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Monrovia Transfigured

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African Indigenous Financial Institutions

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Abstract

The Liberian civil wars, occurring between 1989 and 2003, may explain some of the myriad business and informal financial practices present in the country, but there exist important distinctions between rural and urban practices, and some practices are rooted in cooperative structures that existed pre-war. This chapter argues that the current economic landscape is a product of historical cooperative structures and the effects of the civil wars, which have created new coping mechanisms. The rate of reliance on informal practices (especially when compared to formal financial strategies) is so pervasive that an account of only the formal sector will miss the majority of the lived experiences of the population.

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Notes

  1. 1.

    Goldberg, Jeffrey. “A war without purpose in a country without identity.” New York Times Magazine 22 (1995): 37–39.

  2. 2.

    Bradshaw, Steven 2008. Warlord’s Quest for Forgiveness. BBC [Online] Available at: http://news.bbc.co.uk/1/hi/world/africa/7582160.stm. Accessed June 2010.

  3. 3.

    Reno, William. Warlord politics and African states. Lynne Rienner Publishers, 1999.

  4. 4.

    Ibid.

  5. 5.

    Ibid.

  6. 6.

    McDougal, Topher L. 2010. Working Paper No. 2010/69: How Production Firms Adapt to War. UNU Wider. [Online]. Available at: www.wider.unu.edu/publications/working-papers/…/wp2010-69/. Accessed June 2010.

  7. 7.

    Reno (1998).

  8. 8.

    Atkinson, Philippa. The war economy in Liberia: a political analysis. London: Overseas Development Institute, 1997.

  9. 9.

    Reno (1998).

  10. 10.

    Referring to the ability of fathers to provide for families again, rather than abandoning them.

  11. 11.

    GOL (2006). Comprehensive Food Security and Nutrition Survey (CFSNS). MOA, MPEA, FAO, WFP. [Online] Available at: http://documents.wfp.org/stellent/groups/public/documents/ena/wfp095493.pdf. Accessed July 2010.

  12. 12.

    UNDP (2006). National Human Development Report 2006/Liberia. The United Nations Development Program. [Online]. Available at: http://hdr.undp.org/en/reports/nationalreports/africa/liberia/LIBERIA_2006_en.pdf. Accessed May 2010.

  13. 13.

    Steven Bradshaw (2008). Warlord’s Quest for Forgiveness. BBC [Online] Available at: http://news.bbc.co.uk/1/hi/world/africa/7582160.stm. Accessed June 2010.

  14. 14.

    Leymah Gbowee. Mighty be our powers: How sisterhood, prayer, and sex changed a nation at war. Beast Books (2013).

  15. 15.

    John Grace (1979). Slavery and Emancipation among the Mende in Sierra Leone. (In Miers, Suzanne and Kopytoff, Igor. (eds) Slavery in Africa: Historical and Anthropological Perspectives. WI, USA: University of Wisconsin Press).

  16. 16.

    GOL (2006).

  17. 17.

    Ibid.

  18. 18.

    Abhijit, Banarjee, and Esther Duflo. Poor economics: A radical rethinking of the way to fight global poverty. Public Affairs (2011).

  19. 19.

    Paul Richards. To Fight or to Farm? Agrarian Dimensions of the Mano-River Conflicts (Liberia and Sierra Leone).2005. Oxford University Press. [Online]. Available at: http://afraf.oxfordjournals.org/cgi/content/short/104/417/571?rss=1&ssource=mfc. Accessed July 2010.

  20. 20.

    Hans Dieter Siebel and Andreas Massing. 1974. “Traditional Organizations and Economic Development: Studies of Indigenous Cooperatives in Liberia.” New York, USA: Praeger Publishers.

  21. 21.

    However, in describing visits to cooperatives, especially in rural areas, he notes that practice deviates from theory. In a visit to a Mano Savings and Loan cooperative, Siebel notices that although in theory, interest rates on loans should be 25% for members and twice as high for members, interest rates actually vary inconsistently in the cooperative’s passbooks and show a rough logic of decreasing rates for longer period of loans (but not higher rates for non-members). He attributes this to the financial secretary, a teacher, as not having accounting skills (p. 76).

  22. 22.

    Ibid., 198.

  23. 23.

    Ibid., 38.

