African techno-euphoria and the origins of Kenyan mobile exceptionalism

I’m struck by one of those periodic waves of Africa techno-euphoria as I catch up on my post holiday reading (Google Reader, twitter, email, random subscriptions – is there no end to it?). The Guardian has pieces on how the web is changing Africa and 15 innovations that are transforming the continent. Meanwhile the Economist has a fascinating piece on mobile technologies in Kenya. Some highlights:

“In 2002 Kenya’s exports of technology-related services were a piffling $16m. By 2010 that had exploded to $360m. To its boosters, Nairobi is “Silicon Savannah”.

However, it differs from its silicon sisters in one crucial regard. From the start, its tech firms have designed their products for mobile phones rather than computers. Kenya is still a poor country; few of its people own laptops. But there are 74 mobile phones for every 100 Kenyans, well above the African average of 65. And nearly 99% of internet subscriptions in Kenya are on mobile phones.

Three factors helped Nairobi to become an African tech hub. The first is a supportive government. In 2005, when Bitange Ndemo was appointed as permanent secretary to the ministry of information and communications technology (ICT), Kenya was a technological backwater. Access to the internet was available only through satellite connections and was wallet-sappingly expensive. In 2009 Mr Ndemo brought the first of four undersea internet cables to the Kenyan coast. Prices plummeted and bandwidth exploded. Just under 12m of the country’s roughly 40m people now use the internet, a number that has trebled since 2009.

Second, Kenya has undergone a revolution since 2007, when M-PESA, a mobile-payments system operated by Safaricom, a phone company, was launched (see chart). Many start-ups use it as a base for their business. One team streamlined the payment of school fees through the service by helping institutions and parents keep track of upcoming and late deposits. Another offered an electronic version of Kenya’s popular informal savings groups. M-PESA has also inspired others. In May Google launched Beba, a pre-paid card for commuters using Nairobi’s local buses. Insiders say that this is a test run for a much larger cashless-payment system.

Third, since 2010 Nairobi has had a place, called the iHub, for local techies to get together and exchange ideas. The iHub has expanded to include a consulting arm, a research department and an incubation space called m:lab, which supports start-ups developing mobile applications.

Will Nairobi then compete with other emerging tech hubs such as Bangalore and Tel Aviv? Not at once, says Joe Mucheru, head of Google in Kenya. Nairobi has exported two notable innovations: M-PESA (which began life in London) and Ushahidi, a non-profit platform for crowdsourcing information during disasters. But most Kenyan tech firms are coming up with solutions to local problems. One team has built a service to help poultry farmers, who waste hours sitting around watching their chickens, keep track of their brood with text-message alerts. “We need to solve the nitty-gritty first and then we can invent new things,” says Mr Mucheru.

Yet this may ultimately be the key to Kenya’s success. “We have so many problems that can also be opportunities,” says Mr Ndemo. M-Farm, a service that gives farmers access to market prices for the cost of a text message and allows them to group together to buy and sell products, has won several supporters and awards. It is the sort of thing Kenya could export to other poor countries.”

Even taken with the necessary pinch of salt (tech fixes are seldom a pain-free substitute for sorting out inequality, injustice and exclusion), these are still fascinating developments. And I’m still waiting for a really convincing explanation of Kenyan exceptionalism: according to the accompanying editorial, Safaricom handles more than half the world’s mobile money transactions.

Why don’t we just send aid money directly to poor people’s cellphones?

Just before Christmas I had a thought-provoking discussion on the BBC World Service with Paul Niehaus, who has set up GiveDirectly, a US-based startup NGO pioneering a new financing model based on cash transfers. The idea couldn’t be simpler:

1. People donate through GD’s webpage
2. GD locates poor households in Kenya (see below)
3. GD transfers your donation electronically (through the M-Pesa mobile payments system) to a recipient’s cell phone (they send each household $500 per year for two years)
4. The recipient collects the transfer

GD reckons that in this way, it can get 90 cents in every donated donor into the hands of poor people. Step 2 is interesting: ‘We do this in three steps.  We first select regions of Kenya with high poverty rates using census data.  We then identify villages with low-quality housing and access to an agent providing mobile-phone-based payment services. Finally, we identify the poorest households in these villages using simple, transparent criteria: we target all households living in homes made out of mud, wood, and grass. These criteria effectively identify relatively poor households and are generally perceived by the community as fair. We record eligible households’ phone numbers or, for those that do not have a phone, provide them with a SIM card. We follow up initial identification with a rigorous process of audits to prevent mistakes or fraud.’

