Dagna Rams is a doctoral candidate at the Department of Social and Political Science at the University of Lausanne, researching urban management and the politics and economies at the heart of the slum communities/informal settlements of Old Fadama and Agbogbloshie (Ghana).
On a research outing around one of Accra’s informal settlements, my friend Abdallah (a slum activist and former slum dweller) and I confronted a business that struck us as a particularly exemplary manifestation of the economies found in informal settlements.
The business, located in a two-storey concrete building, towers over a dense neighbourhood of self-made housing. Each floor is dedicated to a different part of the venture: public showers and toilets on the ground floor and a school on the top. According to a colourful banner picturing plump babies in university hats, the school’s name is Genius Academy.
The owner, who had previously been making a profit by meeting the sanitation needs of the neighbourhood, recently ventured into education. “The Academy is almost a charity,” he clarified. “We only charge children a feeding fee of four Ghana cedis [less than 1 US dollar] a day.” In a cash-strapped neighbourhood, a business that is able to provide two for the price of one – that is, education and nourishment – is undeniably in high demand: all the classrooms were full of pupils to the point of breaking.
The most straightforward business idea in an informal settlement is to act like a state, the big absentee in the place, and charge for it. Build a bridge and start charging for the crossing. Build toilets and start charging per visit. Establish a school and start charging per day.
But what Genius Academy does better than the state or private institutions outside the slums is to respond to the nature of the profits in the informal sector. People can afford some services as long as they are inexpensive and paid in small instalments, rather than in big bulks. A person may be earning 20-30 Ghanaian cedis a day, but the money does not stay long in their pocket. After 5 cedis for food per family member, 1 cedi for the morning toilet, 2 cedis towards a weekly rent, 4 cedis for the child’s education, 2 cedis for transport, and so on, the budget crumbles. The ultimate gains are small and, on top of that, they come in small increments.
Density – having a great number of people living close to one another – is one of the aspects of the neighbourhood that fuels and sustains this economy of small and incremental gains. The entrepreneur behind Genius Academy recognizes that the main strategy for mitigating the small income generated from each pupil is to increase the number of pupils to the point of breaking the establishment. The classes are filled to the brink. And as only a small fee is demanded from each child, every child counts. I know a grassroots activist who established a scholarship programme in his squatter settlement only to be bullied later by a director of one of the settlement’s private educational establishment’s for “stealing business from him”.
In this context the high density of the neighbourhood, which translates into high demand for services, keeps the fees affordable in the absence of state or non-governmental subsidy. Paradoxically, high density might be a tool for profit-making and price lowering.
A similar logic of gain is also present in the businesses of the mothers whose children attend the Academy. Many work in the nearby markets selling tomatoes, onions and yams. Social anthropologist James Ferguson argues in his recent book Give a Man a Fish: Reflections on the New Politics of Distribution that commercial strategies characteristic of the urban poor are inherently distributive in their nature. Ferguson’s reflection finds its resonances in Accra. Walking through the open-air markets located next to informal settlements in Accra, one sees sellers sitting shoulder to shoulder and selling the same product from a limited stock. Is this practice simple commerce? Or is this practice a form of distribution of potential gains between the sellers? It is also hard to imagine that the same market strategies would yield a similar profit outside a dense and central neighborhood, bustling with human commotion and a high number of potential customers.
In her article “The Bridge to Sodom and Gomorroah,” Yepoka Yeebo argues that slum communities such as Old Fadama, one of Accra’s biggest, are stepping stones in people’s lives. A similar tone of hope reverberates in The New York Times oft-cited article on India’s poster slum, Dharavi. It might be, the articles argue, that the men and women live in slums and suffer from poor sanitation, poor housing, and proximity to polluted environments, but the costs of living are lower than elsewhere, and therefore their situation lasts as long as it takes to secure a better life in a better part of town.
This narrative points to a long debate between two positions on slums: one that sees the bright side that casts the slum dwellers as calculative actors, who forgo safe lives to reap future benefits, and one that is less hopeful, envisioning slums as poverty traps. Rarer are narratives that depict hopes and traps as entwined.
Density is one of such double-edged swords. In the absence of jobs that allow decent gains, dense neighbourhoods seem to offer what sparser neighbourhoods lack: more jobs and lower costs. But, there is a paradox too, namely the density is both what allows gains in this context, but also what keeps these gains at a small level.
Small gains, money leaving pockets as quickly as it ends up in them, is an important barrier for social and geographic mobility. An informal settlement such as Old Fadama (or Dharavi) is always embedded in a larger urban milieu. It is not enough to ask whether a slum as a singular entity is a stepping stone to something better, one also has to ask whether the city in which the informal settlement is located can accommodate the transition from informal to formal housing.
Accra, where Old Fadama is located, posits a challenge in this regard. Aside from a few districts that avoid easy classifications, the majority of the city’s neighbourhoods are either densely inhabited by people earning lower incomes or sparse and often inhabited by people on foreign salaries. In other words, central districts that could accommodate urbanites graduating from slums are congested, and those that are not congested require harder currency. To make matters worse, almost everywhere in Accra renters have to pay an annual advance to rent a room. In comparison, in Old Fadama as well as in other informal communities, rent, similar to the school fees at the Genius Academy, is paid in smaller and more manageable chunks.
In the slum economies of Accra, density and small gains reinforce one another. High density allows profits in spite of low prices. The urban poor, who otherwise might lack in capital and be cut off from supply chains, are still able to make profits as the limited goods they can offer meet the high commotion of central and dense neighbourhoods.
One of the common misconceptions about slums that various slum activists work to dispel is that living in slums is cheap. Ayona Datta in her passionate book on Delhi’s squatter settlements, The Illegal City: Space, Law and Gender in a Delhi Squatter Settlement, reminds readers that slum-dwellers often cannot afford having diarrhoea, as each visit to a slum toilet costs money. But what slums and their small private entreprises such as the Genius Academy might be good at, at least compared to the rest of the city, is that they offer dwellers services and housing that respond to the ways in which they earn money. There is a word in one Ghanaian language, Ga that conveys this reality: nokofio, “something small”. This word is used to signify the small and absurd gifts that trickle down to people from influence-seeking politicians, but it also stands for small gains from labour.