Globalization of technology and the mobility of money

The ability to send and receive money is essential for migrant communities everywhere. Technology is central to the mobility of money and associated global processes.

Over the course of 2024, the Carnegie Endowment for International Peace and the City of Los Angeles convened more than a dozen listening sessions to support the city's development of its Africa trade and investment strategy for the first time. The listening sessions brought new voices, perspectives, and geographies directly into the policymaking process. In support of these sessions, selected scholars developed exploratory essays on California-Africa connections. These essays are intended to inform policymaking considerations and identify potential issues for future consideration in the development and analysis of California-Africa connections. They are both expert and experimental, seeking not only to shape policy but also to generate additional scholarship.

The ability to send and receive money is essential for migrant communities everywhere. Given the high costs, lengthy delays, and rigorous regulatory rules that impose a burden on financial institutions such as Western Union or traditional banks, many migrant communities have developed their own financial networks that facilitate and shape routes and circuits for transactions. Although these networks have been the subject of considerable scrutiny and punitive regulation, the circulation of money at the supranational scale must be understood as central to substantiating and mediating urban life and economies. At the same time, technological advances are reshaping both global processes and localized experiences of transnational remittances. In an effort to think about the relationships between African and American cities in generative and mutually beneficial ways, we adopt a diverse set of concepts that help promote reflection on this topic and related interests.

The transnational mobility of money

Places are connected through the transfer of ideas, the migration of people, the movement of goods, and, of course, the flow of money. Indeed, the most material movement, such as the import and export of commodities and the circulation of people, is necessarily supported by money transfer systems. Money moves in various forms and ways: cash carried on ships and planes, SWIFT reconciliations between international banks, transactions communicated and documented through technologically enabled distributed ledger transactions (such as Bitcoin), trust-based proxy networks (known as the hawala system), and more. All of these modes of movement have costs. They also carry risks, including theft, exchange rate fluctuations, and compliance fines.

Many development finance institutions and multilateral organizations, such as the World Bank, the African Development Bank, and the United Nations, quantify the movement of money by estimating the value of a remittance corridor or net trade deficits. However, given the complexity of measuring these values ​​due to illicit, informal, and undocumented flows, a wide range of indicators and rough estimates are used to fill in the gaps in the information.

While it is useful to stay close to this "real" value of transactional payments, this article focuses on restructuring these flows, using concepts that anticipate notions of Africa as a place of innovative development and advanced technology. We propose the concept of the globalization of technology as a way to make sense of the enriching relationships that have been created or encouraged by technological change. The globalization of technology allows us to see, if often ambivalent, ways in which technology is central to the movement of money and associated with world-making processes.

Worldmaking: Beyond the Local-Global Binary

What do we mean by worldmaking? The term “worlds” refers to material, infrastructural, social, and cultural assemblages that are created through various actors and diffuse processes. The concept of the globalization of technology has been essential in breaking down notions of the global and the local. By thinking about overlapping, multi-location worlds, rather than discrete, localized places, globalization scholars challenge unhelpful categorizations, including binaries, such as formal and informal, and indigenous and foreign.

For example, imagine a financial technology (fintech) startup conceptualized in Nairobi, Kenya, by a founder who grew up in London and Kisumu. The startup is conceived in Cape Town, hosted in a few data centers, funded initially by European development aid and later by North American venture capital (VC), and eventually expands to Lagos, Nigeria, or Accra, Ghana. This reality opposes a simple classification as either local or global, large or small, or dynamic or fixed. By mapping these urban worlds and valuing the processes, people, and technologies that create them, we can focus on interconnections and relationships that give rise to specific and enduring networks.

