Web 2.0 - African style

Give us a bit of water and some sand and we will build the Empire State building. It amazes me how innovative people in Africa can be. Natural born entrepreneurs. I know we have loads of issues and problems - and our own baggage to carry as well. But some of the things we do when we get our hands on something new is just “awesome”. (I have been in the US for too long! Picked that one up from my daughter…) The way people in Africa use mobile phones and the Internet in Africa is way beyond what any of us (or foreigners) predicted or dreamed of.

I know. I said that we in Africa are staying disconnected from the world. But that is just part of the story. Yes, we struggle to stay connected but don’t give us half a chance or we will rule the world. Once we get off World of Warcraft or Facebook. Boy are you lucky we don’t use that too often. Imagine people who like being connected to each other having the opportunity to do social networking while in different places! World here we come! I wonder if we will ever get off the Internet and still live and interact with each other if we were given that opportunity? Thank god for staying disconnected - it allows us to stay connected.

But I have two other stories about us and our version of web 2.0 to tell you about. The first one starts in Zimbabwe…

Yes. Zimbabwe. The country that is going through hell at the moment. And it has been going on for the last few years. But give someone a mobile phone and see us fly. OneWord Africa (one of my favourite sites - hidden agenda, I worked with them for a while a few years back. Hi Patricia!) reported on how people are using mobile phones to go hi-tech in campaigning for the upcoming election. It is not that easy to campaign in Zimbabwe at the moment. Crazy Uncle Bob isn’t what he used to be. Democracy isn’t what it used to be in Zimbabwe. He isn’t allowing much freedom for people to campaign for anyone other than him. And he instigates violence and riots against the opposition. So what are people to do?

Well. He made the mistake of allowing people to have mobile phone. And when you have some water and sand… We campaign. The people in Zimbabwe text each other left, right and centre to get the message across. But not just personal messages. No way. They do it African style. In a way to make sure people know where it comes from and who they all support. A group with no place to meet - but a group none the less. They text a message that identifies them as a supporter of a specific party or person. A simple “Vote for Simba” to highlight support for Makoni and a longer “Have you not suffered enough? Morgan is the solution” for Tsvangirai’s faithful. Simple, but beautiful and genius. Bob - you control the radio, television and newspapers, but you can’t control the keypads.

But they don’t stop there. No way. They go further. Ring-tones. Here it is more about opposition to Crazy Uncle Bob than support for an individual. The opposition play a local song, which asks in Shona: “How long will you vote for ZANU-PF?“. Pure genius. People phone you and others hear. One snag. Run when the phone rings and you are close to the police! Pure genius for keeping democracy alive though. I almost gave up hope on Zimbabwe, but the people proved me wrong again. And I like being wrong in cases like this.

My other story comes from one that was told to me by Martin Feinstein a few years back. He used to run Proudly South African, but now runs Enablis that tries to help entrepreneurs use the Internet to enhance their business - and support them financially and with management support. (I can’t vouch for them. They have good methodology, but I don’t know how effective they are. Just haven’t been keeping an eye on them. So this is not a plug for them.) He was telling me about this guy in Soweto who found a brilliant business idea - a pure win-win (almost). And all he needed was a computer and a shipping container for an office and storage. His plan? So simple. He used to go to one of the markets every single day to buy his stuff. And there were hundred, if not thousands, of women selling their goods. But they closed every single Monday to go to the wholesaler to buy their stuff they sell. They all got into the taxi’s and travelled into the city to buy their goods.

And what a loss for their business. No discount because they bought little amounts at a time. Loss of business for the day they were closed. And money for their travels. And the wholesale had to deal with so many people at the same time. His idea? Why not get them to place their order with him and he logs it into the computer and sends one order (with separate packaging) to the wholesaler. The wholesaler then delivers because it is a huge order and gives him 15% discount for the large order. That is his cut - the 15%. The women didn’t pay anything more than the usual and actually saved because they didn’t have to pay the taxi. And they were open on Monday’s for an extra day of business. Genius isn’t it? Everyone won. Okay - the taxi guys lost out, but less sympathy there with their driving skills… The plan was not rocket science, but still genius by the guy to see the opportunity. (Sorry - never got his name.) And what did he want from Martin and them? Just help to get a container and a computer. Less than $2,000 and bam you have a highly profitable business. I love that story - it tells us so much about the entrepreneurs hiding away all over Africa.