What’s innovative about this is the coming together of cash transfers (CTs) and mobile payments systems to make the CT option available to individual donors, rather than (as previously) being exclusively a government, big aid donor or large NGO activity (Oxfam does lots of them – in fact it was our cash for coffins project that partly gave Paul the idea).

There was a high level of agreement in the BBC discussion (doubtless to the horror of the producer – arguments make much better radio). This kind of approach is exciting, but only relevant to part of the aid and development story – for example in the Horn of Africa, we are doing cash transfers, but also have to work to get market traders to re-establish supply chains in the worst-hit areas or there is nothing for people to spend the transferred money on.

While they help with short term consumption and investment, cash transfers don’t directly tackle the kinds of systemic problems that underpin poverty and inequality – dealing with those requires a more complex approach based on partnering with local civil society organizations, and all that brokering and convening stuff I write about on this blog. And what about gender – who owns the phones and gets access to the $500? It would be interesting to see if there’s a difference between how men and women phone-holders spend the money – I wonder if GD have included that in their monitoring and evaluation?

Finally the approach seems inherently individualistic – there is no obvious way to fund community organizations in this model. At least not yet. I talked to our fundraisers prior to the interview and they linked this to a generational shift. Younger people are less trusting of institutions than older ones, so the pressure for this kind of person-to-person ‘disintermediation’ (sorry) is only likely to grow. People only believe their money is doing good if they can see it drop into the hand (or cellphone) of a recipient. Oxfam has already responded to this with schemes like Projects Direct, and new initiatives like Kiva and now GiveDirectly are addressing the same disquiet.

An alternative approach is to do a better job in explaining why we need to use people’s donations to tackle the underlying structural causes of poverty, through a more complex (and expensive) engagement with the state, companies, civil society organizations etc.

But another might be to put the two together. If the new generation is both more activist (Occupy, Arab Spring etc) and more sceptical of institutions, how about adapting the GiveDirectly model to ‘sponsor an activist’? Your $10 a month would go straight to the cellphone of a named HIV activist, or a land rights organizer. In return you would get regular tweets, blogs or whatever so you can follow what they’ve been getting up to. Paul says he’s going to think about the idea, but is anyone already doing it? If so, how’s it going?

You can listen to the piece here, with Paul Niehaus of GiveDirectly, Mike Jennings of SOAS and me, (although it might have got a bit truncated at either end of the 7 minute piece).

Mobile phones and farmers – what are the benefits?

There’s a ridiculous amount of hype talked about mobile phones, but they clearly are having a significant impact on poor people everywhere in lots of unexpected ways. Last year I met a group of Ethiopian coffee farmers who had no running water or electricity in their homes, but each family had a phone. When I asked what difference they make, the answer was always the same. You can check in on your relatives, talk to the sick, or sort out a meeting without going in person. By skipping the landline stage and moving straight from having to walk miles to see someone (public or private transport is rare, beyond mules and horses), without any certainty that they will be there when you arrive, to calling them on the mobile, the new communications technology has brought huge time savings.

That’s pretty typical of discussions of mobile phones and development – another uplifting anecdote and not much data. But now Vodaphone have teamed up with Accenture and Oxfam to try and take a more systematic look in order ‘to stimulate the necessary engagement between mobile operators, governments, NGOs and businesses to realise these opportunities and explore others.’ The result is a new report ‘Connected Agriculture:  The role of mobile in driving efficiency and sustainability in the food and agriculture value chain’. Here’s some highlights:

“The study concentrates on 12 opportunities for mobile technology, in four key areas highlighted by stakeholders: improving access to financial services, provision of agricultural information, improving data visibility for supply chain efficiency and enhancing access to markets. Where possible, researchers modelled the anticipated total number of mobile connections to each service in 2020 and the associated potential increase in agricultural incomes and reduction in carbon dioxide (CO2) emissions…… Each of the 12 opportunities was modelled across 26 countries in Africa, India, Australasia, Europe and the Middle East.

Mobile communications can help to meet the challenge of feeding an estimated 9.2 billion people by 2050. The 12 specific opportunities [see table - keep clicking on it if you want to expand] explored in this study could increase agricultural income by around US$138 billion across 26 of Vodafone’s markets in 2020.

They could also cut carbon dioxide emissions by approximately 5 mega tonnes (Mt) in these markets and reduce freshwater withdrawals for agricultural irrigation by 6%, with significant savings in water-stressed regions. These benefits assume there will be around 549 million mobile connections to relevant services in 2020.

Mobiles can help farmers improve agricultural productivity by giving them access to basic financial services, new agricultural techniques and new markets, in turn helping them to secure better prices for crops and a better return on investments. As their income improves with each harvest, they can invest in better seeds, fertiliser and chemicals.

