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Markets for the Digital Generation

Over the weekend, I did a more thorough than usual scan of the hundreds of feeds I now follow on my (somewhat bloated) netvibes page. One of my tabs is dedicated to newsfeeds and blogs on Africa, many of which I discovered as a result of my exhilarating trip to TED Global in Arusha, Tanzania last June. One of the blogs I followed was Benin Mwangi, now at The Cheetah Index, a fantastic resource for anyone interested in the emerging entrepreneurial ecosystem in Africa:

As part of our mission to fill the void left by conventional media in covering African issues, African Path will take an active role in supporting and empowering the continent’s young and progressive decision makers. Today, African Path announces the launch of a dedicated business section under the African Path network which will be branded as the Cheetah Index. Currently the site will run on a Beta version.

The Cheetah Index derives both its name and inspiration from Ghanaian economist Dr. George B.N. Ayittey, author of Africa Unchained. A central topic in this book is the new generation of young African professionals who look at Africa ’s problems from a different and revolutionary perspective. Dr. Ayittey believes that this group of professionals plays a central role in re-vitalizing African economies. This group of progressive, problem solving and action-oriented Africans are called the “Cheetah Generation”.

African Path will build the Cheetah Index into a leading online resource for Africa ’s current generation of decision makers. These will include managers, entrepreneurs, government officials, educationists and other people who influence Africa ’s development. The site will provide breaking business news, profiles on African entrepreneurs and industry news while making it easier for business people from Africa and other continents to connect and network.

Which brings me to what got me excited… In a recent post - “Seeing the Gold in African Agriculture”, Benin points to an amazing essay by G. Pascal Zachary - “The Coming Revolution in Africa” and concludes that there is a great opportunity to help develop appropriate infrastructure to support this agricultural revolution (and that he sees the impetus coming from the private sector):

It sort of reminds me of how cottage industries sprung up around Europe from the 1500’s until the 1800’s. The only thing that I would like to add is that the demands of these farmers will likely slowly begin to spur greater demand for infrastructure. I am predicting that the supply of farm-friendly infrastructure will be fulfilled almost entirely through private sources. This might overtime become a very rewarding business line for the enterprising business person…

Zachary’s essay tells the stories of successful, self-made African farmer/entrepreneurs. Here are three excerpts but I strongly encourage you to read the whole article:

After decades of mistreatment, abuse, and exploitation, African ­farmers—­still overwhelmingly smallholders working family-tilled plots of land—­are awakening from a long slumber. Because farmers are the majority (about 60 percent) of all sub-Saharan Africans, farming holds the key to reducing poverty and helping to spread prosperity. Over the longer term, prosperous African farmers could become the backbone of a social and political transformation. They are the sort of canny and independent tillers of the land Thomas Jefferson envisioned as the foundation for American democracy. In a region where elites often seem more committed to enjoying the trappings of success abroad than creating success at home, farmers have a real stake in improving their ­turf. Life will still be hard for them, but in the years ahead they can be expected to demand better government policies and more effective services. As their incomes and aspirations rise, they could someday even form their own political parties, in much the way that farmers in the American Midwest and Western Europe did in the past. At a minimum, African governments seem likely to increasingly promote trade and development policies that advance rural interests.

(Sakwa left life in the city in his 30s to return and farm his family’s rural land:)

In his second year in Bukhulu, he tilled two acres of land, hiring a tractor to assist in plowing. From an American aid project, he and some neighbors learned to plant crops in straight lines. By the third year Sakwa mastered basic farming, “doing much, much better.” When his old Kampala friends visit him, they ask, “How is this poor village man getting all this money?”

Accumulation is only part of Sakwa’s story. How he spends his profits is significant. One early purchase was a mobile phone, which allows him to keep abreast of local markets and negotiate better prices for his crops. That a farmer who lives without electricity or running water should be able to receive phone calls from anywhere in the world is perhaps the most radical change in African material life in decades. Though wireless service came late to the region, nearly one in five ­sub-­Saharan Africans now owns a cell phone, and the World Bank estimates that the region’s wireless phone market is the “fastest-growing in the world.” One morning, after he plants cottonseeds in a small field, Sakwa receives a call from the headmaster at his daughter’s boarding school (yes, he can afford that too!). The headmaster asks for 500 pounds of beans. Sakwa, who has the beans bagged for sale, wants 15 cents a pound. “Will you accept?” he ­asks.