Okay, so it is not the typical web 2.0. But we are not “typical” in Africa either. We take technology and turn it into something that helps us make our society better - and ourselves better. The fastest growing mobile phone users in the world? USA? UK? Maybe India or China? Try Africa. We have few landlines. No problem - we’ll go wireless. Yes, we are disconnected from the world. But we are so connected between the ears.

from Angry African on the Loose

Has Africa reached a ‘tipping point’?

This was a phrase coined at the Africa Investment and Finance Conference on 22nd February 2008. The consensus of the optimistic audience was that Africa has moved on from being the destination of only high-risk investments, to a burgeoning market where the investment rewards are waiting to be reaped. The African Development Bank proudly asserted that now only 3% of their investments in Africa are unsuccessful. And in a time of extreme volatility in the markets of the developed western world, Africa offers a promising alternative destination for new capital.

Companies who ten years ago took a long-term view of investing in Africa are now reaping the benefits. Celtel for example has experienced extraordinary growth in the mobile telephony market, and has recently been involved in setting up Satya Capital to invest in other business opportunities on the continent.

And it is not just one sector that is showing high potential, but expectations of growth are predicted in the hotel industry, the power sector, infrastructure and construction, mining and financial services. It is not just big business either – SMEs growth is also ready to explode.

Amidst all this possibility, what about the bouts of political instability that we cannot deny occur? Kenya being the most recent example which is currently experiencing an economic downturn as a consequence of the violence. The delegates I enquired of at the conference all concurred – it was anticipated to only be a short-term fall (with today's news a sign of real hope).

The future for Africa is considered bright and it is the long-term view that the conference delegates considered all important for the continent.

The Africa Enterprise Challenge Fund: a better way to make poverty history

Behind the headlines and campaigns, the key to making poverty history in Africa actually lies with its indigenous entrepreneurs. Not only an engine for economic growth, small businesses are also the source of most jobs and opportunities for poor people.

That’s why the Africa Enterprise Challenge Fund (AECF), launched last year, and with the search for its Fund Managers about to get under way, is so important.

The Fund will offer grants, matched by private sector contributions, to innovative business ideas which encourage greater participation of poor people in markets – as consumers, workers or entrepreneurs.

The Fund is backed by an array of donor agencies, including the African Development Bank, the Consultative Group for Assist the Poor, the International Fund for Agricultural Development, the Dutch Ministry of Foreign Affairs and the UK's Department for International Development.

Interestingly, the Fund will be hosted by the Alliance for a Green Revolution in Africa (AGRA) (which former UN Secretary General, Kofi Annan, chairs), hinting at one of the Funds likely and welcome areas of focus: agriculture - the sector on which most poor people depend for their livelihoods. Finance is the other initial focus, reflecting the difficulty small entrepreneurs often report having in accessing credit and other financial services.

As Business Action for Africa – the network of businesses, business organisation and development partners – this is just the sort of innovative partnership we have been calling for, and we stand ready to engage with the successful Fund Manager to make the AECF the success it needs to be.

G8 Summit: a total farce?

For Oxfam it was a failure to deliver, and for Bob Geldof “a total farce”. But was last week’s G8 outcome for Africa really that bad? For sure, little of the money announced for Africa was new, and the restated resolve by G8 leaders to meet their 2005 commitments comes against a backdrop of painfully slow progress on delivery.

But the NGO reaction – by focusing on money - misses one of the most significant achievements of this G8. That is, to a far greater extent than previous G8 Summits, the world leaders have recognised that – as in every economy – it is growth and private enterprise that offers the best long-term opportunity for making poverty history.

The most striking finding of a World Bank survey of 60,000 poor people was that the vast majority see self-employment, starting a business or getting a job as offering the best prospects for escaping poverty. African’s, themselves, are sick of hearing their continent being talked about in the language of charity, poverty and despair, urging instead for the focus to be shifted towards creating the conditions for enterprise, trade and employment.