The greatest potential for improving farmers’ income comes from access to financial payments and agricultural information via mobile, together delivering approximately 75% of the total increase in agricultural income from the opportunities studied.”

I have to admit that from what I could read in the report, I wasn’t convinced by the big numbers. They reckon the $51bn from improved access to financial services would come from an additional 240 million connections – that’s over $200 per mobile per year, which seems an awful lot for a typical small farmer (and the report claims to focus on smallholders). The methodology annex is pretty sketchy but says ‘the increase in agricultural income was based on the potential uplift in average value added per agricultural worker. The potential uplift factor was based on empirical field studies where available, rather than attempting to model the complex individual drivers responsible for increasing smallholder income.’ What it doesn’t say is the extent or whereabouts of those field studies.

But in any case, on the basis of my own (ahem) in depth research in Ethiopia (i.e. the conversations described in the first para), I’m not sure dollars and cents are the best metric for measuring the human impact of mobiles. Has anyone seen or done any research on the broader (and perhaps more important) impact on the time/care economy?

In her foreword to the report, my boss Barbara Stocking distances Oxfam from the number crunching (we had our doubts about that bit), welcomes the focus on mobile financial services, on moving this discussion away from corporate philanthropy and into discussions of core business models and applying these to smallholders, and urges the phone companies and others to go further in three areas:

• How mobile technology could improve the efficiency of government safety net systems that assist the poorest and most food insecure small farmers – rather than looking only at the role that mobile technology can play in increasing farmer productivity and income from agriculture

• How companies such as Vodafone can better understand, document and address barriers to the use of mobile technology affecting women. Getting new technology owned and used by women often carries significant challenges, for example overcoming illiteracy and cultural norms which mean that men tend to be the early owners and beneficiaries of new technologies

• How mobile technology could drive new agricultural practices rather than simply greater efficiency in current practices, particularly around climate change adaptation, and ensuring focus is given to a full range of opportunities around climate change adaptation.

To which I would add the bit about the time economy.

New books on development: bad microfinance; climate change and war; what works; inside the World Bank; mobile activism

One of the perks of writing a blog is that I can scrounge review copies of development-related books. I’m sure they’re all fascinating and I really want to read them but alas, they don’t come with extra hours in the day attached. So I now have a growing pile by my desk that is in danger of becoming a health hazard (pet cat crushed under falling tomes etc). In post holiday clear-out mode, I am therefore going to assuage my guilt by giving them all a plug after a cursory skim.

Why Doesn’t Microfinance Work? The Destructive Rise of Local Neoliberalism, by Milford Bateman (see here for reviews of his previous work) is a passionate polemic that takes on a development shibboleth – sometimes it feels as though doubting microfinance is as heretical as criticising Nelson Mandela. But Bateman does so, arguing that microfinance doesn’t actually work, relies largely on hype, and is uncritically welcomed because it fits with an anti-state, pro-market mindset of the Washington Consensus (shades of de Soto and the debate on property rights). He thinks that microfinance has squeezed out more beneficial and effective approaches, such as local-level industrial policy. One minor criticism – he doesn’t seem to distinguish between microcredit and other, genuinely useful activities such as microsavings – it’s the microcredit bit that has been massively oversold.

Update: For another survey of the evidence, which finds a more mixed balance of success and failure (apparently independent, though funded by the Grameen Foundation), see Taking Another Look, by Kathleen Odell, summarized on his blog by CGD’s David Roodman.

Global Warring: How Environmental, Economic and Political Crises will Redraw the World Map, by Cleo Paskal of Chatham House (and author of the Tonga renewables article I posted on a while ago) links up debates on security, development and environment, exploring the intersection between geopolitics and climate change: will it accelerate the decline of the West and the move to a multipolar world? Will it alter global trade routes and the geopolitics that they shape? How will shifting rainfall patterns and rising sea levels change Asia and the Pacific?

What Works for the Poorest? Poverty Reduction Programmes for the World’s Extreme Poor, by David Lawson, David Hulme, Imran Matin and Karen Moore, showcases some of the excellent research by the Chronic Poverty Research Centre (see here for more on its work). It focuses on the 400 million or so ‘chronic poor’ – the people who are likely to be stuck below the $1.25 global poverty line for decades or lifetimes. Trickle-down economic growth often doesn’t work for groups such as the impoverished elderly, disabled people, or excluded ethnic or religious groups. The book seeks practical solutions elsewhere, with case studies of the nitty-gritty of targeting (in Bangladesh and Kenya), cash transfers and other social protection systems (Chile, Viet Nam), women’s empowerment in Gujarat, the inevitable chapter on India’s National Rural Employment Guarantee Scheme, decent work (South Africa) and health equity funds (Cambodia). Finally it tackles finance with chapters on microfinance and domestic resource mobilization.

The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency, by David Ian Shaman is a bit long (568 pages) and shrill for my taste, but at least it is written by an insider – Shaman was involved in trying to improve Bank transparency through an internet-based broadcasting station putting out unedited internal discussions and debates to the public. As can be imagined, that hit a lot of internal opposition, leading Shaman to conclude ‘I believe there are two World Banks. One recognizes mistakes and limitations; the other rejects its own fallibility, promotes its superiority and shelters itself within the confines of its authority.’ Sounds about right.

And finally, something altogether different and exciting: SMS Uprising: Mobile Activism in Africa, by Sokari Ekine (editor, and one of Nigeria’s top bloggers), is a brief edited set of case studies of how activists are using mobile phone technologies to change Africa. It’s a ‘try these ideas in your campaign’ manual, with examples from Zimbabwe, South Africa, Uganda, Kenya and the DRC. Well worth a trawl.

Apologies for cursory reviews, and if readers know of more serious treatments, please add links in the comments section. If any of the publishers feel short-changed and want their copies back, they only have to ask.

How to insure crops with a mobile phone – an experiment from Kenya

For technophiles everywhere, an uplifting story from a recent issue of The Economist:

‘One of the things holding back agriculture in developing countries is the unwillingness of farmers with small plots of land to invest in better seed and fertiliser. Only half of Kenyan farmers buy improved seed or spend money on other inputs. Many use poor-quality seed kept from previous harvests. That is understandable when drought or deluge can destroy their crop, but it has the effect of reducing yields. A new microinsurance scheme promises to help.

Kilimo Salama, which in Kiswahili means “safe farming”, uses a combination of mobile phones and 30 automated solar-powered weather stations to provide crop insurance. It has been set up by UAP Insurance of Kenya, Safaricom, Kenya’s biggest mobile-network operator, and the Syngenta Foundation for Sustainable Agriculture, part of a big Swiss agribusiness group. After a successful trial with 200 farmers last year, Kilimo Salama has just been expanded in the hope of attracting 5,000 farmers in western and central Kenya this year.

Farmers pay an extra 5% to insure a bag of seed, fertiliser or other things like herbicide against crop failure. MEA Fertilisers and Syngenta East Africa, two agribusinesses hoping to benefit from higher sales of their products, match the farmers’ investment to meet the full 10% cost of the insurance premium.

The clever bit, however, is the administration. Local agents register a policy with UAP by using a camera-phone to scan a bar code on each bag sold. A text message confirming the policy is then sent to the farmer’s handset. Farmers are registered at their nearest weather station, which transmits data over the mobile network. If weather conditions deteriorate, a panel of experts uses an index system to determine if crops will no longer be viable. At that point payouts are made directly to the handsets of farmers in the affected areas using Safaricom’s M-PESA mobile-money service.

With no field surveys, no paperwork and no middlemen, transaction costs are minimal. The scheme is designed to be self-financing. And clear terms should help Kilimo Salama overcome farmers’ distrust of previous insurance schemes, says James Wambugu of UAP. So should word of mouth. The trial scheme was hit by one of the worst droughts in decades, triggering compensation payments of 80% of farmers’ investments. The average amount of insured seed in the area has now risen from 2kg per farmer to 4kg.’

And here’s a video from the Kilimo Salama website

Over to the technosceptics – what are the downsides?

Using mobile phones to combat medicine shortages in Africa

Most of the coverage (and hype) around mobile phones and development is based on their potential to improve access to markets for small farmers, especially those in remote areas and to provide easy ways to transfer small amounts of money in the absence of functioning bank networks. But mobiles, which are rapidly becoming ubiquitous in most poor countries (like a kind of technological Coca Cola), have some real possibilities for those campaigning on access to essential services such as healthcare, according to an article by Ken Banks.

The “Stop Stock-Outs” campaign is based around a little-known, but devastating, problem. Medicine stock-outs — where local clinics and pharmacies run out of high-demand, crucial medicines — are a potentially lethal problem in a number of African countries, yet governments insist they don’t occur. The team behind the project set out to find a solution and asked themselves, ”What could be more powerful than a map which contradicts these government claims?”

Last year, activists in Kenya, Uganda, Malawi and Zambia started surveying clinics in their respective countries, checking stock levels of essential medicines. These included first-line antimalarials, zinc tablets, penicillin, first-line anti-retrovirals (ARVs) for the treatment of HIV/AIDS, and diarrhoea medication. Each of these medicines is widely used in the four countries.

