Sunday, April 15, 2012

Is ICT4D going to change Africa? or is it ICT4B

From Wikipedia: "Information and communication technologies for development (ICT4D) is a general term referring to the application of Information and Communication Technologies (ICTs) within the fields of socioeconomic development, international development and human rights."

ICT4D seems to be the new model for many organizations involved with disadvantaged populations anywhere in the world. Recently 170 delegates from 35 countries met in Kigali-Rwanda for the ICT4D conference organized by the Catholic Relief Services (CRS). Until now it was uncommon to see a humanitarian NGO like CRS organizing a technology conference. I must recognize that it was a very well organized conference and that I saw many interesting ICT4D projects presented. It is clear that ICT can improve the efficiency and effectiveness of humanitarian agencies.

In general there is no question that access to ICT can significantly impact development, particularly in regions where there was no effective communication before. When mobile technology appeared in developed countries, it was a "nice to have", just another communication tool after post-mail, telegraph, fax, land-line phones, email, etc. and its impact was mostly marginal. It provided more flexibility in communication. For those regions the real value came more from smart phones providing mobile access to Internet.

For developing countries, and in particular for Africa, mobile phone penetration has a much more significant impact. The lack of effective communications infrastructure has traditionally been one of the biggest obstacles to economic growth in Africa. Mobile technology is now finally providing access to communication where there was NO communication before, in rural areas in particular.  This is one of the reasons why the speed of mobile technology penetration in Africa has been one of the fastest technology market penetration ever soaring from 2% at the turn of the century to more than 50% today.

The question is: will we see a major impact from it? By major impact I mean will ICT4D have an impact that will finally move the African economy out of poverty to prosperous communities.

The answer is not obvious. My concern, expressed in preceding blog postings, is that over the past forty years Western aid has not been correlated with a significant improvement in the African people’s standard of living and it is not evident that by leveraging ICT4D Western philanthropy will dramatically change that verdict.

The answer may be somewhere else. Africa is a continent of small and medium enterprises (SMEs), only 20 African companies have revenues of at least $3 billion. SMEs are the heart of Africa's economy, they generate 74% of the employment. Until now in Africa SMEs had little or no access to ICT for reasons I explained in another blog post. As a result, their productivity is way below market average when compared with SMEs using ICT for the management of their business.

This is probably where ICT can produce the major impact I spoke about. Studies have showed that access to ICT can increase SMEs productivity in developing countries by a significant factor, sometimes  10 or more. If we can provide easy, affordable access to ICT solutions for the millions of SMEs in Africa, this may have a major economic impact on the continent.

First of all, Africa needs good business managers. While this should be addressed through education, ICT can provide access to business management best practices embedded in business management software. In addition the C of ICT can broaden the SME market for a very low cost. Internet access is becoming more affordable in Africa through a significant increase in broadband Internet cables installations. It can reduce the cost for SMEs to do business with their customers, suppliers, partners.

But the model of use of ICT in SMEs in Africa will be different than in developed countries. They will access the applications and information needed to manage their business as cloud services from mobile devices through Internet. I can already hear many of you saying that Africa is not ready for it, that the infrastructure is not in place. Instead of arguing, I'd rather like to look at the glass half full through a real example.

Usahibu is a Kenya based company delivering accounting solutions for SMEs as a Software as a Service (SaaS). Here are the reasons why I want to highlight that solution:
1) It is based on the mobile-Internet-cloud model that I described. The fact that there are no serious cloud service provider in Africa yet was not a hurdle. The solution is running from servers based in London, UK.
2) It is priced at an affordable 1000KES (12 USD) per month. No need for large upfront investments, neither in hardware or software, neither in IT skills to manage the system. They offer a free training seminar. What SME in Africa cannot afford that price? Subscription takes less than 5 minutes and you can start using it.
3) It was developed in Africa for Africans, which I always said is the only way to develop appropriate solutions for Africa. They will not be developed in Silicon Valley. It was developed specifically for the legislation and workflows present in Kenya. And all payments are done though Mpesa, the local mobile money, not credit cards!

This is not a lonely example, here are some more: African Liberty Card and Esoko in Ghana (running from servers in London, UK),  D-Tree International in Tanzania.

One problem in Africa is the informal private sector representing 40% of the GDP. For those SMEs we must ensure that the benefits of ICT exceeds the benefit" of staying in the informal market, meaning mainly that they don't pay taxes. Governments are trying to force those SMEs to register with variable success. Maybe instead of forcing them to register with no obvious benefits for them, government could offer them SaaS solutions in exchange for their registration. Why not offering them an accounting SaaS that can automatically do their tax return, saving them the need for an accountant? Just my $0.02... In addition, in doing so, the government can get a "real time" view of the business in their country providing them with valuable information. This will require some privacy protection for SMEs and using the data in aggregation only.

If more affordable SaaS solutions for African SMEs can be developed (this in itself is a major business opportunity for software vendors), they could become competitive, see a significant increase in their revenues, generating more employment and leading to the growth of an African middle class. This in turn will provide governments with the tax base needed for their development. This is the best way for them to free themselves from international assistance and being able to take control of their development.

So maybe in addition to ICT4D, we should bet on ICT4B, i.e. ICT for Business.

Seeya later alligator...

Saturday, April 14, 2012

In memoriam...

This month of April 2012 is the 18th anniversary of the horrible genocide that took place in Rwanda.  The world and the UN in particular ended up deliberately turning their back against the genocide that was occurring in Rwanda where 800,000 to 1,000,000 were slaughtered in 100 days. It was the fastest paced genocide ever.

