“Dumsor” is literally “off-on” and refers to the “scheduled” load shedding that has been instituted to help Ghana “temporarily” manage a perfect storm of issues related to energy generation and distribution. The roots of the crisis go deep, and layer after layer of technical, social, political, geopolitical turmoil have created a situation that will take years to fully resolve.
The web of interrelated issues includes dropping oil prices, volatile foreign exchange, poor management and maintenance of the grid infrastructure, aging equipment, the rupturing of the West African gas pipeline near Takoradi, low water levels in the two main hydroelectric reservoirs, rapidly increasing year-on-year demand, and energy theft. The government owes money to the distribution company, Electricity Company of Ghana (ECG), which owes money to the generating authority, Volta River Authority (VRA), which owes money to the Ghana Natural Gas Company which runs the Atuabo Gas Processing Plant, and owes money to the West African Pipeline Co, which ships the natural gas from Nigeria. The ECG has kept electricity prices low for the past several decades for social and political reasons, but still has not been able to collect about $1.6billion from the government. Meanwhile, installed generating capacity has struggled to keep up with rapidly growing demand.
One would think this crisis would be a golden opportunity to usher in a new era of renewable energy sources, distributed micro-generation, and the de-bureaucratizing and depoliticizing of the electricity system, but this does not appear to be the case. Most Ghanaians who can afford to, have bought gas or diesel generators to supplement the variable grid power. This is mainly thought of as a last ditch, temporary measure to cope with the situation for a few more months until the crisis subsides. As with people everywhere, Ghanaian’s appetite for making the long-term, capital intensive decision to install a solar power system is fairly low. It is not that people do not understand the advantages of doing so, but when you are scrapping together just enough cash to eat and pay the rest of the bills, it is much easier just to buy a few litres of petrol at a time and try to get by.
Even on a large scale, the general direction Ghana has taken is to double-down on natural gas, light crude and other non-renewable sources. These are proven, low-risk technologies that are relatively cheap and dependable. There are bright spots and small initiatives to convert portions of the supply to renewable sources, but so far there is no evidence of a concerted effort to make a long-term change. The international community has not done much to promote or support a shift in energy policy as a whole and seems to be content with the status quo. Turkey is sending over two 225MW Karpowerships, (offshore power barges), to supplement generation which should be complete in the next month or so. Meanwhile, USAID is promoting its Gas Action Plan and Gas Master Plan to encourage more domestic production of natural gas, as well as pushing for the privatization of the ECG.
The Dumsor Report, released on August 6, is a great, data-backed analysis of the current electricity crisis, breaking down Dum and Sor for different neighbourhoods across Accra. It is clear from the data that this issue goes so much deeper than just scarcity or the logistical hurdles of electricity distribution. It touches on inequality, the allocation of a scarce basic resource, the abuses of public institutions for personal gain, and the way people relate to and think about energy. As they say in the report, “Do you have lights?” has replaced “Hello” in the Ghanaian vernacular and electricity is discussed with the same aura and wonder as the weather.
These issues permeate and bear upon the entire psyche of the country, undermining not only direct economic activity but also social and cultural norms and practices. The draining psychological effect of living under the Democlesian sword of unpredictable blackouts is hard for an outsider to comprehend. The exuberant shouts of joy in the streets when the lights turn on, the groans and expletives when it unexpectedly turns back off, the insipid, creeping fear and guilt of knowing that you’ve-had-lights-for-so-long-now-that-something-surely-must-be-wrong-and-that-your-good-fortune-can-only-mean-you-will-be-rewarded-with-an-extended-outage, take their toll in surprising ways.
As Chimamanda Ngozi Adichie says in her New York Times piece about the situation in Nigeria, “I cannot help but wonder how many medical catastrophes have occurred in public hospitals because of “no light,” how much agricultural produce has gone to waste, how many students forced to study in stuffy, hot air have failed exams, how many small businesses have foundered. What greatness have we lost, what brilliance stillborn?” Ghanaian MC, Sarkodie, says in his song Dumsor, “I think we deserve a break down and we want to understand what’s happening. What are you guys doing?” Dumsor has also spawned Youtube videos, a new Wikipedia article, a special dumsor flash light app for Android, dances, vigils, and endless political bickering between the country’s two main political parties.
