Social Media: Our world in Africa

There is no way one can have a conversation that doesn’t touch on the world of social media. Now Africa is experiencing more and cheaper bandwidth, combined with cheaper and increasingly versatile mobile devices have been inextricably linked to a universe of highly-functional and user-friendly platforms.

We have been catapulted into a new, digital dimension. It’s a bit like how Alice felt in “Alice in Wonderland”. However, this is no fairy tale. It’s real! People’s lives are changing – for the better, companies are adapting to this
digital dimension with more enthusiasm than fear and there is a tangible economic stimulus and business impact.

The period since mobile penetration figures became significant has been characterised by innovation and technology-driven value added services that are increasingly specifically tailored to meet the spending and consumption needs of African consumers.
For example, Kenyan-based Safaricom’s M-PESA has, through it’s mobile money transfer product, tapped into the “unbanked” portion of the population by taking advantage of the country’s high mobile penetration levels.

Around half of the world’s 2 billion Internet users have used some form of social media according to latest data. Africa has seen a 2357% growth in internet usage between 2000 and 2010 and Asia represents around 42% of the total internet population worldwide.

For the vast majority of Africans, social and other digital communications media are a daily part of life. One in four African
is a “heavy” social media user, meaning they use at least two different types of social media each and every day.

Many more Africans report a positive impact of social media use on their emotional well-being than a negative one. Most of them don’t think their use of social media affects their social and emotional well-being one way or the other.
But there are some who think that using social media does affect how they feel about themselves and their social situation.

Social media is taking Africa by storm with mobile phone subscriptions, internet and social media usage figures on the climb. Facebook is leading the way with high user numbers and Twitter is catching up with the most significant social networking recorded in the first half of 2011.

Some exciting figures show that there are presently about 120-million internet users and 32-million Facebook users in Africa. This is quite high when compared to only 18% of internet users in Asia are on Facebook.

Are we going there yet?

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Improving Ghana’s Business Climate

International press coverage tends to overemphasize the positives and downplay the real challenges Ghanaian entrepreneurs face. When I moved back home to Ghana from New York in 2004, less than 5 per cent of Ghanaians had bank accounts; banking was a cosy club of 18 actors with little incentive or appetite for the private sector.
This was unsurprising with a Government Treasury Bill rate as high as 42 per cent. Entrepreneurs lucky to be advanced credit could expect business-crippling interest rates—as high as 50 per cent at one point. Add to that an inflation rate of almost 24 per cent and you get a picture of how difficult it was to operate as a small- or medium-sized enterprise (SME) or entrepreneur—especially if you required credit.

Under the circumstances, only certain kinds of entrepreneur could thrive—service-oriented entrepreneurs or entrepreneurs with access to private finance.

The Ghanaian business landscape has changed tremendously since 2004. With a fall in the Treasury Bill rate to 23.02 per cent, the 26 banks have been forced to diversify, growing their balance sheets by other methods including private sector lending, even if at an average rate of 27 per cent.
However, the challenges, though diminished, remain —within them opportunities exist for government, development agencies and private equity firms to really help transform Ghana into a thriving environment for small business and entrepreneurship. I see four key areas that need attention: Access to credit, policy enforcement, infrastructure and the development of human capital.

Access to credit is still the toughest barrier to business operations and growth. Without a proper credit referencing system and adequate information about companies, industries and opportunities, banks find it difficult to make credit evaluations.
As a result banks treat entrepreneurs as an amorphous set and demand the same collateral package regardless of business sector or industry, instead of evaluating each proposal separately. It is near impossible for most SMEs to obtain credit from banks in Ghana without collateral.

As financing from development finance institutions (DFIs), and other commercial international sources, are a key part of financing for Ghanaian banks, given particularly low bank deposit levels as a percentage of GDP, these institutions could perhaps tie credit and debt investments in Ghanaian banks to a requirement to provide minimum levels of support to local entrepreneurs.

In addition, both domestic and international players should support the nascent credit referencing system and invest in systems to generate and disseminate useful data.

There is a gap between policies and laws on paper and what happens in practice. A review of government policies and laws reveal an impressive set of initiatives aimed at promoting private sector development but it is rare to see them in practice.

Linked to this is an unfriendly government machinery. The departments of government which entrepreneurs rely on to establish and operate their enterprises are perceived to be ‘entrepreneur-unfriendly’ and ‘anti-private sector’.
Officers who populate these institutions appear more concerned with unnecessary bureaucracy than facilitating the launching of new businesses. Many officers are also ill-prepared to provide the level of support that entrepreneurs require.

