Ruth Mwangi has worked to design, test and coordinate numerous projects within informal settlements in Kenya since 2004. She is on the Board of Directors at Grassroots Economics Foundation where she leads the foundation in programming, strategy and operations. Grassroots Economics are the industry leaders of the implementation of Community/Complementary Currencies in Africa. Ruth’s skills and expertise have also been sought by organizations such as Bridge International Academies as well as Garden of Hope Foundation where she’s part of the Board of Directors.
As a Finalist of the 2016 Echoing Green Fellowship and a 2016 Mandela Washington Fellow, Ruth has had the opportunity to speak at various international platforms such as the Hague's Society for International Development - Netherlands Chapter (SID - NL), lead, train and direct numerous groups, conferences and events; works that have well been recognized by global organizations such as the One Young World, where she has thrice been selected to represent Kenya. She possesses a Bachelor of Arts degree in Business Management - BABM (Hons) from the University of Sunderland. He strengths and interests lie in Strategic Management, Public Relations and Corporate Governance. Ruth’s vision is to overcome poverty and the flaws of the economic crisis in our society.
Q: Can you briefly describe your organisation?
Briefly, Grassroots Economics is an Not-For-Profit Foundation that started under the name KORU in 2013, and that creates and operates local currencies for low income communities in Kenya.
People in low income communities often have goods and services to trade, but they lack money with which to purchase each other's wares. Business owners need a way to exchange goods and services without relying on scarce national currency.
Our community currencies are backed by networks of vendors, craftspeople and schools and enable trade to occur between people who don't always have enough national currency to spend. I’d like to clarify that these local currencies do not in any way replace the national currency.
We currently have 5 programs running: 2 in Mombasa and 3 in Nairobi. This represents over 1,200 businesses and schools within these communities.
Q: What are the main benefits of using local currencies in these communities?
The first benefit for business owners that partake in the program is that it typically increases the number of customers that visit their shop. Secondly and maybe more importantly, what we keep hearing from the users is that they feel they have taken charge of their economic future. They are also more insulated from variations in the national currency.
Another important advantage is the increased trust within the community. This is particularly important in a country with rampant corruption. Finally, and in general, the local economy is grown.
Q: Is local currency made to disappear after the community has increased wealth or not? Is it designed as a temporary or a permanent measure?
This is a point we sometimes have trouble getting across so it’s great you are asking the question. The local currency is made to disappear. As I already mentioned, the currency is not there to replace national currencies. It is just there to stabilize local economies in low income communities. As it increases the size of the local economy, the idea is that it should increase the local wealth to a point where they do not need our help anymore.
We believe this is very important because if you take Kibera Slums for instance - one of the areas where we work - there are more than 600 NGOs working there and hundreds of millions of dollars have been used to improve the status of this slum. The slum still stands and I have real trouble seeing any major difference over the last 10 years. It is like a certain balance has been struck between the poor, the aid and the NGOs. People on both sides become dependent on the system. We do not want to become institutional. We want to help and then leave.
Q: How do you evaluate your impact?
We use an application called the Open Data Kit (ODK). We visit our vendors and users, we ask them what issues they are facing, how much they are able to save in the last 7 days. Then we analyse the data. We also have control groups to see how trade is with and without the local currency.
To give you an example of our findings. In low income communities in Kenya, December is a high time of spending to prepare for the New Year, therefore making January a very tough month as far as scarcity of the national currency is concerned. What we see is that with local currency, the local economy stabilises much faster.
Our wish to go digital would also help data collection and our ability to more finely understand the impact of our programs.
We also look at a variety of social indicators like: child school attendance, healthcare, etc. We also encourage donor organisations for other projects to give in local currencies because we have found that it is a good way to decrease corruption and ensure that donations indeed reach and stay within the communities.
In general, we are very encouraged by the results we are seeing.
Q: What is the next step for Grassroots Economics?
We wish to bring rural areas into the mix so that the businesses using our local currencies can source produce directly from the farmers thus making the community more sustainable.