After visiting clinics and pharmacies, activists reported their results using their mobile phones through structured, coded text messages (SMS) – “x,y,z” – where the first number represented their country code (Kenya, Malawi, Uganda or Zambia), the second their district or city, and the third the medicine which they found to be out of stock. The messages were then visually displayed on an online map, showing specific reports by location and building up “hot spots” of activity. In the case of the “Stop Stock-Outs” campaign, the bigger the hotspot the greater the number of stock-outs, and the greater the problem in that area.

Within the first week alone, the team collected reports of 250 stock-outs of essential medicines in their four target countries. Because incoming data automatically populates the map, it represents an almost real-time picture of stock-outs. After a successful launch and a week piloting the service, the “stock-out SMS number” has been distributed to medicine users throughout each country so that anyone with a mobile phone can send in a stock-out report. However, unlike reports from official, known data collectors, these messages will firstly be checked by staff at Health Action International before being posted up on the map. Then the government can’t deny it’s happening and the public pressure can really start.

Very smart indeed. Anyone know of other examples of using mobiles to campaign on essential services? Oh, and Happy New Year everyone…..

[h/t Nancy Holden]

Mobile phones and magic bullets

The Economist continues its love affair with the mobile phone in a recent special report. Highlights:

‘In 2000 the developing countries accounted for around one-quarter of the world’s 700m or so mobile phones. By the beginning of 2009 their share had grown to three-quarters of a total which by then had risen to over 4 billion. [see chart]

China is the world’s largest market for mobile telephony, with over 700m subscribers. India is adding the biggest number each month: 15.6m in March alone. And Africa is the region with the fastest rate of subscriber growth.

Three trends in particular are reshaping the telecoms landscape. First, the spread of mobile phones in developing countries has been accompanied by the rise of home-grown mobile operators in China, India, Africa and the Middle East that rival or exceed the industry’s Western incumbents in size.

These operators have developed new business models and industry structures that enable them to make a profit serving low-spending customers that Western firms would not bother with. Indian operators have led the way, and some aspects of the “Indian model” are now being adopted by operators in other countries, both rich and poor.

The second trend is the emergence of China’s two leading telecoms-equipment-makers, Huawei and ZTE,….. prompting a shake-out among the incumbent Western equipment-makers.

The third trend is the development of new phone-based services, beyond voice calls and basic text messages, which are now becoming feasible because mobile phones are relatively widely available. In rich countries most such services have revolved around trivial things like music downloads and mobile gaming. In poor countries data services such as mobile-phone-based agricultural advice, health care and money transfer could provide enormous economic and developmental benefits.’

The one unconvincing bit is the claim, based on some World Bank econometrics that ‘adding an extra ten mobile phones per 100 people in a typical developing country boosts growth in GDP per person by 0.8 percentage points.’ The source for this isn’t online, but I’m trying to track down whether the Bank researcher is really claiming causality, correlation or a mixture of both. If it’s causality we can forget aid, let’s just drop crate loads of mobiles on poor countries and declare victory (yes, I realize it might be a bit more complicated than that……..)

If you are left wanting more, UNCTAD’s recent Information Economy Report 2009 should sort you out (Guardian summary of the report here). As a panacea, mobiles are right up there with microcredit, but for a rare bit of mobile phone scepticism, see my previous blog here.

The Economist has even provided a 3 minute video summarizing the report

Links I liked: mobiles v coke; Obama’s Mandela moment etc

Are mobiles the new Coca Cola? Mobile phones are held up as the most promising aspect of new technology in terms of helping poor people improve their lives, but some new research suggests people are cutting back on food and other essentials to pay for the all important status symbol. See here for a summary of the research and discussion.

A promising new website called African Arguments Online, hosted by the Royal African Society and the Social Science Research Council, promises to provide ‘the most vigorous debates on Africa available on the web’.

Why is the Hudson airplane rescue a metaphor for the financial bailout? See here

Hyperactive Yale blogger Chris Blattman tries to ‘dream like an engineer’ on African infrastructure here

Top Guardian columnist Polly Toynbee brilliantly captures the historical significance of the Mandela moment of Obama’s inauguration here. I thought Obama’s speech showed a real recognition that campaigning may be conducted in poetry, but governing is done in prose (a line originally coined by Mario Cuomo, I believe).

And just because I like the title, how about ‘markets punish UK for saving markets‘. The UK government bails out the banks at huge cost to the taxpayer. Financial analysts say ‘ooh look, a big deficit’ and start dumping sterling and shares. In the immortal words of Gordon Gekko in Wall Street, ‘if you want a friend, get a dog.’