Worlds are constituted through “continuous processes of composition” and are made and remade. They are produced by routine and sometimes mediocre activities that, due to their sheer scale, have enormous reach and impact. However, these everyday processes operate within broader structural contexts, such as changing weather patterns, extractive modes of accumulation, and the so-called war on terror, which is discussed later in the context of Somalia. In this sense, the worlds that connect urban spaces in Africa and those in California are created through complex relationships, some with fluid components and others with enduring ones, neither of which can be separated from the histories that give rise to them. The dynamic nature of worldmaking is instrumental in the formation of new geographies, circulations, and places, territorialized and realigned through derivative and dynamic flows of people, ideas, products, and money.

Indeed, worldmaking and urban worlds offer an alternative to reductionist and evolutionary perspectives on Africa and its cities. These limiting perspectives are perpetuated through literature, politics, and media, where African experiences are structured as parochial and provincial, filled only with suffering and crisis. From influencing popular culture to creating rich economic networks for trade, worldmaking reimagines Africa not as the periphery but as central, important, specific, and innovative urban networks.

Africa Technology: Beyond Africa as a Frontier

It is difficult to think about innovation and networks without considering technology and its central role in reconfiguring urban worlds. Africa is often viewed as a technological frontier, a place largely untouched by the expansion of technological advances and infrastructure. While some see an exciting and “untapped” market, others fear that the expansion of technology will disrupt indigenous practices and change African life and culture. The globalization of technology, as we move forward in this area, rejects both techno-optimistic and techno-pessimistic perspectives on technology in Africa. Technology will not “save Africa” from the autocracies of the past or from future exploitation; however, it cannot be rejected as a whole, as it will be instrumental in creating more just systems and economies.

The globalization of technology also rejects the idea that technology is not African or that African societies only alter technology, not create it. Thinking about technology from (rather than for) Africa, the Nigerian-American author Teju Cole, speaking to a room of European scholars at a conference in Germany in 2015, delivered a reading titled, “Do African Digital Natives Wear Sheer Skirts?” His reading challenged the notion that digital technology was not authentically African. In 2018, following the hype and excitement surrounding the imagery of technology in Africa on display in Wakanda, the South African writer and poet Mohale Mashigo titled a chapter in her collection “Afrofuturism: Ayashis’ Amateki.” The title refers to a song about a pair of shoes that are cute but too small to fit comfortably. (She published an abridged version of the essay as “Afrofuturism Is Not for Africans Living in Africa.”) The title reflects his dissatisfaction with the widespread adoption of ideas about African technological futures, cities, and imaginaries emanating from the diaspora. Indeed, from Lagos to Johannesburg, commentators on Twitter reminded the world that high-speed trains and digital dashboards already exist in many African cities and should hardly be considered a fiction.

In support of this critique, prominent Africa scholar, social theorist, and activist Abdou Maliq Simone emphasizes the inseparability between African urban life, everyday technicity, and the lifeworlds and material effects of technology. Simone draws attention to how African systems, practices, and networks are calculated, mediated, and conceived. Notwithstanding the ways in the African context (and in the diaspora) this technology has been violently used to categorize, control, and extract, Simone writes that “the logic and instruments of technology can facilitate a progressive reimagining of what it means to inhabit the urban sector.” This reimagining takes us beyond past developments and present realities, exposing us to possible and probable futures of technological advancements.

Speculation: Between calculated risk and uncertain futures

Projects that seek to intervene in existing ecosystems, changing their functioning in an effort to produce different outcomes, must engage with a somewhat esoteric question of the future. The future is where decisions made today will manifest. Furthermore, the future is where transitions already underway, such as the digital transition in Africa, will be enacted.

Against the backdrop of Africa's rapid change, it is useful to consider the techniques and technologies associated with conjecture, imagining, prophesying, and speculating. This is where we move from describing words that exist to imagining others that could exist. Although speculation is sometimes associated with finance (think of day traders or real estate investors speculating on the future value of a stock or portfolio of assets), there is a rich body of work in the humanities that engages with the concept in critical and generative ways. This rich body of work is useful for thinking beyond the classifications of imaginary elements of development that have animated much of global policy toward Africa since Bretton Woods.

