Many Positive Trends for Africa in 2010

While 2009 saw the global economic crisis spread around the world, the story is more complex and more hopeful than many believe. For Africa, various trends are pointing to positive economic development in 2010, despite the continent’s numerous political, social and environmental challenges. Pragmatism is driving stronger economic ties between Africa and the rest of the world, while long-running trends are delivering opportunity to millions despite setbacks.

The Standard Chartered bank (http://research.standardchartered.com/Pages/home.aspx) believes sub-Saharan Africa will jolt itself out from the 1 percent growth it had in 2009, to reach 4.7 percent growth in 2010 and 5.7 percent in 2011 (http://research.standardchartered.com/researchdocuments/Pages/ResearchArticle.aspx?&R=66952). The reason? The world’s strong appetite for commodities and food, which will continue to draw in business. And much of this business will be done by that powerhouse of the global South, China.

The fact that China is trading better infrastructure – roads, rail and ports – for commodities means other businesses can also benefit from the improving environment. Throughout the downturn in 2009, China actually increased its investments in Africa.

The United States is also trying to increase its economic relationship with Africa. It wants a third of its oil imports to come from West Africa by 2015.

And the competition for food in the world, as countries address the global food crisis, has seen companies from the Middle East to Asia to Britain purchasing land in Africa to grow more food.

The Annansi Chronicles blog on African business and culture trends (www.annansi.com) has come up with a list of the big trends to watch out for on the continent in 2010. They build upon many of the patterns that have emerged in the past few years in Africa.

The blog predicts that Africa will increasingly be an innovation incubator. Concepts like the bottom of the pyramid – where the poor are seen as an unserved marketplace of needs – will draw more private companies in to innovate new products and services. Already, products and services trialled in Africa are then launched in other places in the world. One example has been mobile phone banking. The blog sees the challenge for Africa as finding ways to increase innovation and harness its economic benefits within the continent, and to direct resources to the African pioneers out there who need money and infrastructure support to grow their ideas.

Mobile phones will continue to be the source of opportunity in Africa in 2010. Get ready for more businesses to take advantage of the move from analog to digital in Africa, as fibre optic cables continue to expand. Just as the introduction of broadband internet in developed countries gave birth to new businesses like You Tube (www.youtube.com), so it will create new opportunities in Africa. The key to growing the prosperity from this is to see governments and the private sector better connect with African technology pioneers, as can be found in hot spot countries like Ghana.

Along with technology comes content. And the people to make the content interesting and attractive will be Africa’s so-called ‘creative class’: savvy young African entrepreneurs and thinkers. They have drawn on the rising urbanization of the continent and greater international travel to explore new ways of representing African culture. This has come forward in the explosion in media, fashion, music and design. The blog believes the 2010 FIFA World Cup in South Africa (http://www.fifa.com/worldcup) is going to thrust the world’s attention on to Africa’s creative class: a global media burst that will be an opportunity not to be missed.

And this will also challenge global perceptions of “brand Africa.” Already, the world’s tourists flow to Africa in greater numbers, defying decades of negative media publicity. Brand Africa will be up for grabs in 2010.

And finally, while China has been the big story in terms of economic investment in Africa, India will start to make more moves to catch up by flexing its information technology muscles. Look for more joint partnerships between African countries and Indian technology companies.

In short, Africa has as many positive trends for 2010 as negative ones. It is just a matter of focusing on the good so the negative will not have a fighting chance in 2010.

By David South, Development Challenges, South-South Solutions

Published: January 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Kenyan Mobile Phone Innovations

 

A couple of enterprising Kenyan engineering students are showing how mobile phones are an inventor’s dream. Their two inventions – one a way to re-charge phones while bicycling, the other an aid for catching fish – show the potential for adapting this technology to the needs of the poor.

The rapid spread of mobile phones across the South is giving rise to a flurry of invention and experimentation. While many of the new mobile phone-users do not have much money, they are often driven by poverty to invent solutions – and in so doing prove the phones offer many ways to generate income.

According to the International Telecommunications Union (ITU), Africa is the world’s fastest-growing mobile phone market, and the number of subscribers surpassed 300 million in 2008. The number of mobile phone users in the world passed 4 billion in 2008, and the fastest growth was in the South (ITU). The trend towards increasing development of inexpensive handsets means more phones will be reaching even more poor people in the future.

Kenya has seen blistering growth in mobile phone ownership: from just 200,000 users in 2000, there are now more than 17.5 million people with mobile phones out of a population of 38.5 million

As powerful as mobile phones are, they need electricity to keep working. The struggle to find a steady supply of electricity vexes many in the South, so finding cheap or free ways to recharge the phones represents a huge market opportunity.

While mobile phone recharging has become a business in its own right across the South, it is costly as well as time-consuming. Some people spend hours just getting to recharging stations.

To tackle this chronic problem, Engineering students Pascal Katana and Jeremiah Murimi of the Department of Electrical and Information Engineering at the University of Nairobi, Kenya (http://uonbi.ac.ke/departments/index.php?dept_code=HE&fac_code=32) have invented a device called the “smart charger.” It is powered by the dynamo that is standard issue with most bicycles sold in Kenya. Dynamos on the bicycle’s back wheel are little electricity generators that use pedal power to illuminate the bike’s lights.

It takes an hour to charge the mobile phone by peddling the bicycle: around the same time it takes to charge a phone using an electricity plug. A one-time charge for somebody can cost up to US $2 at a recharging service. But the smart charger sells for 350 Kenyan shillings (US $4.50) – around the cost of two charges.

“We both come from villages and we know the problems,” Murimi told the BBC.

“The device is so small you can put it in your pocket with your phone while you are on your bike.”

The smart charger has been assembled from bits and pieces the duo found: “We took most of (the) items from a junk yard,” Katana said. “Using bits from spoilt radios and spoilt televisions.”

To test the experimental device, workers at the university campus were recruited to have a go.

“I use a bicycle especially when I’m at home in the rural areas, where we travel a lot,” said campus security guard David Nyangoro. “It’s very expensive nowadays charging a phone. With the new charger I hope it will be more economical, as once you have bought it, things will be easier for you and no more expenses.”

Kenya’s National Council for Science and Technology (http://www.ncst.go.ke/) has now backed the project and the students are exploring ways to mass-produce the smart charger.

Another invention by Katana has adapted a mobile phone to improve fishermen’s success, according to Afrigadget (www.afrigadget.com). It amplifies the sounds made by fish as they feed. As the sound is broadcast outwards from the feeding, other fish are attracted to the same place, believing there is more food. A GPRS/GSM (http://en.wikipedia.org/wiki/General_Packet_Radio_Service) mechanism in the fishing net is triggered when there is enough fish in the net, and an SMS text message is sent to the fisherman letting him know it is time to haul in the net.

It looks like Pascal Katana can re-charge your phone and fill your plate!

By David South, Development Challenges, South-South Solutions

Published: September 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Crowdsourcing Mobile Phones to Make the Poor Money

 

The proliferation of mobile phones across the global South, reaching even the poorest places on the planet, has given birth to whole new ways of making money. A phenomenon called ‘crowdsourcing’ – in which the power of individuals is harvested to achieve a goal – is now being used to create networks of people earning extra income.

One technology called Txteagle (http://txteagle.com/index.html), works like this: somebody performs small tasks with their mobile phone, such as translating a document into a local language, and in return receives credits or cash, so-called ‘micro-payments.’ By having many people perform these tasks in their spare time or down time at work, a large project can be completed and people can top-up their income. The secret is that the task must be able to be broken up into bite size chunks: the elephant must be eaten with a small fork.

For the poor, or people who are just getting by in a poor country, this can be a much-needed survival top-up in hard economic times. It is also an opportunity for people normally frozen out of formal employment opportunities or living in slum conditions.

Txteagle is being pioneered in Kenya using text messages or a low bandwidth, interactive protocol known as USSD (http://en.wikipedia.org/wiki/USSD) (usually used to check prepaid phone balances).

The rapid growth in take-up has made mobile phones the big success story of the 21st century. With such reach, finding new applications for mobile phones that are relevant to the world’s poor and to developing countries is a huge growth area. It is estimated that by 2015, the global mobile phone content market could be worth over US $1 trillion: relegating basic voice phone calls to just 10 percent of the way people use mobile phones.

The technological success story of mobile phones is impressive: China is home to the same number of mobile-phone users (surpassing 650 million in 2009) as the whole of Europe. According to India’s telecoms regulator (http://www.trai.gov.in/Default.asp), half of all urban dwellers now have mobile – or fixed – telephone subscriptions and the number is growing by eight million a month. In Tanzania, mobile phone use grew by 1,600 percent between 2002 and 2008.

Txteagle is the brainchild of Nathan Eagle of EPROM (Entrepreneurial Programming and Research on Mobiles) (http://eprom.mit.edu/ ). He works on developing new mobile phone applications with computer science departments in 10 Sub-Saharan African countries including: the University of Nairobi (http://www.uonbi.ac.ke/) (Kenya), Makerere University (http://mak.ac.ug/makerere/) (Uganda), GSTIT (http://www.gstit.edu.et/) (Ethiopia), Ashesi University (http://www.ashesi.org/) (Ghana), and the Kigali Institute of Science and Technology (http://www.kist.ac.rw/) (Rwanda).

Eagle has pioneered Txteagle in Nairobi, Kenya with students at the University of Nairobi. Drawing on his experience in East Africa, where he has lived since 2006, Eagle has a powerful message about mobile phones in the South. “This is their technology. The mobile phone is theirs,” he told a conference in March of this year. “It has had a far greater impact on their lives than it has on ours.”

Eagle says typical Txteagle users are “literate people in Nairobi who have significant idle time, like taxi drivers, security guards” or high school students. Like many Southern countries, Kenya has a plethora of languages: 62 in all. It can be laborious and costly to translate into all these languages. But by using crowd-sourcing on mobile phones, mobile phone company Nokia’s (www.nokia.com) phone menus have been translated into 15 local languages.

Already there are more people wanting to earn money this way than there are tasks to do. Eagle has had to cap payments at US $1.50 a day. The service needs to grow, and it is looking to offer people in the United States the opportunity to have easily broken-up tasks done in Kenya. Eagle believes his algorithms (http://en.wikipedia.org/wiki/Algorithm) ensure a 95-percent accuracy rate. One possible market is the US $15 billion medical transcription industry.

Kenya, a nation of 32 million, relies on its small business sector for most employment. In 2005, the government’s Economic Survey (www.cbs.go.ke/) found the small business sector created 437,900 jobs – mostly because of the boom in mobile phones. According to the Massachusetts Institute of Technology (MIT), adding an additional 10 mobile phones per 100 people boosts a typical developing country’s GDP growth by 0.6 percent. The boost comes from the innovative use of mobile phone technology by local entrepreneurs.

Kenya is making significant headway on innovating with mobile phones. Already, 30 percent of Kenyans pay for their electricity with their mobile phones instead of waiting in line.

“We have transformed the majority of phones in East Africa into a platform that people can use to make money,” Eagle told the conference. “There are 15 million Africans ready to start working on their mobile phones.”

By David South, Development Challenges, South-South Solutions

Published: July 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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DIY Solution Charges Mobile Phones with Batteries

There are now more than 3.5 billion mobile phones in use around the world. In the past five years, their use and distribution has exploded across the global South, including in once hard-to-reach places in Africa. In fact, Africa is the world’s fastest growing mobile phone market. Over the past five years the continent’s mobile phone usage has increased at an annual rate of 65 percent – twice the rate of Asia.

The world’s poor are creative users of mobile phones, adapting these powerful tools to help with business, saving and spending money, and communicating with the outside world. As powerful as mobile phones are, they need electricity to stay functioning. And it is the struggle to find a steady supply of electricity that vexes many in the South.

There are wind-up mobile phone chargers, solar powered chargers (http://tinyurl.com/bg3wac), and mobile phone chargers you wave about. But most of these devices are, to someone who is poor and living in the South, expensive and hard to find. So what to do when it is not possible to buy a solar powered mobile phone charger?

Necessity is the mother of much invention. And one inventing mother is Mrs. Muyonjo, a housewife in a remote village of Ivukula in Iganga district, Eastern Uganda. She used to ride her bicycle for 20 miles in order to get to the nearest small town with an electricity charger for her mobile phone battery.

If that wasn’t a struggle enough, she was one day deceived by a vendor running a village battery charger.

“I will never give my telephone to the village battery chargers again,” she told the Women of Uganda Network (www.wougnet.org). “I gave them my new phone for charging, and they changed my battery and instead returned to me an old battery whose battery life can only last for one day.”

Ripped off by the vendor and unable to find the money or time to charge the battery daily, she decided to find an alternative charging solution.

“I looked at what was readily available to me and came up with my own charger. I devised this method to enable me to charge my battery every day. It works perfectly.”

A simple solution that shows there is no need to be a prisoner of technology, just its adaptor.

By David South, Development Challenges, South-South Solutions

Published: February 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Mobile Phones: New Market Tools for the Poor

Bangladesh’s poor can now buy and sell goods and services with their mobile phones, thanks to a Bangladeshi company’s pioneering mobile phone marketplace. The company, CellBazaar, serves as a useful role model for other Southern entrepreneurs and companies looking to develop and market mobile phone applications for the poor that really help them.

CellBazaar is simple to use: A user begins the process by texting the word “buy” to short message (SMS) code 3838. They then are offered a list of all the items for sale and scroll through them to find what they want. When they have found something, they send another SMS. In response, an SMS comes back telling the seller’s phone number. And from that point, business is underway between the buyer and the seller.

“It’s a far more efficient way of finding things. In the past you have to go to newspapers, magazines, and find the best match,” founder Kamal Quadir told MobileActive.

The categories run from used cars and motorcycles, to new laptops, agricultural products like corn, chickens and fish, educational tutors, jobs, and places for sale and rent.

Quadir said he had the idea for CellBazaar when he was a graduate student at MIT, the Massachusetts Institute of Technology in the United States.

“I was surrounded by technologically sophisticated people,” he said. “I saw all this technological possibility and heard one top-notch scientist mentioning that a very cheap mobile phone had the same capabilities as a NASA computer in 1968. A country like Bangladesh has 35 million NASA-type computers, and most importantly, they’re in people’s pockets.”

Quadir saw all this power going to waste, and realized how business was being held back by the lack of information. Absence of market intelligence – or what is available for sale and what is a good price – was a big impediment to more profitable and efficient business transactions.

Quadir first created the idea at MIT Media Labs and eventually signed a contract with GrameenPhone. CellBazaar launched in July of 2006, and, after a year of beta testing, the team started to actively market the service in August 2007.

CellBazaar can also be accessed through its website. This has the advantage of making what is a very local market an international market.

Partnering with GrameenPhone, Bangladesh’s leading telecommunications service provider with more than 18 million subscribers, had its advantages. With 60 percent of the Bangladesh market, “their network is larger than others,” Quadir said.

Just as web applications like Google and the powerful social networking website Facebook (www.facebook.com) transformed the way people work and socialize, so CellBazaar has needed to encourage a change in behaviour for it to work. At first, people didn’t think they had anything worth selling, or that they could use the text messages to connect to a marketplace.

“In the past, a rural village person couldn’t even imagine that they wanted to sell something and the whole world would be willing to buy it,” Quadir said. “The biggest challenge we have is people blocking that audacity and courage.”

To date, over 1 million people have used the service out of a country of 150 million people. “Fundamentally the real issue is about changing people’s patterns,” he said. “But once they learn how to use it, people start doing it really frequently.”

The CellBazaar experience also shows how critical clever marketing is to business success. The company has been marketed through tastefully designed stickers placed in the windows of cars, taxis and microbuses — ubiquitous and continuous publicity for low cost.

CellBazaar also has launched educational booklets for four target audiences: villagers and farmers, the elderly and retired, young professionals, and tech-savvy teenagers. There are detailed booklets for those who want step-by-step instructions, as well as short leaflets for customers who want to carry a “quick guide” in their pocket.

CellBazaar launched its first television campaign during the Muslim festival of Eid in 2007. The ads featured a newspaper seller called Shamsu Hawker, and show how he begins a new career buying and selling used televisions with the help of CellBazaar. The advertisement’s unusual setting on a train, as well as positive imagery of Bangladesh, created a sensation among TV viewers. The character “Shamsu Hawker” has become a nationally recognized icon and popular cultural figure.

As the service grows, the demographic that uses it has also expanded. “Young people were the early adopters,” said Quadir. “Initially urban people used it more, because we didn’t market very aggressively. Word of mouth spread faster because of the higher concentration of people in cities. But now it has spread to rural areas as well.”

CellBazaar has won many awards for its innovation in social and economic development.

The ambitious Quadir wants to expand CellBazaar into East Africa, Eastern Europe, and South Asia. Unlike the web, CellBazaar has to make deals with local mobile phone providers. He can’t just offer the service through the internet. “The Internet belongs to everybody — like highways and like fresh air,” said Quadir. “Mobile networks are privately owned.”

“So far the operators we have worked with have been very good,” he said. “We are very selective in terms of what operator we work with.” As CellBazaar looks to expand, Quadir is focusing efforts on places that have high mobile penetration rates and low web penetration. “We’re looking at any place that has less internet. No matter how good the application is, having internet and high computer penetration doesn’t help us,” he said. “And mobile is everywhere.”

The same lesson is being learned around the world. A study of grain traders in Niger found that “cell phones reduce grain price dispersion across markets by a minimum of 6.4 percent and reduce intra-annual price variation by 10 percent.” According to the study, “The primary mechanism by which cell phones affect market-level outcomes appears to be a reduction in search costs, as grain traders operating in markets with cell phone coverage search over a greater number of markets and sell in more markets.”

Mobile phones are now the fastest growing consumer product in history. Portio Research estimates that between 2007 and 2012 the number of mobile subscribers will grow by another 1.8 billion, mostly in emerging economies like India and China.

Informa Telecoms and Media estimates mobile networks now cover 90 per cent of the world’s population – 40 per cent of whom are covered but not connected. With such reach, finding new applications for mobile phones that are relevant to the world’s poor and to developing countries is a huge growth area. It is estimated that by 2015, the global mobile phone content market could be worth over US $1 trillion, and basic voice phone calls will account for just 10 per cent of how people use mobile phones.

Leonard Waverman of the London Business School has estimated that an extra 10 mobile phones per 100 people in a typical developing country, leads to an extra half a percentage point of growth in GDP per person.

The experience in the Philippines has shown that the best way to drive fast take up of mobile phone services is to offer something very practical and connected to personal income.

“The most significant lesson learned so far,” said Shawn Mendes, lead author on the report, The Innovative Use of Mobile Applications in the Philippines: Lessons for Africa, “is that m-Banking, rather than more altruistic applications such as m-Health and m-Education, has delivered the greatest benefits to people in developing countries.”

By David South, Development Challenges, South-South Solutions

Published: October 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsoctober2008issue  

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