of such population registers to a foreign company increases the state's dependency, both technically and in terms of security. This example illustrates how, in Africa, trust is being rebuilt through biometric identity documents at the cost of eroding confidence in the state's ability to resist the forms of alienation imposed by capitalism.
âThe Fried Chicken Bank.â
Submitted by Joel Pearson | Postdoc Fellow | Trust
How Zimbabweâs biggest fast-food company became a popular fintech solution
In the face of extreme currency volatility and shortages of cash, Zimbabweans have turned to a creative way of saving and transferring money - through a portal created by sellers of fried chicken and chips. Originally a means to give digital change to customers at Chicken Inn, a popular fast food franchise, the InnBucks system launched as a loyalty programme in 2021 has since evolved into a fully fledged fintech platform offering microloans and mobile banking services. Yet it has faced significant obstacles along the way. In 2022, the Reserve Bank of Zimbabwe suddenly demanded the service be suspended, insisting that the parent company, Simbisa Brands, failed to gain regulatory approval for the money transfer system. In response, the company formalised the system into a deposit-taking microfinance bank called InnBucks MicroBank Limited. The story of InnBucks shows once again how the task of maintaining the monetary infrastructure upon which many ordinary Zimbabweans rely remains incredibly fraught.
âWhat is Mobile Money?â
Submitted by Fatima Moolla | Doctoral Fellow | Trust
Mobile money, often celebrated in stories like Vodacom's R7.4 trillion surge or Tanzania's 55.8 million accounts, has reshaped financial access across Africa. But what exactly is mobile money, and why did it take off in Kenya?
Mobile money is a digital wallet on your phone, letting you send, receive, and store money without needing a bank. Imagine youâve saved up for a bike. Instead of carrying cash to the store, you send a message from your phone, and the shop gets paid instantly. For adults, itâs similar: cash is digitized by a local agent and stored by your telecom company, making it possible to transact safely and quickly, even in remote areas.
Kenyaâs success with mobile money, led by M-Pesa, stems from three factors: widespread mobile phone use, a cultural need for a secure way to send money to rural areas, and a regulatory approach that let innovation flourish. Unlike ATMs, which rely on costly infrastructure and serve only those with bank accounts, mobile money operates wherever mobile networks reach, even for the unbanked. As Bill Maurer explains in How Would You Like to Pay?, this innovation brought millions into the financial system, offering a cheaper, more flexible alternative to traditional banking, particularly in places where bank branches or ATMs are rare.
âMTN granted power generation license in Nigeria.â
Submitted by Tunde Okunoye | Doctoral Fellow | Trust
MTN Nigeria secures a licence to generate electricity in Lagos
The Nigerian Electricity Regulatory Commission (NERC) has granted MTN Nigeria a permit to generate 15.94 megawatts of electricity across four captive power plants in Lagos State. Captive power plants are designed for the sole use of the institutions establishing them, and not for resale to other entities.Â
This development is no doubt a response to the failing electric power infrastructure in Nigeria, which together with other systemic infrastructure and economic management problems, resulted in MTN declaring a loss in its half-year financial results in Nigeria. For example, the rapid devaluation (over 100%) of the Nigerian Naira over the past 12 months, resulting from corruption in the central bank, was a major factor in this state of affairs.Â
Given these circumstances which demonstrated the impact of national institutional deterioration on corporate outcomes, if it were possible for MTN to float its own central bank of Nigeria, it might have done so.    Â
âCan New Technology Solve Ghanaâs Identity Fraud Problems?â
Submitted by Caroline King | Doctoral Fellow | Trust
Ghana EC adds liveness detection to prevent voter verification fraud
The streets of Accra - already congested by cars, buses, street hawkers and pedestrians - have more recently been swarmed by trucks carrying loud speakers that promote political candidates running in the upcoming election. In addition to the political posters that seem to adorn every billboard in the city, this noisy declaration makes it impossible to ignore the upcoming election in Ghana.Â
Voter registration took place in May 2024, whereby citizens were able to register using their passport or GhanaCard, as well as the possibility to have two witnesses vouch for your identity, showing that once again the GhanaCard was not the sole form of identity document used, although this has been promised in past elections.
But the Electoral Commission (EC) has bigger fish to fry, as it was revealed that multiple registered voters were illegally and without their knowledge moved from one polling station to another. This process should only be possible with the person being physically present to verify their identity, but it seems that pictures from ID documents were used to complete the process, making it unlawful. The EC has launched an investigation in the matters and announced that they will be using âliveness detectionâ to make processes safer for voters.
This is not the first backlash the EC has faced this year, earlier in the year they were accused of misusing funds to purchase expensive registration equipment, followed by reports of stolen registration kits. The commission was able to respond and rectify their status in some instances, but these controversies do not bode well for citizens' trust in the government body that promises to provide fair elections this December, a sentiment shared by many young Ghanaians who have decided not to vote, simply responding with: âWhy? They are lying anyway.â
âStiff regulatory fines for shoddy Zimbabwean telecommunication services.â
Submitted by Hannah Krienke | Doctoral Fellow | Trust
Through a Government Gazette published last Friday, Information Communications Technology (ICT) Minister Tatenda Mavetera introduced new regulations imposing fines up to US$5,000 on telecommunications companies and internet service providers that fail to deliver reliable services. This regulatory move arrives just as Starlink, which aims to offer faster and more dependable internet services, has launched in Zimbabwe. While these new regulations are a positive step toward improving service quality, they also raise significant concerns about their potential impact on consumer trust.
The imposition of hefty fines is designed to incentivise service providers to meet high standards, but it also introduces a layer of scepticism regarding the true effectiveness of these measures. Consumers may question whether the fines will lead to genuine improvements in service quality or if they will merely serve as a revenue-generating mechanism for the government. There is a critical concern about whether the funds collected from these penalties will be effectively reinvested to enhance telecommunications infrastructure and service delivery. If the fines are perceived to be misappropriated or inadequately utilised, this could undermine public trust in both the regulatory framework and the service providers.
âGetting off the Grey List.â
Submitted by Laura Phillips | Senior Researcher | Trust
Estate agents, lawyers 'wilfully standing in the way' of SA exiting greylist, warns FIC
In February 2023, the Financial Action Task Force (FATF) greylisted South Africa because of concerns about terror financing and criminal networks operating through the country's financial institutions. Since the greylisting the Financial Intelligence Centre (FIC) has tried to tighten financial and security regulations in the hope that FAFT will revise its decision. This has put a lot of compliance pressure on the financial service industry but as this article makes clear, other sectors as well, identified as 'designated non-financial businesses and professions,' (DBFBP) including estate agents, lawyers and casinos. However, FIC is concerned that their compliance demands are not being met especially by DNFBPs. If FAFT judges South Africa not to have taken the necessary measures by February 2025, their next assessment of the country, the economy stands to suffer further.Â
âR100m heist: How a criminal syndicate scammed Postbank with cloned grant cardsâ
Submitted by Keith Breckenridge | Trust
When the Post Office was given the social grant contracts stripped from Net1 in 2017 one of the totally predictable but wishfully ignored problems was the future security of the payment system, and particularly of the identities of the grant recipients. This report describes the main features of the theft of grant money from the Post Bank, which included insiders issuing 280 cards that were allowed to make 20,000 illegal withdrawals. The full details of the audit report, and the business rescue plan for the Post Office, are available on the excellent Parliamentary Monitoring Group archive at https://pmg.org.za/committee-meeting/39399/.
Trust in Transition is a Substack, by the Trust Project, 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.