This issue represents an example of something that I’ve seen repeated over and over again: a complex development issue that defies a simple story. You cannot just say “ECG is corrupt and the New Democratic Party (NDC), currently in power, is the cause”. You cannot just say “the World Bank and the IMF, forced Ghana to privatize its electricity generation in the 90s, and this is the cause”. You cannot just say, “Ghana should invest in renewables”, or “Ghana needs a Gas Action Plan”. No one explanation will suffice and no one solution will make everything go away.
Living in Ghana for the past two years, I’ve been relatively privileged with my access to electricity. Where I lived in Tamale, I was near the water pumping station, so there was near constant power. Where I am living in Accra, the compound has a generator for a few hours per night. I am also able to sit in coffee shops, plug-in my laptop at restaurants, and roam freely around the city in search of the elusive Sor. What has been most eye-opening is just how much electricity I need to survive. Basically about 5hrs of light at night, a few hours throughout the day to charge my phone and laptop, and occasionally enough to run a small fan and I’m satisfied.
It is hard to know how dumsor will evolve and what the next few months will bring, but people are definitely working hard to solve these issues, citizens are active and engaged in debate about what to do and most are relatively good-humoured and optimistic that Ghana can overcome this set back and get back on track. It’s the weekend, so I should have power for at least 24hrs, life’s good!
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Taimako Enterprises Ltd, first detailed here, is the family own and operated agri business that I was first matched with when I arrived in Tamale circa Oct 2013. I worked on and off with them on a variety of projects over the 10 months of my first year. While progress was made and many good things definitely happened, the unintended and unplanned for consequences of the engagement actually yielded the most interesting results. In fact, looking back on the project and knowing what was actually valuable to Taimako is very informative and indicative of the whole small business consulting concept.
As a quick summary, the work at Taimako, at least ostensibly, centered around three main objectives:
Production Planning and Organization
These objectives were co-developed between Taimako and BDSA after having worked together for several months to gain an appreciation of the issues facing the company. In the end, our approach was to try to offer a range of solutions and work with Taimako to pick and choose which elements to experiment with and adopt.
So what actually ended up happening at Taimako? What were immediate outcomes? When will we know about the actual, long-term impacts of the work? And, what is the counterfactual, i.e. what would have happened had we never began the engagement? At this stage we have some answers for the first two questions and can conjecture about the final two.
Across Taimako’s multiple business units, the focus of the work shifted multiple times. First it was centered on the food processing scheme, but as the market realities of this business became clearer, it was decided to refocus efforts on the core business of tree seedling production. To this end, Taimako was able to procure additional nursery land near the centre of town, (their existing nurseries are located in surrounding rural areas).
This new plot is located in the Tamale Forestry Reserve, a sort of unintentional city greenspace that once served as a reservoir, and now mainly harbours the local Rastafarian population, wayward youth of all stripes, and various squatter farmers. Taimako worked through both the local government and the traditional authorities (chieftaincy) to secure a 2 acre parcel of land near the roadside. In the course of only few months, they were able to clear the land of many years of accumulated garbage; erect several structures, including a guinea fowl hatchery, shade cloth area, and a basic mosque. In short,covert an underutilized area into a beautiful nursery with thousands of tree seedlings, exotic plants and samples of local pottery .
While the rows were not in straight lines and no one could tell exactly how many trees were in each one, as I would have liked, the nursery seemed to happily straddle both order and chaos. We were able to implement simple recordkeeping, inventory and accounting systems to track sales and expenses across the business and made progress towards organizing their production methods. In the end, this new nursery has been a remarkable success for Taimako. It has helped them find new markets for their products; it has reinvigorated and refocused the management on their core business of tree seedlings; and it has helped them become more independent of the highly variable government contracts that were once their mainstay.
This new pilot initiative was developed by Taimako after encountering many frustrations working with the government sponsored afforestation project known as SADA. There have been many tree planting initiatives in Northern Ghana over the past several decades. Most have been large-scale, government or NGO-driven projects designed to combat desertification, improve the livelihoods of rural people, and/or to mitigate the negative effects of climate change. While these large, top-down projects have had some success and were able to quickly achieve scale, there have been many issues with sustainability and local ownership after the projects have ended.
This community tree sales idea was borne out of Taimako’s interest in local communities and their long history as traditional herbalists and tree growers. This past year they piloted a “Base of Pyramid” social business model whereby individual families and groups combine resources to make slightly subsidized bulk purchases of tree seedlings and plants for their compounds and surrounding lands. At scale, this will provide a significant and growing market for Taimako’s products and provides a reliable source of tree seedlings and information for communities to champion their own livelihoods. At the same time, it avoids the major pitfalls of traditional, plantation style tree planting schemes, by focusing on small-scale, direct ownership of the trees by individual families.
This project is expected to achieve a number of very important results. There are the direct quality of life and economic impacts for the individual families purchasing the trees, as well as the indirect social and environmental impacts on the community. The benefits or “returns” on the initial investment on these seedlings could be realized after only a few years of growth and include up to 20 years of production of cash and food crops (mangos, cashews, shea), animal fodder, fuel-wood, building materials and traditional medicines, as well as a source of shade and wind/rain/soil protection. Each tree that is planted also has the potential to remove 1 ton of Carbon Dioxide from the atmosphere over its lifetime.
BDSA was able to help Taimako with some basic business planning and modeling for this initiative, and to develop some marketing/information materials to share around the community. We also did a fairly extensive survey of grants and potential NGO partners to bring on to scale this project, but so far we are still looking.
Other Minor Successes
Recordkeeping & Evidence-back Decision Making
A significant transformation for Taimako has been in how they perceive the value of detailed recordkeeping and data-informed decision-making. This has been demonstrated in their adoption of recordkeeping books at the nursery and the use of financial modeling to predict the scope of the pilot version of their community tree seedling sales business. A large reason behind this transformation has been in closing the loop between collecting data, manipulating it in order to reach a conclusion and acting on that new information. Having seen this process come full circle, Taimako has realized the value and the potential to benefit their business.
A primary objective of Taimako’s for this project was to raise its level from a large, but relatively opaque family business, into a more open, transparent and professional enterprise that could be easily be partnered with. Through a mix of financial policy development, labour practices, and written documentation, Taimako is now in a much better position to communicate and present its business to investors, granting foundations, financial institutions and other partners. Using the goal of securing impact investment or grants as unifying force behind this work, helped focus efforts on a tangible outcome and drive the development in a cohesive way, even if partnering is still some time into the future.
Challenges & Failures
Processing Plant and Mango Plantation
While progress was made in other areas, these two business units were put on the back burner for the time being. The processing plant is awaiting an injection of capital, but more to the point it needs a passionate champion to take ownership and help drive it forward. This might come in the form of new employee or through partnership with other producers. Either way, the need and potential for local food processing and preservation is just too high to let this initiative sit idle for long. As for the mango plantation, with the advent of the rainy season, the need for regular watering, vigilance against brush fires and other direct interventions has dropped off. The farm is still a few years away from producing a viable crop, but Taimako already has ambitious plans for how to get the most out of this investment.
Over Emphasis on Securing Financial Investment
A main assumption made at the beginning of the project was that Taimako would be seeking outside investment in the near term and some of that money would be used to offset BDSA’s fees. It became clear later in the project that this was not the preferred tactic of Taimako and that they would prefer to self-finance for the time being. BDSA failed to adequately respond to this change and held fast to the belief that the company would be interested in pursuing debt or equity financing, without giving enough attention to Taimako’s actual financing requirements. This also stems from the current mania for financial products in the world of development, which assume a lack of capital is the primary stumbling block for companies.
Overemphasis on Production Efficiency and Technical Inputs
Too much emphasis was put on production efficiency and backend process improvements in the form of planning tools and cost saving measures. By focusing too much on these technical inputs, BDSA missed the larger and more crucial opportunities to help the company clarify their direction and provide less tangible support like coaching and guidance on leadership and family business matters.
Lack of Co-Ownership of Problem Identification
The information asymmetry and power dynamic between the outside “expert consultant” and the passive/receptive client (inherent in these relationships), created a situation where it was very difficult to obtain direction and co-ownership with Taimako. The latter would often rely on BDSA to be both the problem identifier and the solution provider which made it difficult to achieve the necessary commitment and motivation to follow through with changes.
There was a lot of focus put on deliverables such as policies and best practices which were not necessarily valuable in and of them self, but hopefully representative of a deeper change in the organization. Unfortunately, in many cases this lead to the opposite effect of “isomorphic mimicry” where BDSA was helping Taimako look like a better organization without actually changing it to become one.
Limits to the Embedded Approach
The long-term, embedded consultant approach put too much pressure on Taimako to always be making use of BDSA, and put pressure on BDSA to find things to do to keep busy. The embedded approach is more appropriate for a project-based engagement than it is for general business system development. A more flexible relationship where BDSA could have charged a daily rate would have allowed the same amount of work to be completed, but would have made more efficient use of both parties’ time.
The 10.5 month relationship with Taimako was both very rewarding and very challenging, with many unforeseen events taking place in the timespan. A strong foundation has been formed for Taimako’s business and many of the right components are now in place to allow them to achieve their long-term goals. The next steps are in the very capable hands of their management, and there will no doubt be many more successes and challenges to face the company in the future.
On personal level, I cannot imagine having a better client and work environment than I experienced with Taimako. The entire family was unfailing open, welcoming and warm and I always felt we interacted in a very direct and honest way which greatly enhanced the relationship. Getting to know the family and being hugely inspired by their vision for both their business and their community at large has, without a doubt, been one of the most satisfying experiences of my life. I can only hope that my contributions reciprocated a small part of this value and that the eventual impact of the work will prove positive and lasting. Thank you to the Taimako family, the staff, and their partners for a fantastic year!
No matter what you do or where you work, if you are spending someone else’s money, eventually, they are going to ask you what the hell you are doing with it, how effective you have been, and what you have been able to accomplish. This need for accountability and documentation is, however, only one part of the much larger picture usually referred to by the conjunctive phrase: monitoring and evaluation (M&E). Having not worked in the social sciences or studied development in school, my eyes have been opened to this fascinating and convoluted world of M&E, [sometimes also called Planning, Monitoring, Evaluation and Learning (PMEL)], over the past year.
Though the idea of planning your work, making sure it is on track, evaluating the relative success or failure and trying to learn from the experience has been around forever, the M&E requirements of development projects have been turned into an art form. There are elaborate methodologies, old school tricks of the trade, hot new frameworks and cutting edge research papers being published on the topic monthly. Careers are being made and lost trying to prove what works and what does not, NGOs are pouring more of their budgets into checking all the latest and greatest boxes, and every few years there’s a renewed push by the major multilateral agencies and governments to “get M&E right this time”.
Despite all this, there still seems to be an air of general dissatisfaction with our collective ability to find out what works, make sure it happens, and to reproduce it somewhere else. There is also the frustrating realization that we may never be able to measure all the complex and nuanced subtleties that are inherent of change in human systems. Moreover, it may be that these unmeasurable changes are the most powerful and important, yet remain outside of our reach of understanding and reproducibility. As an always on point Albert Einstein noted, “Not everything that can be counted counts, and not everything that counts can be counted.”
There is also a growing feeling, within the development world, that we need to stop looking at issues like diseases and poverty as linear effects stemming from directly linked causes. The so-called “systems approach”, which is the antithesis of this, has been gaining steam over the past decade. In this approach, the sum is greater than the individual parts, the relationships are just as important as the players, and everything is at once linked and constantly evolving. While this is a far more accurate representation of the complex, emergent, human systems found in development, it throws a bit of a wrench into the whole M&E thing. How do you know where you are going when you can’t see where you have been? How do you measure the change you intended to create, when everything is changing all the time? How do you learn from one instance of a system when those exact conditions are likely never to exist again? These issues are crucial across the board in development and social change projects. Within the impact investing world, where BDSA works and I find myself, M&E is where the rubber meets the road and is at the crux of proving the central concept that businesses can be drivers of positive social change.
Monitoring: The systematic & continuous assessment of the progress of a piece of work over time, which checks that things are ‘going to plan’ and enables adjustments to be made in a logical way.
Evaluation: The periodic assessment of the relevance, performance, efficiency, and impact of a piece of work with regards to its stated objectives.
The history of M&E begins several decades back, when the rigour of scientific studies and evidence based results began filtering over to the social sciences and government. Within a few more decades, these ideas had made their way into the development context and had been sufficiently evolved to the point where it became almost impossible to do a project without applying a logical framework (logfram) or Results Based Management (RBM) tool. In the former, the project planner (usually on-high, in an air conditioned office far, far away), lays out the overall intended outcome of the desired change. He or she then works backward to determine the measurable outputs or metrics that would indicate the outcome has been achieved, the activities needed to produce these outputs and finally the inputs needed for each activity. At the end of the project the impact of the work is determined by subtracting the counterfactual (i.e. what would have happened if no intervention had been made) from the outcome.
This approach works great in the sciences where experiments can be carefully controlled, economies of scale allow for statistically valid results, and where causes can be closely linked with effects. In the real world of development, these conditions are rarely met, and the logfram approach leaves you with a decent planning tool, but a horribly rigid and impractical measurement and change management tool.
So, development project implementers find themselves in a bit of a bind: on one hand, they need rigour and accountability, and on the other they need flexibility and constant adaptation to a rapidly evolving reality. They need to be able to prove their interventions were effective, substantiate the attribution of the results to their donors (i.e. determine the counterfactual), and be relatively confident that these results are reproducible and sustainable (i.e. the project continues on, as designed). This drives an excessive focus on donor accountability; an obsession with control, causation, and attribution; and an overall rigidness and inflexibility that is more of a hindrance than a help. To say nothing of the fact that the beneficiaries/victims of these projects (i.e. the poor) are often cut out completely from the planning, evaluating and learning process and are left scratching their heads when the NGO declares the completion of yet another successful project.
In order to counter some of the obvious short comings of the traditional Results Based Management (RBM) approach, various tools, frameworks and approaches have been introduced over the years. Most of these attempt to capture the qualitative aspects of projects through questionnaires, interviews, stories and through participatory, beneficiary-driven planning and evaluation. They also attempt to design for, or at least acknowledge, the complex, emergent nature of the systems of which they are a part and to weigh the needs of the beneficiaries above those of the donors. And while there is no silver bullet or one-size-fits-all approach that is going to work everywhere, a mix of these different tools and approaches is helping to breakdown the orthodoxy of the purely quantitative result.
Here are a few key trends in M&E that have been getting attention lately and some sources on where to find more information. For a great overview of all these recent trends and others, see this paper.
Developmental Evaluation– This approach is basically an attempt to reduce the feedback cycle between learning, doing and correcting to almost zero. By collecting data in real time and making decisions based on a constant feedback cycle, the theory is that the project can adapt and evolve in conjunction with the system, thereby avoiding the need for major course corrections down the line.
Shared Measurement – In this case, common metrics are used across organizations on “scalable platforms” in order to facilitate the sharing and discussion of results and learnings on a much greater scale. It also helps organizations share responsibility for their data collection and learning.
Big Data – As the name suggests, this approach is based on the assumption that if some data is good, lots and lots of it must be better. Using short feedback cycles, real-time digital data from a variety of sources (such as website traffic, twitter, blogs, phone records, etc.), and data visualizations and infographics, it is hoped macro-trends and insights will emerge.
Problem Driven Iterative Adaptation – The PDIA approach is based on four key principles: First, focusing on solving locally nominated and defined problems in performance (as opposed to transplanting pre- conceived and packaged best practice solutions). Second, it seeks to create an authorizing environment for decision-making that encourages positive deviance and experimentation (as opposed to designing projects and programs and then requiring agents to implement them exactly as designed). Third, it embeds this experimentation in tight feedback loops that facilitate rapid experiential learning. Fourth, it actively engages broad sets of agents to ensure that reforms are viable, legitimate, relevant and supportable.
QUalitative Impact Protocol – Qualitative information is often hard to communicate between stakeholders, even though it provides rich and relevant learning. The QUIP approach is an attempt to get qualitative data taken seriously by collecting it in a systematic and structured way.
Most Significant Change – MSC is a story based approach to help identify the causes of a significant/critical change (positive or negative) relating to key objectives, rather than looking for trends related to a certain phenomenon. This makes it easier to track stories of changes related to less easily quantifiable issues such as “capacity building” or “gender equality”.
Here is a brief look at a few more:
Even with all of these tools and techniques being simultaneously developed, piloted and perfected. There is still much to be done in changing the development system itself. Here are a few recommendations for the future:
First and foremost, there needs to be much greater trust between donors and implementers and a lot more freedom given to experiment, adapt and learn. By far the biggest hurdle standing in the way of creative solutions to poverty reduction is that donors don’t trust implementers with their money, and implementers don’t trust donors with their program designs.
Donors , implementers, beneficiaries and other stakeholders need to come together to create spaces for innovation, seed the soil for new ideas, and embrace the failure of some projects in the name of a better overall result.
Agreement on the big picture problem definition or mission is necessary between stakeholders. This shared understanding should then serve as the organising principle when adapting activities and plans to ensure that practitioners are beholden to the ultimate mission, rather than the activities themselves.
Direct attribution of an impact is neither possible nor desirable in a complex adaptive system. The need for implementers and NGOs to clearly attribute how their work created a specific change should never take precedence over achieving the highest quality and most impactful aggregate change in the overall system. If implementers were able to put as much effort into achieving absolute results, as they do into competing for and seeking credit, everyone would benefit.
