An African economic miracle?

        6 000 inhabitants, five clinics, two primary schools, two churches, no end of pubs, two supermarkets, a booming construction industry up to and including five-storeys buildings, four filling stations, one casino with live entertainment, a cyber café, photocopying centres, but no slums, no beggars, no street children, no banks, no government presence and (almost) no crime: not bad for a place that as recently as 1984 was no more than the usual expanse of African bush on a narrow strip of land (50 x 1000 metres approx) between the old and the new alignment of the Mombasa road, some 15 km from Nairobi City Centre.
      In mid 1980s the sand traders from Machakos district, some 30 km further east, found that by dumping their lorry loads along the old alignment of the Mombasa road, not more than 50m from the new, they avoided the weighbridge charges. Smaller lorries coming from Nairobi did not have to pay. The avoidance was therefore fully legal, taking place under the very eyes of the police. As a matter of fact the trade continues: heaps of sand still wait for buyers next to the north expanse of savannah. Two attempts were made over the years to block the old road so as to prevent lorries from using it. The first was a bulldozer digging an ephemeral ditch across it. The second was the police erecting a low-lying barrier high enough to let a car through but not a lorry. This was effective for the couple of weeks it took the lorries to open a detour around it.
      Soon after the sand trade began, the first shops started appearing. They mostly sold food and drink, but in no time other services were provided for: tailors, clinics, a locksmith, shoemakers etc. It did not take long before wooden shacks gave way to stone and cement buildings. By the 1990s Mlolongo was booming, while officially continuing not to exist. Even today it is useless to locate it on a map. An interesting phenomenon is that neither politicians , nor street preachers, nor NGOs find a ready audience in a fully employed population. And the inhabitants do not look forward to having such operators in their midst.
      What is the explanation of such an extraordinary phenomenon upsetting all the clichés about Africa?
As Henry George (1839-97) used to say, capitalist A and worker B do not divide between themselves the wealth produced by B. They divide what is left to them after landowner C rakes in his rent, usurer D his interest, tax collector E his extortions, and a whole line of parasites from F to Z their more or less visible cuts. It is evident that the Mlolongo dwellers avoid, or evade, some of that. Not all, for sure, otherwise the place would not differ much from an earthly paradise. A tentative, necessarily incomplete, analysis follows.


      What strikes a visitor first is the difference between the north side of the new Mombasa road where Mlolongo lies, and the south, which sports a few buildings and a vast expanse of undeveloped savannah. The difference is land speculation.
      Land is not free on either side of the road, but the system of tenure is leasehold in the north and freehold in the south. Result: the lease price paid to the Mavoko Municipality would be wasted by anyone not developing the land paid for. Hence the booming construction.
      On the south side, the landowner sits on his daily appreciating but empty property, unwilling to sell and waiting to make a kill. The perverse system of taxation that Kenya has inherited from the British rewards the idle landowner’s sloth, while punishing the working people’s industry. The perversion consists in the fact that the value of the idle property increases by the day not because of what its owner does, but because of what the people on the other side of the road do. If the attention of tax collector E was diverted away from the fruits of Mlolongo people’s labour towards the immoral (but legal) earnings of that representative of class C, Mlolongo would take off economically way beyond the dreams of every academic economist.

Location, location, location

      Mlolongo is far from being self-sufficient. It grows no food and produces no goods in any quantity to speak of. There is plenty of work, which keeps everyone busy, but few stable “jobs.” Its main asset is, without doubt, its strategic location.
      Whereas the distance from Nairobi City Centre is some 15 kilometres, that from its outlying industrial area east of the city is no more than 5-8 km, a long but not exhausting walk in the cool of the mornings and evenings.
      The same distance separates it from Athi River and Kitengela, on the opposite site. The employees of the two big cement factories located there find cheaper accommodation in Mlolongo than in either Athi River or Nairobi.
      The weighbridge station, where all the lorries coming from Mombasa must stop to weigh in and pay accordingly, is a net asset for Mlolongo. The clientele from the stopping lorries adds not only to its colour but also to its income, making it possible, just, to avoid the usurer’s grasp.


As there are neither banks nor other lending institutions, the locals must rely on outsiders’ spending enough on their services as to allow them to import foodstuff, “mitumba” and other necessities, while paying local wages.
      Put it another way, they are out of reach of usurer D’s grasp, and money circulates instead of being hoarded. Every single construction is an entrepreneur’s, capitalist-labourer in one; there are no loafers and no pensioners that one can see. Perhaps one day they will appear, but not now that the place is so young.

Taxman E

      He is certainly not conspicuous. People do pay VAT, but only on stuff they import from Nairobi and other centres where the taxman is active. He could not be bothered with a place that according to his records does not even exist. How many people pay income tax is anybody’s guess, and the weighbridge deals with people bringing in lorry loads measured in tens of tonnes, not of kilograms. It is an obstacle less in the way to development.

Bribery, corruption and parasitism F - Z

      When a petty bureaucrat realises that he/she has power over his fellow citizens, it becomes extremely difficult to resist the temptation not to turn that power into a source of extra income. Invoices from export-import companies, for instance, usually include the item “facilitation,” meaning bribes paid to custom officials to let imported items through. Such officials do not exist in Mlolongo. Whether they will one day is anybody’s guess. For the time being it is a bureaucrat-free area, and the locals are very determined that it stay that way.

Setbacks and difficulties

      The absence, or inconspicuousness, of so many eaters of labourers’ wages goes a long way to explain the unusual prosperity of Mlolongo, but it does not mean that people there wallow in opulence. There is no poverty in the sense of destitution, but wages are low. The population is big enough to have attracted there the power company. It has connected the place to the grid, but since the water supply is a municipal monopoly, they are still without water. Every family needs 40 litres a day, which they buy from vendors at 20 cents per litre. And there is no sewerage system. Every shop-cum dwelling space owner has built his own septic tank under the property, but in the outlying areas north of the road there are still open sewers waiting to be dealt with somehow.

Hopes for the future

      The Mlolongo people are as yet unaware of the ongoing monetary revolution with which thousands of communities are stepping over the danger of recession in so many parts of the world. With Argentina leading, they are taking control of their own currencies, thus bypassing the banking system, creating employment, stimulating small enterprises and avoiding crushing taxation.
      The first step would be to create a small company to harvest the rainwater falling off the roofs so as to solve the immediate problem; second, to create another company to plan and execute their sewerage system; and third, to sink a borehole capable of giving abundant water to all the inhabitants.
      But at this point they would doubtless attract the attention of the ever-powerful A to Z parasites. Who can tell?

Silvano Borruso
26th December 2002