Despite significant investment in infrastructure, a lot more remains to be done to provide better quality roads, water and electricity to support businesses. For example, there are nascent initiatives in contract manufacturing and outsourced customer services,that require greater reliability from basic utility providers.

Given the lack of breadth in private enterprise, many of the best graduates of our universities and polytechnics leave the country to seek experience and opportunity. Also, there is a growing number mid-level of graduates who are not necessarily ‘fit for purpose’.
After access to capital, entrepreneurs cite human capital as the biggest barrier to operations and growth. Many entrepreneurs find the talent pool so poor that they essentially train recruits from scratch.
While all the four areas I have outlined remain challenging for SMEs and entrepreneurs, they have all shown improvement over the years and – in my opinion – offer further opportunities for investors. Prospects exist in skills training, public/private infrastructure such as toll roads, private equity, and lobby organisations.
Without changes, the breadth of entrepreneurial endeavour in Ghana will continue to suffer and some of the most dynamic young graduates will be lost, further slowing development. It is only by tackling these challenges will Ghana be able to give meaning to its stated objective of private sector led growth.

Elikem Kuenyehia is a founding partner in Oxford and Beaumont solicitors in Accra and author of Kuenyehia On Entrepreneurship. At BEIGE Capital, he plays a strategic role in Legal Affairs and International Relations.

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My say on President Obama's Africa visit

Some key issues in the U.S. policy towards Africa includes supporting open and democratic governance and increasing access to quality healthcare and education.  President Obama’s visit to Africa was an important milestone in rebuilding relationships between the West and Africa.

During his visit to Ghana in 2010, he articulated his policy on promoting democracy and building strong institutions in Africa.  Now it remains to be seen how the U.S. will strike a balance between promoting democracy and fighting terrorism, as well as fostering economic development and trade.

Today, Africa’s leading trading partners are China and India.  Turkey, Brazil and South Korea have also significantly increased their trade volumes with Africa in recent times.

China overtook the United States as Africa’s major trading partner in 2009.  As a result, Beijing is seen as a major buyer of Africa’s natural resources and a supplier of capital goods for infrastructure development.  India is investing considerably across Africa as well, especially in the agriculture, pharmaceuticals, hydrocarbon resources, information technology and telecommunications sectors.

The strong presence of China and India calls for rethinking of the U.S. relationship with Africa in terms of investment and trade opportunities.

One of the key issues that needs attention is the extension of the African Growth and Opportunity Act (AGOA), which is set to expire in September 2015.

Through the AGOA initiative, 40 African countries have been able to increase their exports to the U.S.  However, the full potential of the initiative has not been exploited.  Of particular importance is the need to increase the range of products exported to the U.S. under AGOA in order to benefit African producers and manufacturers.

Since regional integration is already taking root in Africa, it is important that the U.S. engages regional economic blocs in trade negotiations to promote trade and commerce.  The U.S. should also see emerging players in Africa as partners so that the interaction between Africa and the rest of the world leads to a win-win relationship.

I believe the United States can support youth employment opportunities by having bilateral discussions on identifying successful poverty reduction programs, making the youths benefit directly and conducting evaluations to assess progress.

Through these programs, youths become empowered, creative, innovative, and gain a political voice - all conditions necessary for building the strong institutions that promote good governance and economic development.

When Obama visited Africa, he saw a lot of young faces. I am sure he may have noticed that the vast majority of those young people are looking for decent work.

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Wireless Technology in Africa

All my life, I have had great hopes that wireless technologies will be one of the critical ways of advancing the continent to a better status.

To me be clear from the outset I am an ardent free marketer and highly in favor of competitive markets. I am also in favor of speed as a catalyst for change and believe that the worst mistake of policy makers is when they favor analysis over action.

Wireless is clearly a “leapfrog” technology. It permits the ability to easily transmit information across wide geographies with the least amount of cost and capital expenditure. It can be built out according to population densities instead of despite them.

Better information removes distance as a barrier to communication and understanding it allows for better planning and resource allocation. It permits for widespread education of the population in both academic and practical matters.

Overall, better information creates a smarter communities, societies and people.
With all this, the question of how do we get wireless technologies to take root in Africa?

What needs to be done at the policy level to permit the growth of wireless technology and the possibilities it brings for African countries to leapfrog years of infrastructure developments...?

Wireless is by its very nature highly personalized service. As such it permits information flow between individuals and therefore represents threat to any government or system that wants to limit such communication.
Without this very first fundamental change, wireless deployment will always be marginal.

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Investing in Nutrition

Africa is in need of critical investment in nutrition. It is said that every year 11% of GDP in Africa is lost to under-nutrition.

