Electronic payments must benefit lowest level workers - The Narok County Council's recent layoff of 100 of its employees after they protested the introduction of an electronic revenue collection system at the Maasai Mara Reserve is the wrong approach. The evidence shows that if electronic payments are to work there have to be incentives for all stakeholders, including those at the lowest levels, to embrace them. The council leaders' punitive actions come amid accusations of years of theft which they say e-ticketing will put a stop to. These leaders' indignation at their employees "rampant corruption" stems from the assumption that if they had been their employees' shoes, they would have behaved better. They would have taken action, not stolen and influenced their fellow workers to do likewise.

There is ample evidence, however, that stolen cash was shared at all levels; the clerks were merely collectors for bosses who condoned the activity, which they felt pressure to continue. The council employees' concern, which seems shared by some in the community, it that this new electronic system is equally corrupt and designed to allow higher-ups to bypass them and pocket more for themselves. They point to the County Council's 10-year contract with Equity Bank to provide the service for a 1.7% fee (of an estimated Kshs 1.5 Billion) and are suspicious.

I lived in Kenya from 1982-1984, first as a teacher in Ukambani and later attached to a USAID-funded project that worked with local governments. I had a desk in Kisumu at the provincial office of the Ministry of Local Government. I commuted to several small towns in Western and Nyanza provinces and saw first-hand the good and the bad. One council executive had not taken a vacation in 13 years. When finally forced on leave, a substitute from the Ministry took over and uncovered duplicate sets of books and a long history of embezzlement.

I now work with an e-payments company in west Africa and understand the suspicions associated with new payment technologies. The benefits of electronic money, which far outweigh the risks, need to be understood and felt by all stakeholders. Simply caning those who raise questions and telling them to follow orders or be fired does no good to long-term prospects.

In addition to introducing efficiencies impossible with cash handling, two of the best attributes of these systems are tracking (i.e. the money can be followed) and transparency (anyone with access to the information can follow these tracks).

Equity Bank is already touting the success of its Narok pilot, claiming a two-fold increase in revenues even before the system is fully deployed. As the saying goes "a new broom sweeps cleaner" and certainly a new system, closely monitored in pilot, should perform well. Delivering high performance levels over the long term is more challenging and requires an ongoing commitment, not only from Equity Bank but even more so from the County Council as the story does not end with healthy bank balances. The community must benefit from this newly-collected wealth.

Here are a few ideas.

Community acceptance should begin with public meetings and the appointment of community ombudsmen who will be provided with access to observe the tracked funds

The County Council's accounting system should be upgraded and processes put in place to, at a minimum, allow one to reconcile these funds with real-time bank balances. Two sets of books must be a thing of the past and, again, community ombudsmen should be given access.

Revenue figures should be made very broadly available, perhaps via free SMS subscription to anyone interested.

Many of the furloughed employees should be welcomed back and given the opportunity to participate fully in a newly-restructured organization. The efficiencies associated with the new collection system should eliminate some clerk positions and allow the creation of new positions, hopefully with greater responsibilities, higher official pay and the possibility of more interesting work.

Equity Bank should get specific on the recent claims of Chairman James Mwangi that their contract will bring the Council added benefit from a number of systems the bank has in place "including our branchless networks and many others." These specifics should emphasize decentralized benefits to employees and community members, including opportunities for entrepreneurship, and be introduced quickly.In this case there should be more than promises, there should be immediate and visible funded projects that benefit the broader community. One must prime the pump of community support. One idea: given the 10 year duration of the Equity Bank contract, it may be possible to explore monetization of some portion of the future revenue stream to fund immediate community projects. Private note sales have been used by investors to lease infrastructure in the USA, including public parking and highways. In addition to immediate windfalls, these arrangements transfer the risk of any future drops in revenue to the concessionaire. This is only one option, and these USA examples have been criticized, but there seems at least the possibility of a leapfrog approach, unique to Kenya, that might be both modest and transparent and capture some of the net present value of this revenue stream to jumpstart development and make converts of the doubtful.

It is too easy to place blame for corruption on the clerks and toll takers, effectively wrap them in electronic straightjackets and say "job done". Most people know that the big money is stolen out of public view. So as payments migrate from small sums of cash to billion-shilling contracts, suspicions must be seen as normal and expected, and directly addressed

As electronic payments become more prevalent, not only in Kenya but throughout Africa, those at the lowest levels can benefit greatly. But initially these benefits seem vague while costs seem clear, so they protest. They see the higher-ups, who control the accounts into which these e-monies flow, retaining opportunities to enrich themselves.

Transparent processes combined with immediate benefits and reconfigured higher-value work will go a long way toward ensuring technological adoption and to placing Kenya (and the Narok County Council) at the forefront. Without a benefit to all stakeholders, these high-tech solutions will likely suffer ongoing suspicion and be subject to low-tech sabotage.

Joel Patenaude

Nairobi Star/20/12/2011