We also want to create cooperatives to strengthen the whole enterprise and digitalise the currency, use M-Pesa for example and create a “local” digital currency. We hope to find some kind of agreement with Safaricom.
Q: How do you see development in Kenya moving forward?
I try to think of Germany in 1945, the day after the Second World War ended. There was no economy, no infrastructure, no government. That is roughly 18 years before our independence and look at the difference in our countries today. At which time, we were well positioned for our future. The British rule left us with good institutions a great model for education, and a few educated elites.
That elite unfortunately soon became corrupt and that started a vicious circle and today, if you get stopped by the police, you know you will have to part some money regardless of what you have done or not done. So yes, we are plagued by greed, tribalism and corruption.
On the other hand, there are so many amazing young people and entrepreneurs in Kenya and Africa in general. I am a laureate of the Mandela Washington Fellowship, created by President Obama as part of the Young African Leaders Initiative (YALI) and as such, I know am asked to review candidacies today for the new recipients. I am amazed by the people I met in my class and by the people I am discovering in the applications.
We have come to understand that the solution won’t come from our leaders. Youth (who make up over 50% of Kenya’s population) has to takes its rightful place within society and bring about the change it wishes to see. That is how Kenya and Africa at large will develop.
The other important aspect for development is community building. People in Kenya do not trust one another. They trust foreigners more or members of a given small community such as the Somalian Diaspora or the Indian Community, who are known to be very good businessmen and women. In Nairobi, one of the areas with the highest amounts of businesses is Eastleigh, we call it Small Mogadishu. Other Kenyans own similar businesses than the ones there but we prefer to go to Eastleigh because we trust them more than fellow Kenyans.
To build trust, we need to start at a community level, like we do with the local currencies, where people from different tribes learn to make small loans to each other and learn that the other pays it back, and so forth.
Q: You mentioned Africa’s Youth as a way to develop the continent. How do you see the increasing isolationism of the Global West? Is it a good or a bad thing for Kenya?
It is both.
We need partnerships to develop. Kenya, like any other country cannot work in isolation. In recent years, these partnerships have been changing from Europe and America to China.
Having said that, we also need to stop relying on other countries. Dutch Aid just decided to reduce aid to Kenya because they feel the country has reached a level of development where it should be able to fend for itself, which is great.
We need to stop the “Helping that hurts”. I mentioned Kibera before. If you are an NGO and want to call a meeting of local people to offer a training in skills and/or information, people expect to receive some money just for showing up to the meeting. This Dependency Syndrome is a real problem. It creates what we sometimes refer to “Professional workshop attendees”.
Another example of Helping that Hurts is within refugee camps. Aid was given solely to women because they were more trustworthy in the way they used the aid to buy food for the family than men did. This led to a lot of broken marriages as the African culture (and many other cultures) dictate that the man is the sole breadwinner of the household. All NGOs try to help but for a lot of them, as they help, they destroy.
The isolationism of the North ultimately reminds us that we can succeed ourselves. It makes us more responsible. I find that awakening is a good thing.
Q: This brings me to my last question about development and that is the Automation. Is automation and its impact on work in the future an issue you feel is discussed in Kenya?
It has already begun but I think people believe they have time yet. If it happens in the next couple decades though, we will definitely be caught off guard because it is never discussed. For now, we have bigger problems to deal with, such as poverty and corruption, making automation a non-issue; hence the only way we have dealt with the rapid growth of automation is to make the best use of the little that we’ve already experienced, such as the use of technology to multiply trade (e.g. trading using mobile-phone technology). It still hasn’t hit us that in a few decades (possibly less), most of our manual labour will be taken over by technological equipment, high-tech machinery and robots.
 The world’s second largest slum after Soweto in South Africa. Kibera is home to roughly 1M people, though figures vary wildly.
 Some estimate that there is one NGO for every 11 residents in Kibera slum. So even taking the lowest population estimate of the ‘recorded’ population of 170’070, that is over 15’000 NGOs.
 M-Pesa (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer, financing and microfinancing service, launched in 2007 by Safaricom.