There are affordable solutions to build a stronger, healthier population with the skills to drive economic-growth and social-development.

It is essential that we make these investments in nutrition now. Malnutrition, hunger will not and cannot be solved by governments alone.

I support a comprehensive range of interventions to prevent stunting in early childhood.

I Will support programmes in partnership with the private sector, to fortify food-staples such as flour, oil, sugar and salt.

Women like Hawa in Mozambique.

Hawa has already had to bury some of her children because they died of malnutrition. Of those that survived 3 year old Ali is severely stunted, Jamal is seven and just 3 foot 8 and her oldest daughter Habiba has already lost children of her own.

Hawa and her family haven’t been living through a famine. They strive every day to get the nutritious food they need. But it simply hasn’t been possible.

Hawa is not alone.

After all that has been done, there are still 1 billion people under-nutrition. 1 in 4 children are stunted through chronic malnutrition. And 165 million children are so malnourished by the age of 2 that their minds and bodies will never fully develop.

This is a massive issue for humanity, and it’s absolutely right that some investment should be made this regard.

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Doing business on the Internet

Simple information websites with product and contact information, as a first step can open new doors for small African businesses locally and internationally.

I do not particularly like prescribing any solution that will depend on governments. But E-commerce requires vendor credibility.
Through the online mall people in the Diaspora may order local goods for friends or family. These associations can also help to guarantee the quality of products advertised on the site, as well as the credibility of its members to ensure fraudulent people do not seize the opportunity.

Apart from technology, the greatest impediment African businesses face in embracing e-business is fraud.
This is where the governments should play important role. Law-makers should strengthen existing laws to stem out corruption in their countries. People who thrive on advance fee fraud should be put out of business. It is possible!

Anything that works through technology can be stopped through technology. It's simply a digital war amongst programmers (it's like the virus and anti-virus battle among programmers). Moreover, the world wants to see trials, prosecutions and convictions to believe that African countries are serious in their war against corruption.

As for now, cross-continental partnerships will play a major role in helping businesses in Africa cross the e-commerce threshold, as African businesses will still need international partnerships to help complete orders.

Doing business on the Internet will help small businesses in Africa increase their market share in the global marketplace. There should be a concerted effort to make this happen.
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A look at world water day..

The World Water Day is held annually on March 22 to celebrate something that most of us take for granted. Each year, World Water Day highlights a specific aspect of water. It's a day for those of us in developing countries to step back and assess the facts of how much water we actually use in our daily lives.

The UN General Assembly, in its resolution 65/154, decided to proclaim International Year of Water Cooperation: Making it Happen!, a day dedicated to something so basic and simple that most people never give it a second thought: Clean water.

We leave our water footprint in nearly all of our daily human activities from our morning shower to our evening meal.

A massive amount of water goes into the food we eat, far more than most people think. For instance, it takes about 1500 liters of water to produce 1kg of beef and, statistically, it takes a thousand times more water to feed the human population than it does to satisfy its thirst.

Did you know that almost a billion people are forced to spend countless hours scavenging for water each day?

The goal of the day is to focus attention on the importance of freshwater and to advocate for the sustainable management of freshwater resources.

One out of every eight people worldwide lacks safe drinking water, and two out of every five people lack adequate sanitation.

Those who have better access to water tend to have lower levels of undernourishment and the lack of water can be a major cause of famine in areas where people depend on local agriculture for both food and income.

It's undeniable that those living without safe drinking water reside in Sub-Saharan Africa, and the global demand for water is growing. There are currently over seven billion people to feed on the planet and another two billion are expected to join by 2050.

By 2025, the UN expects that 1.8 billion people will be living in countries or regions with absolute water scarcity and two-thirds of the world's population could be living under water-stressed conditions.

The UN suggests several ways we can help, including the need to reduce the roughly 30% of food produced worldwide that is lost or wasted every day. In several developing countries, a large portion of the food is lost between the farmers' fields and the market due to poor storage and transportation facilities.

In more developed countries, and in particular cities, food is wasted by the consumer who is either not aware of or not sensitive to the resources needed to produce it.

Investing in water, sanitation, and hygiene programs is one of the smartest investments in tight economic times because communities with safe drinking water and adequate sanitation see tangible progress in children's health, school attendance, and local economic development.

Not all the news is bad on World Water Day. A report released earlier this month noted that over two billion people gained access to improved drinking water sources between 1999 and 2010.

While the road may be long, each small step is making a difference.

For something so essential to all of life, it is only fitting that once a year the world takes a moment to contemplate this mysterious and essential life-giving compound.

How are you celebrating World Water Day 2013?

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