Nurses in several Kenyan counties went on strike recently, the latest in a series of work stoppages that have closed public hospitals around the country since 2012. In addition to heavy workloads and a lack of opportunities for promotion, the nurses’ union claims that payment of salaries and other allowances have been delayed. The heart of the issue is “devolution,” or a shift of resources and management of key government functions to newly established county governments. Union representatives say devolution – a key tenet of the 2010 Kenyan constitution – has caused inefficiency, cronyism, and corruption in some counties, leading to late salary payments for health workers. They want payments to be managed at the national level – a profound irony, since devolution was intended to give local authorities more flexibility control over inefficient or corrupt bureaucracies in the federal government.
It’s noteworthy that this is occurring in Kenya, often lauded for the widespread adoption of mobile-based cash transfers, utility payments, insurance, loans, and other financial services. The nurses’ strike suggests that the mMoney ecosystem in Kenya still has a lot of room for integration and institutionalization, and that back end processes will play a major role in a successful build-out of the mobile money ecosystem.
The development community, mobile operators, banks, and a handful of local champions have been working hard to facilitate a transition to a cash-light society in Kenya and other emerging markets. Organizations like the Bill & Melinda Gates Foundation, the GSMA, and others see digital financial services – particularly for institutions like schools and hospitals – as a way to increase transparency and accountability while reducing the costs and risks of cash transactions. They are investing heavily in back end systems, technical capacity, and governance structures to create a mobile money ecosystem that would enable digital financial services for government employees, SMBs and consumers. Inefficiencies or corruption at the county level show that infrastructure, incentive, and capacity issues may be easier to solve on a national level. But development organizations will have to be careful to respect local policies (in this case, a mainstay of the new constitution) while advocating for broad impact and scaled solutions.