  24. 24.

    Ibid., 35.

  25. 25.

    Paul Richards. To Fight or to Farm? Agrarian Dimensions of the Mano-River Conflicts (Liberia and Sierra Leone). Oxford University Press. [Online]. Available at: http://afraf.oxfordjournals.org/cgi/content/short/104/417/571?rss=1&ssource=mfc. Accessed July 2010.

  26. 26.

    The sexual division of labour within cooperatives reveals that most farm work cooperatives were single sex; and that the functions carried out by single-sex cooperatives tended to complement one another.

  27. 27.

    Hans Dieter Siebel and Andreas Massing. 1974. “Traditional Organizations and Economic Development: Studies of Indigenous Cooperatives in Liberia.” New York, USA: Praeger Publishers; 8.

  28. 28.

    IMF Country Reports (2016). Liberia: Selected Issues. Washington, DC: IMF.

  29. 29.

    Anonymous (1998). “Jamaican Emigres Bring Thrift Clubs to New York” [online]. Available at: http://www.nytimes.com/1988/06/19/nyregion/jamaican-emigres-bring-thrift-clubs-to-new-york.html. NY: NY Times.

  30. 30.

    While rules vary according to the club’s constitution, officers might receive 5% of the 20% interest paid on loans, or, for example, a member who borrows $100 will repay $120 to the club, $1 of which goes to the officers (.05*.2*100). In addition, there may be a $2.00 membership fee or stationary fee for joining.

  31. 31.

    This was found in the instance of weekly susu collectors who also ran Nigerian susus.

  32. 32.

    Usually, upon closer examination, they were rotational susus, which is why they are not included in the typologies found on page 33.

  33. 33.

    Workplace credit unions were drawn from voluntary contributions from member’s salaries, although in the case of an emergency the workplace might also have a fund for workers.

  34. 34.

    Tinker, Irene. Street Foods: Urban Food and Employment in Developing Countries. Oxford University Press, 1997.

  35. 35.

    Or it may not have been conducted by the survey respondents, who were not all heads of households and were frequently elderly. As the comprehensive assessment of the agricultural sector (MOA 2006) noted, “elderly people with minimal access to traditional support systems, which had broken down during the conflict period, represent a vulnerable group”.

  36. 36.

    Otherwise, findings from the two surveys largely corroborated each other.

  37. 37.

    Various challenges, however, mostly technical and financial, were found contributing to low margins of return.

  38. 38.

    Youth as young as 16 sometimes were given a small section of family land, in lieu of allowance, that they were allowed to plant and keep the profits from.

  39. 39.

    Abhijit, Banarjee, and Esther Duflo. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs (2011).

  40. 40.

    Following this came the earnings from an apprenticeship, a salaried job from the formal sector, or from short-term construction contracts. Only then did loans from informal sources such as savings club and susus feature as the source of an individual’s business. This may indicate the primary function of susus for income and consumption smoothing purposes rather than for actual business capital.

  41. 41.

    Monique Cohen. 1996. Household Economic Portfolios. AIMS (Assessing the Impact of Microfinance Services) USAID. [Online]. Available at: http://www.eldis.org/vfile/upload/1/document/0708/DOC2932.pdf. Accessed February 2010.

  42. 42.

    Monique Cohen. 1996. Household Economic Portfolios. AIMS (Assessing the Impact of Microfinance Services) USAID. [Online]. Available at: http://www.eldis.org/vfile/upload/1/document/0708/DOC2932.pdf. Accessed February 2010.

  43. 43.

    Feige (1979), as quoted by Janet MacGaffey (1991). The Real Economy of Zaire. Pennsylvania: University of Pennsylvania Press.

  44. 44.

    For example, Robertson (1892), Keynes (1930), Chamley (1984), Bryant (1987).

  45. 45.

    For example, Khan and Ajayi (2000), Sharman (2012).

  46. 46.

    Paul Collier (1998). On the economic consequences of civil war. Oxford Economic Papers. 51(1), 168–183.

  47. 47.

    DFID (2013). ESRC-DFID Joint Fund for Poverty Alleviation Research. [email].

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    Julia Smith-Omomo

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Smith-Omomo, J. (2019). Monrovia Transfigured. In: African Indigenous Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98011-9_3

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