Economic anthropologist Laura Bear offers a useful and generous account of speculation.9 She argues that speculation infuses issues (hopeful or dystopian) with the technological and financial logic of durable accumulation, creating a platform for making sense of the limits of (un)certainty. Building on this, social anthropologist and queer theorist Shaka McGlotten recalls that speculation is “intimately linked to seeing, to mirrors, to spectatorship, and to the spectacular.” In this sense, speculation reflects a commitment to developing measurement tools that dissect the world in ways that make contingent futures visible. These tools seek to discern the possibilities of uncertainty from the calculability of risk, the former being unknown and the latter potentially measurable with the right information and data. This draws attention to the fundamental role of uncertainty in speculation.

Of course, the domains of calculation are intensely biased. For example, while health insurance companies appear to be able to project and therefore price the risks of death and illness in specific populations, African urban studies scholars still seem unable to obtain decent figures for the current population of major cities and urban areas, leaving aside viable predictions for their growth trajectories even in the medium term. Notwithstanding the many data-related challenges, African cities promise to be exciting places for testing and experimentation with specific technologies. From platforms that support property markets (property management technology companies) to advances in electric vehicles (e-mobility), various urban sectors are using AI (artificial intelligence) and machine learning in many (if not most) aspects of urban life, mobilizing whatever information is available and using substitutes for what is missing.

While these calculative and algorithmic tools, such as digital dashboards or gaming technologies, are powerful and undoubtedly achieve more, they cannot be speculated on their own. These must be used. Speculation demands that these tools be put into practice. In this sense, speculative world-making practices are about labor, the work involved in imagining the future and putting that imagination into practice, with a greater or lesser appetite and aptitude for risk. In this sense, technology not only exists, but is put into practice, achieving meaning and value through its participation in speculative processes. This meaning and value are closely tied to the worlds it will create, as well as to those it imagines or hopes to create.

Financial Technology and Remittances: Globalization of Transnational Technology

The above discussions about world-building, African technology, and speculation can be distilled into a conversation related to fintech. As a hybrid of finance and technology, fintech captures innovations in the delivery and reach of traditional financial services, such as credit and insurance, as well as entirely new products, such as mobile money and cryptocurrencies. The growth of fintech, particularly in the African context, is based on the recent expansion of access to mobile phones, information services, related information, and ICT (Infrastructure Communications Technology). California-based tech companies have been important innovators in the fintech space, some with an eye toward optimizing advanced markets and others oriented toward global development goals. In Africa, the majority of VC (venture capital) has gone into financial services, including fintech and digital banks. One area where fintech has sought to improve is remittances. This has been particularly important in California, a state that has benefited immensely from global migration and where migrant communities live, work, and contribute to the culture and economy.

Remittances are characterized by a high volume of low-value payments, aggregating to determine the relative size of corridors between different locations. Transnational remittances have been a key area for innovation around financial models and technologies. It is noteworthy (and notwithstanding data limitations) that the value of remittance flows frequently exceeds aid or foreign direct investment (FDI) invested in African countries. This reality has impacted the financial industry and the development sector, which have both sought to make transnational remittance processes more cost-effective and address the perceived risks associated with remittances, both for migrants and for nation-states. New technologies and models have sought to bypass a wide variety of costly processes, including the monopoly on the international banking communications network SWIFT and the laborious know-your-customer legislation implemented after the 9/11 terrorist attacks.

In some African contexts, fintech-enabled remittance innovations are part of tech-enabled startups and ecosystems that are said to mimic, though in many ways fail to mimic, California's tech worlds. Fueled by the reliance on risk-capitalized fintechs, transnational mobile money options have multiplied with more or less satisfactory offerings. Every year sees the launch of new apps that attempt to capture diverse customer bases, challenge regulatory blockages, and facilitate payment pathways connecting disparate geographies. For example, the WapiPay app focuses on transfers between Africa and Asia, a corridor currently devoid of functional options. Regarding remittances, many companies have expanded their service offerings, partnering with other technology companies, or expanding and designing their platforms by, for example, establishing chat functions, micro-lending facilities, and even insurance options. Given the concerns sent by remittances regarding the use of funds, the option to purchase specific products, such as fuel or groceries, has proven to be a minor departure from sending expendable cash. For example, Mukuru offers a WhatsApp-based service that allows people anywhere to purchase fuel or groceries for those in Zimbabwe and some other places where the platform is active and where soft currencies are prone to devaluation.

