Economy

How Congo's Civil Strife Drives Up Food Prices For All

Fleeing the conflict, Masisi
Fleeing the conflict, Masisi
Cosmas Mungazi and Mustapha Mulonda

MASISI - Every day at 6 a.m., a parking lot near a roundabout in this northeastern Congo city fills with minibuses, motorbikes and heavy cargo trucks. The atalakus (ticket sellers) shout out names of destinations: "Masisi! Nyabiondo!"

Passengers board with their packages: manufactured goods, drinks, salted fish...Everyone is pushing each another, trying to get the best seats on the available vehicles. Those in a hurry scramble onto the back of motorbikes; two passengers huddle behind a minibus driver. Once the buses are finally on the road, at each stop women run up to the buses with cheese and bottles of milk and rush around the vehicles, which are still moving, pushing and shoving to be the first to make a sale.

The same thing happens on the return journey. With the enormous number of displaced persons - 17,000 displaced in a town of only 20,000 residents - and NGO workers, Masisi is attracting waves of shopkeepers from the nearby city of Goma, who travel here to sell beer, clothes, soap, cosmetics and electronic products.

This is the commercial side of the fighting that broke out last spring in the eastern region of North Kivu over disputes around the implementation of a 2009 peace agreement that integrated National Congress Defence of the People (CNDP) rebels into the national army. The United Nations esimates that the violence has displaced nearly half a million people since April.

"The conflict between government forces and the M23 rebels seems to be calmer in the center of the Masisi territory, so thousands of people have started to flock here," says André Buhima Bahibika, deputy administrator of the territory.

A price surge

However, it is a situation that is only making matters worse for the displaced persons. "The manufactured products are extremely expensive. They must think that we have already recovered after losing everything in the war! Being displaced, I can't even afford the basics," says Célestin Sengi, originally from Nyamaboko, more than 30 kilometers away.

Farming products have also risen in price: "100 kilos of beans have gone from $50 to $55. Two years ago, it used to cost $40," says Sakina Bilingo, a vendor from Goma who regularly travels between the two towns.

Even though, traditionally, Masisi used to supply Goma with meat, a kilogram is now more expensive here than it is in the capital of the North Kivu region. "One kilogram now costs $5.50 in Masisi, whereas in Goma, it's between $2.25 and $2.50," Sakina Bilingo says.

The surge in prices is not only making life difficult for the residents, but also for the humanitarian workers. "I've been here for three months now, traveling often from Masisi to the most remote corners of the territory. I have been eating at the restaurants in Masisi, and they're charging the same rates as in Goma. I don't earn enough to pay these prices," says one humanitarian worker in Masisi.

For residents, this relatively peaceful period has been beneficial: "Masisi is coming back to life. But, due to the large presence of national and international humanitarian workers, there are more and more shop owners, who aren't taking into account our average incomes. Prices are becoming unbearable and I'm really struggling to feed my family," complains one resident, Bito Kalinga.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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