The headmaster wants to pay less. Sakwa refuses. “I can hold my beans until I get a fair price,” he ­says. A few days later, the headmaster calls back and agrees to the ­price.

(On the failure of ‘official’ agro-policy over the last several decades:)

Disdainful of the market, these agricultural specialists preferred to obsess over arcane questions about soil quality, seed varieties, and some mythical ideal of crop diversity. In classic ­butt-­covering mode, they blamed “market failures” and Africa’s geography for farmer’s low incomes and their vulnerability to famine and food ­shortages.

Then, about five years ago, a few brave specialists suddenly realized that under their very noses some of Africa’s most significant farm sectors were booming—and booming without any help from the legions of agricultural scientists and bureaucrats in Africa. In West Africa, corn production doubled between 1980 and 2000. Harvests of the lowly ­cassava—­a starchy root that provides food insurance for many ­people—­steadily expanded. In East Africa, sales of fresh flowers soared. ­Once-­moribund cash crops, such as cotton, saw a large expansion, first in West Africa and then in Tanzania, Uganda, and Zambia. The list of improbable winners went on and ­on.

Even as a steady diet of stories about “urgent” food crises in Africa dominated public discussion, these successes became impossible to ignore. In 2004, the International Food and Policy Research Institute (IFPRI) published a series of papers titled “Successes in African Agriculture.” The papers both reflected and provoked a revolution in thinking about African farming. They also ended a long conspiracy of silence among aid agencies and professional Africanists. For decades the “food mafia,” led by the World Food Program and the UN’s Food and Agriculture Organization, had refused to acknowledge any good news about African farming out of fear that evidence of bright spots would reduce the flow of charitable donations to the UN’s massive “famine” bureaucracy, designed to feed the ­hungry.

The IFPRI report shattered the convenient consensus among experts, donors, and African governments that farmers south of the Sahara were doomed, perpetual victims who could never feed themselves and hence must permanently proffer the begging bowl. Now, because of IFPRI (itself a junior member of the “mafia”), some African agricultural successes could not be denied. That raised a logical question: If some African farmers can succeed, why can’t even ­more?

Thinking about what made me so excited reading his article, I figure it boils down to a couple of key ideas:

• It illustrates the potential power of the individual when provided with (even the bare minimum of) property rights and access to information (markets) and most importantly, the freedom to succeed. That these basic ingredients are not a given everywhere in the world, and especially in many poor developing countries is a crime against humanity.
• On a more personal note, as a 3rd generation descendant of immigrant Canadian homesteaders*, I feel the opportunities I’ve had in my life leveraged upon the potential for hard working, freedom seeking people to build an enduring economic foundation on the fruits of the land.

I know that the circumstances of Saskatchewan 100 years ago, and sub-Saharan Africa today are extremely different. And I am not so naive as to think that land reform, establishing robust property rights and markets is anything but highly complex and fraught with potential pitfalls. That said, I suspect their is much to be said for simply trying to get governments and others (including NGO’s and foreign governments) ‘out of the way’ and let the farmer/entrepreneurs get on with slowly yes but surely building a better future. I hope Benin is right (that private capital will play a preponderant role,) and I believe that the tools, business models and technologies of the sixth paradigm will play a positive and important role in empowering the rise of the African agricultural entrepreneur over the next 2 or 3 decades.

*The Homestead Act permitted settlers to acquire ¼ mi² of land to homestead and offered an additional quarter upon establishing a homestead. Immigration peaked in 1910 and in spite of the initial difficulties of frontier life, distance from towns, sod homes, and backbreaking labour, a prosperous agrarian society was established. (Source: Wikipedia)

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