These remittance platforms are often short on cash, offering software as a service and building on existing infrastructures, whether supermarkets or e-money, to manage digital currencies or securities. An example of software as a service is Uber, a company that doesn't own vehicles or hire drivers, but instead has a digital platform as its service offering. However, not all technological advancements in the remittance flow space are taking place through California-style venture capital startups/ecosystems. And not all innovation seeks to disrupt legacy networks. In fact, established and expanding mobile phone companies, arguably at the forefront of technological innovation, supermarkets, and retail outlets are increasingly partnering with remittance companies, offering the last stage in the remittance value chain (see, for example, Shoprite Send). In many cases, traditional telecom companies, rather than tech startups, are paving the way for remittance innovation. Somalia, for example, presents an additional alternative technological scenario. The locally developed country's telecommunications sector has developed intensive networks of money transfer infrastructure, both in the Horn of Africa and beyond.

In Somalia, the technologies to support remittances were not imported due to Silicon Valley-style disruptions, but were shaped through Somalia's contingent history—an extreme case in which the formal financial system deteriorated, Somali people migrated around the world for work, and clan-based networks of trust offered an alternative to the state. Intertwining finance with logistics, dense networks of agents were created to facilitate the flow of money across borders that were once fraught with friction and porosities exist worldwide. Often referred to as hawala (an Arabic term that loosely translates as "transfer"), these networks rely on trust in alliances, managing debits and credits between cities and regions. These networks rarely require the actual movement of money and often work alongside logistics networks, trading goods such as livestock or cement to settle debts across the network of agents. Today, Somali ICT companies are developing based on these hawala networks.

A good example is Hormuud Telkom, a leading mobile money platform in Mogadishu. Notably, Hormuud did not emerge as the expanding frontier of a global company (as is common for African telecom companies). Instead, Hormuud's expansion and growing importance was a response to the decline of the Somali hawala business, Al-Barakaat. When Al-Barakaat was listed as an Al-Qaeda affiliate by various United Nations and US agencies, it was subsequently shut down. Hormuud was established in 2002 by Ahmed Nur Jimale on Al-Barakaat's assets in Mogadishu, including landline telephone lines and an existing client. Following this, Hormuud Telkom pioneered the widely used EVC-Plus mobile money service, recently developing even more advanced platforms like WAAFI. Since then, Hormuud has developed robust networks (such as cabling, land ports, and data centers), distributed agent networks in most global cities, from London to Los Angeles, and created digital platforms that allow mobile phone users to make cross-border payments from anywhere. Although the company was developed locally, it has made a global footprint, connecting Somalis around the world. It is a vital example of how technology from Africa connects diaspora communities to global networks.

The case of Somalia reinforces the vital role of technology in developing circulations between Africa and the world. It offers an alternative development scenario to the California financial technology expansion story, much discussed when discussing the role of North American cities in African development. It reminds us that technology is not always imported from elsewhere but can also be developed in Africa and have a global reach and impact, driving interoperability and connection. These innovations and technologies in the money movement space (both real and virtual) cannot be conflated with big tech, nor can these worlds be reduced to small or informal practices. African companies, both startups and established ICTs, are both involved in world-making and future-making. The thickening and promotion of technological networks that support remittance circulations reflect the vitality not only of micro-worlds, but also of technological worlds. Here, technology shapes finance and trade. Strengthening connections, for example, between California and Africa, requires working with these technological worlds. They exist on a scale and regularity that any policy related to relationships between places must contend with.

Por: Liza Rose Cirolia and Abdullahi Ali Hassan