This annual commemoration of the 1994 genocide is important in fostering unity and reconciliation among Rwandans. Across the country memorial events are taking place starting with a major commemoration that the national football stadium, but also many smaller events are organized across the country from district to neighborhood level during one week. Messages which are disseminated during those commemorations help to restore hope for a better future which was the theme for this year events: "Learning from history to shape a bright future."

Many expatriates are leaving the country during that period and some advised me to do the same, because during that week activities are reduced and in particular "fun" activities like sports or entertainment in respect for the memorial.

I decided not to follow their advice and to stay in Kigali. I did not attend the major event in the stadium mainly because it being in Kinyarwanda, the local language which I don't understand. Instead I attended the event organized in my neighborhood (they call a neighborhood a village here). I always try to attend the meetings in my village and there is always someone helping translating what is said. This was the case again as someone sitting next to me translated all that was said in French for me during the three hours meeting.

It was a very simple meeting organized the African traditional way where everyone (about 50 of us) sat around a fire to discuss and listen. The ceremony started with the village chief explaining the objectives of the meeting and the theme of this year anniversary. Then a man explained the definition of a genocide and took us through a short historical review of the events that lead to the Rwandan genocide.
A woman survivor who lived in our village in 1994 shared her terrifying history with us relating it to places nearby that all of us could relate to. She was very animated and made us live through the fear she lived through for weeks, especially that she was eight months pregnant at that time. She told us how she was able to save her baby girl (now 18years old) from the massacre. She was helped by people that didn't even know her.
Then a group of 5 young people with two guitars chanted songs of sorrow and hope. Their soft voices covering the sound of the fire in the African night were very emotional.
Finally another woman spoke about the impact of the events on children, in particular the orphans who saw their entire family slaughtered in front of them. For months they would not speak, unable to express their feelings, thinking they were dead and living in another world. Many of them have been helped by NGOs. Often allowing them to draw their feelings has been helping them opening up.

It was a very emotional meeting for me. I was the only "white" person attending and many came to me at the end thanking me for attending and sharing these moments with them. In attendance were the mother of the president and the minister of health both living in my village and attending as simple citizens.

After the holocaust, the world said "never again" and yet it seems incomprehensible how this could happen again. And even now, the world is not helping much Rwanda bringing 65 genocidaires hiding mainly in Europe and identified by the government to justice. While Europe deployed many efforts to bring the people responsible of the Srebrenica killing of 8,000 Bosniaks during the Bosnian War to the International Court of Justice, they seem less interested in pursing the Rwandan genocidaires. It seems that once again we are turning our backs and that African lives do not have have the same value...

Saturday, April 7, 2012

The need to send appropriate messages to African entrepreneurs

I was recently attending a Forum on Science, Technology and Innovation (STI) in Nairobi where I presented "The Link between Building Higher Education Institutions (HEI) and the Labor Market".
This was a good conference organized by the African Development Bank and UNESCO to discuss policies to promote STI in Africa and come up with practical recommendations to be presented to attending ministers.

One speaker was a Professor of Entrepreneurship from a US School of Business. She was a very excited (and maybe exciting for some) speaker, jumping all over the stage during her presentation, a presentation style often appreciated in the US but maybe not so much in Africa.
She presented some "facts" that I have seen before that many CEOs of successful companies are university drop-offs, the two more famous ones being Bill Gates and Steve Jobs. And thus she was offering the proposal that there are other venues to become a successful entrepreneur than the traditional higher education path.

I think that this is sending the wrong message and even more so to an African audience and I wish that my fellow citizens coming to Africa be more sensitive and adapt their message to their audience. This is the minimum respect you need to show when invited in another culture.

First about the fact itself,  it has been shown that university graduates get better jobs and as a result earn substantially more than people who did not completed higher education. That is the real statistic, and successful drop-offs do not represent the majority. Earning more is only a side benefit (but an important one in Africa) from university studies. Probably more important in good universities is the intellectual development and the broader vision acquired not only in the particular subject of the studies, but about the world in general through interaction with professors and colleague students from all over the world. It opens the mind's horizon and expand the limits of what you think is possible. In summary it prepares you becoming an entrepreneur.

Second, the famous drop-offs are not really drop-offs in the sense of people giving up on their studies. They dropped off because they were brilliant minds who felt slowed down by studies and had a passion and vision. Only a minority of drop-offs fall in that category. The others end up failing in their professional life.

Third, many of those drop-offs where sons and daughters of families where money was not a problem (Gates father was a wealthy attorney and his mother was a bank director) so that their family was able to support them. Obviously this is not the case for the majority of African students. In fact many times, their families has to go into debt to support their studies. Those studies are often the only hope for the family. Family in Africa has a different meaning than in the developed world.The social structure of African families is much broader, covering not only the direct family, but all the members of the large family including uncles and aunts, cousins, grand parents, etc. A typical family can exceed one hundred members who all depend and rely on each other. Often, the university graduate of the family who earns a better salary is providing support to the extended family. He or she will intervene in case of problem, e.g. if a member of the family is sick and needs hospitalization.

I'm sure that the professor's objective was to encourage people to pursue all paths to success and that she successfully teaches those paths. My only recommendation is to be more sensitive to the audience and I must recognize that her short speaking time made it difficult to be more appropriate but that is not a reason not to try.

Seeya later alligator...