The business community made this point clearly in advance of the Summit (in a letter to Chancellor Merkel, at the Africa Business Forum 2007 and in the publication “A Path to a Prosperous Africa”). It is therefore refreshing, though clearly less headline-grabbing, that the G8 framed its discussion on Africa within the topic of “Growth and Responsibility”.

The emphasis, though lacking many detailed commitments, was on the elements needed to stimulate growth, enterprise and investment: good governance, with a clear statement that the Africa Peer Review Mechanism “can serve as an effective tool only if its results are recognized and implemented” (a swipe at South Africa’s recent rejection of APRM’s recommendations?); support for the Extractive Industries Transparency Initiative (EITI) and an extension of its transparency principles to other sectors “where appropriate”; a reaffirmation of support for the Infrastructure Consortium for Africa; support for African countries’ efforts to improve the business climate, including through initiatives such as the Investment Climate Facility; and activities to strengthen financial markets and enhance the effectiveness of remittances. Special mention is also made of agriculture, with the G8 urged to increase support for the Comprehensive Africa Agriculture Development Programme (CAADP). Interestingly, the statement also mentions that the G8 Presidency is “planning a business leaders' campaign, including an investment conference aimed at improving Africa's image as a ‘continent of opportunity’”.

The big outstanding issue is trade, and on this the G8 made some positive noises about their commitment to pushing for a deal by the end of the year, alongside a boost for Africa’s capacity to trade – which was as much as could be expected at this forum. But of course unless this is followed through, no amount of aid will be enough to offset the damage that a collapse in trade talks would cause.

Clearly, accelerating delivery on their Gleneagles aid promises is critical. But recognising that these aid commitments are only part of the story is as important – and it is one clear success that the G8 has recognised this fact.

Africa Day: looking to tomorrow

London has been having a week-long party to celebrate Africa Day (25 May). In many respects, there is real cause for celebration. Much has been achieved by African governments and the international community. As a group of businesses with a deep understanding of the content, we in Business Action for Africa are optimistic about the prospects for many countries in Africa.

The latest edition of the Africa Economic Outlook, launched last week, paints a rosy economic picture: Africa grew by 5.5 per cent in 2006 – well above the long-term trend and for the fourth consecutive year, and this year it is expected to reach a healthy 5.9 per cent. To at least some extent, this reflects improved governance, investment climates and economic policies in many countries.

At a presentation at a Chatham House / CAPPS event last Friday, a senior representative of the NEPAD African Peer Review Mechanism (APRM), pointed to the leadership that has been shown by African Government’s to enhance governance. To date, twenty-six countries have signed up to the APRM and the country review process is underway in twelve. Ghana, Rwanda and Kenya have completed their reviews and have agreed to recommended plans of action.

And a third reason to be positive was set out in the most recent Doing Business Report of the World Bank. Africa is now one of the fastest reforming regions in the world, with two-thirds of African countries making at least one noteworthy reform in 2006 – helping create a better environment for businesses, small and large, to thrive and hence lay the basis for long-term growth and poverty reduction.

Fourthly, at a time when one of the engines of economic growth is high commodity prices, there is seemingly increasing uptake of the Extractive Industries Transparency Initiative (EITI) on the part of many mineral-dependant African economies. It may be that the embezzlement and misuse of revenues which characterised past commodity booms in some African countries, will not be repeated – or at least not to the same extent.

But amidst the celebrations, it is important to take a sober look at what more needs to be done. Although it has improved, growth is still some way short of the annual 7 per cent needed to meet the Millennium Development Goals. It remains to be seen what the follow-through will be from the APRM process; and how many of the countries who claim to be implementing EITI pass muster when the validation process is activated later this year. Moreover, while it is certainly getting easier to do business, Africa as a whole remains the region with the highest regulatory obstacles for would-be entrepreneurs and corruption remains widespread.

As for the international community, G8 Governments meeting shortly in Heiligendamm (June 6-8) must get back on track to deliver on past aid commitments and they must do more to stimulate growth and investment. Above all, the world’s governments – particularly the in the EU and the US – must reach a deal on the Doha international trade negotiations. Failure – driven by pressure from a narrow set of vested interests – would be a real blow for African countries and their people and for the world economy. Business should be active in pushing our political leaders to make the small compromises that now are needed to achieve a deal.