Friday, 28 March 2008

The Mystery of Tradition: why Tradition and Capital May Work Well in Africa and Not in the West

Two similar, and parallel, private agricultural initiatives in Ghana illustrate the potential for working with existing traditional hierarchies and community structures in Africa that big multinational companies often ignore / do not understand.

A local entrepreneur of rural origin and with limited previous business experience (second hand cloth imports), has used collaboration with the traditional leaders and bigger farmers as a solution to common problems, such as: technological innovation being undermined by superstitions, lack of cash and access to agricultural inputs among rural dwellers, insecurity of loan repayments and cash transfers, speculative competition. The company has rapidly increased its turnover, profit and is now borrowing commercially to expand its production into new regions.

At the same time, a similarly structured agricultural scheme led by highly trained financial experts and a multinational food company failed to ensure small holders’ productivity increases and loyalty. The company moved to commercial block farming where, while still struggling to make good commercial returns, the impact on the community and poverty is much lower and more limited.

I highlight these and other examples from Malawi and elsewhere in a recent essay. My argument, informed also by my work at Emerging Markets Group, is that big multinational companies and many donors / foundations, have been too focused on working through formal systems that may not work well in Africa. There has been a consistent attempt to try to make African ‘capitalism’ more like in the West rather than adapt to the potential of the indigenous traditional systems. This has led to lowered ability to solve inherent problems and has led to a resistance to invest in commercially fertile grounds.

No comments: