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AFRICA: What Does Africa Need Most: Technology or Aid?

by Jason PontinThe New York Times
June 17th, 2007

I am just back from Tanzania in East Africa.

In the mornings, disregarding the protests of the armed guards at my lodge near Arusha, I jogged along muddy footpaths. After the heavy rains, and under a low, misty sky, the fields looked as ruined as a battlefield. Very poor farmers and their children stared curiously at me as I passed.

In the afternoons, I attended the TEDGlobal 2007 conference, held by the Technology, Entertainment and Design organization in the modern Ngurdoto Mountain Lodge. The contrast between the two experiences troubled me.

TED conferences, mostly held in Monterey, Calif., are invitation-only affairs, are attended by the aristocracy of Silicon Valley and are known for their adventurousness in drawing together wildly disparate trends in technology, business and the arts.

On this occasion, Bono, the Irish rock star and champion of African causes, had persuaded the conference’s organizer, Chris Anderson, to invite the usual crowd, as well as African entrepreneurs, activists, health care professionals and artists to this tropical, leafy region midway between the Serengeti Plain and Mount Kilimanjaro.

Opening the conference on June 4, Mr. Anderson described his purposes as frankly promotional. Too often, he said, the only images of Africa that Westerners see are of drought, famine, disease and civil war. By contrast, TED Global 2007 would present an Africa that was newly entrepreneurial, increasingly wealthy and tech savvy, and largely politically stable.

“It’s a story,” Mr. Anderson said, “that is unfolding across the continent, and it’s a story that’s not well known outside of Africa.”

But beyond this Panglossian message, however much a corrective to the common images of African misery and however flattering to the pride of TED’s African attendees, was something that everyone at the conference knew (and which I saw every morning on my runs). Whether measured by per capita income or by the gross domestic product of its nations, Africa is the poorest place on earth. The question that the conference was really exploring was this: How can we make every African family richer?

At TED Global 2007, I witnessed one small skirmish in a larger ideological conflict between those who believe that Africa needs more and better international aid, and those who think entrepreneurialism and technology will lift the continent out of poverty and thus reduce its miseries.

Predictably, TED’s attendees and speakers were spellbound by technology and entrepreneurialism and, at the same time, distrustful of international aid.

“What man has ever become rich by holding out a begging bowl?” asked Andrew Mwenda, an Ugandan journalist and social worker, now a research fellow at Stanford in California.

Mr. Mwenda argued that $500 billion in international aid over 50 years had achieved nothing in Africa and that the persistence of African poverty could be explained, in part, by aid. Charity, he said, had “distorted the incentive structure” and had persuaded the brightest Africans to work for corrupt governments. He called upon African entrepreneurs to build African businesses and the American investors in TED’s audience to finance them.

Echoing Mr. Mwenda, Russell Southwood, the publisher of Balancing Act, a newsletter about technology in Africa, implored African entrepreneurs and Western business leaders to “invest in shortages.” Africa, he said, could “leapfrog” the industrial technologies that Westerners use and build truly 21st-century technology systems and networks.

As an example, Mr. Southwood pointed to a near absence of telephone landlines in sub-Saharan Africa; cellular networks for mobile phones could quickly bring modern communications to hundreds of millions of Africans.

At least one of the African attendees of the conference was representative of the kind of technological entrepreneurialism that the show advocated.

Alieu Conteh, the chairman of Vodacom Congo, was born in Gambia, in West Africa, 55 years ago and moved to Congo in 1981. For years, he was a successful coffee buyer and exporter.

Congo is about the size of Western Europe and has an estimated population of 65 million people. It is one of the least-developed nations in the world, with less than 300 miles of roads, most of them in poor condition.

In 1997, Mr. Conteh recalled in an interview, he heard Laurent D. Kabila, then the country’s president, deliver a speech in which he called upon his countrymen to rebuild Congo’s infrastructure after the 30-year dictatorship of Mobutu Sese Seko. Mr. Conteh, who had no experience in telecommunications, said he was inspired. He decided to build the nation’s first GSM (Global System for Mobile communications) digital network.

At the time, according to Mr. Conteh, fewer than 10,000 people living in Congo — mainly business people, foreigners and government employees — had mobile handsets. They paid $7 to $10 a minute to make a call, using an older technology. Less than 15,000 homes had a telephone landline.

Mr. Conteh said he went, cap in hand, to the minister of communications to ask for the country’s first GSM license. In January 1998 he got it — but he first had to pay the government a license fee of $100,000. Over the years, and with little explanation, he said, the government, which is often terribly short of money, increased the license fee, first to $400,000, then $2 million.

Since, at first, no Western investors had any faith in the country’s mobile market, Mr. Conteh said he wrote the first checks to the government. And he paid $1.5 million to Nortel, the telecommunications equipment provider, to help create his network. To help raise the money, he had to sell his coffee trucks. In February 1999, Mr. Conteh introduced the Congo Wireless Network, with just 3,000 subscribers.

Throughout the early days of his company, Mr. Conteh faced challenges unknown to Western businesses. Once, after equipment providers declined to send engineers to Congo during a dangerous time in the country’s unending civil strife, he encouraged the citizens of Kinshasa, the capital, to collect scrap metal and weld them into a cellphone tower.

In 2001, he sold 51 percent of the company to Vodacom, South Africa’s largest mobile service provider, to get the capital to expand the mobile network to millions of Congelese.

By the middle of 2006, Vodacom Congo had more than 1.5 million subscribers, according to Vodacom’s annual report. Today, Mr. Conteh says, the company he founded has more than three million subscribers who have spent, on average, around $50 for a handset and who prepay about $2 for every five minutes of talk time. He says a recent offer for his shares valued Vodacom Congo at more than $1.5 billion. (He refused to name the interested party.)

Nonetheless, Mr. Conteh (whom I found charming, modest, hugely amused by his own travails — and very shrewd) turned down the offer. “My goal was never to become the richest man in Congo,” he told me. “I would like to create the country’s first stock market. Then I would like to float 20 percent of my share in a public offering, so that the people will see the company as theirs.”

MR. Conteh is building a telecommunications network where none existed before. With 600 employees and 5,000 contractors, Vodacom Congo is one of his country’s biggest employers. If he realizes his ambition to create a stock market and offer shares in his company, he will have created new wealth. But the tale of Vodacom Congo also illustrates the difficulties of creating new businesses in Africa and the limits of entrepreneurialism as an alternative to international aid.

Mr. Conteh accepted risks that few businesses would, and for many years he found it impossible to attract more than a few eccentric investors. More significant, it has taken Mr. Conteh more than a decade to provide telecommunications to less than 10 percent of the country. While the existence of Vodacom Congo may one day help build other businesses, the country’s general poverty is not alleviated by the existence of the company.

In truth, Africa will need both investment in entrepreneurialism and aid, intelligently directed toward education, health and food.

Herman Chinery-Hesse, the founder of Softtribe, a software development company in Ghana, expressed this thought more personally than I could. “I think this choice between aid and entrepreneurship is false,” he told TED’s attendees. “If we wait for trade, it will take generations, and people need help now. On the other hand, only entrepreneurship can make us rich.”



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