Finally, we need to give up the obsession with finding a be-all and end-all, silver bullet solution to our M&E needs. There will never be one perfect technique, just lots of little imperfect ones and the goal should be to continuously inch them forward.
So what is this all about, and why should you care? Well, whether you are a rural farmer in Ghana, a student in the UK, or a hospital patient in Canada, your life is probably significantly affected by the type of M&E performed by the organization with whom you are interacting. It may be that your story is being left out, or that numbers are not accurately capturing the whole reality, or that the information and accounting needs of the donor/government are being put above the learning and adapting needs of the organization serving you. Or, it may be that people working in these organizations are not taking (or being given) enough time to adequately learn and reflect on their work due to outside pressures to reduce overhead and produce results. Whatever the case, if we can continue to push for a more holistic, systems-based, human centered monitoring and evaluation, we will at least have the chance to correct some of the major issues with the status quo and put ourselves on the path towards a better world.
Andrews, Prichett, and Woolcock. “Escaping Capability Traps through Problem Driven Iterative Adaptation (PDIA).” June 2012. Working Paper No 240. Center for International Development. Harvard University.
Probably the most repeated and well-known success story coming out of Africa over the past decade has been the explosion of cell phones and Information Communication Technologies (ICT). This is usually cited as a prime example of “technology leapfrogging”, i.e. adopting state-of-the-art technology directly instead of going through all the iterative steps pioneered by others. Having worked a fair bit in the telecom industry in Canada (mainly setting up rooftop sites around Vancouver), I am very interest in the details of this story. Digging beneath the effusive excitement and “technologism”, I’d like understand how it all started and who actually controls and benefits from this huge industry.
Without a doubt, cell phones, internet connectivity and instant communications are a big deal here in Ghana–as is the case pretty much everywhere. With a population of just over 24 million, the country has upwards of 25 million cellular lines in use and a penetration rate clearing 100%. Not everyone has a phone to be sure, but it’s also not uncommon to see people juggling two or three phones and many more SIM cards at the same time. Even with this many phones and a population coverage rate of over 80%, there are still about 5 million people left in the digital dark. Most of the 5,583 base tower sites are grid connected and therefore not exceptionally rural. Of the 11% that are off-grid, only about 2% are fed by green energy, (the rest rely on 24×7 diesel generator power), so they are unlikely to be considered “economic” by their private sector operators. Driving along the main roads out of Tamale, brightly lit, modern cell phone towers stand side-by-side with un-electrified, traditional mud-and-stick huts without any acknowledged incongruence.
According to the World Bank, telecommunications is one of the main economic sectors of Ghana behind agriculture and natural resources and is slated to grow rapidly. The state-owned company RLG Electronics actually assembles a fair number of cell phones and tablets in Ghana, but like everywhere the bulk of the handsets come from assembling points across Asia. The cellphone towers themselves typically consist of a metal scaffold, microwave repeater dish and three 120deg azimuth RF (radio frequency) antennas broadcasting at range of up to 50kms. These towers can be erected and operational in a matter of weeks and the standardization and volume has dropped prices drastically in the past decade. Companies such as Helios Towers Africa have been doing record business slamming tens of thousands of these sites in across the continent (I am not sure if NIMBY-ism is given much consideration here). The data and equipment cabinets at ground level house the servers, switches and other equipment used to pick up, redirect, handoff, slice, dice and ship out your voice and data information along with hundreds of other peoples’ every few milliseconds. Most of this equipment, from my experience in Canada, was coming from the big telecom hardware companies such as Ericsson, Siemens, Alcaltel and Cisco. The typical business model in telecom is to “unbundle” the hardware business from the software side, i.e. these hardware companies build and maintain the infrastructure while the telecom providers operate the networks.
So who actually owns these “soft assets” and who is making the money from them? Below is a list of the five main telecom network operators in Ghana and their origins:
MTN – (45.43% market share, 12 million subscribers) This South African Telecom giant is the largest in Africa and operates in 22 countries. Annual revenues in 2011 were $9.4 billion.
Vodafone – (21.19% market share, 5.5 million subscribers). The Ghanaian branch is majority owned by Vodacom Group South Africa which in turn is owned by UK-based Vodafone (the third largest provider in the world). Revenues for Vodacom in 2011 were $7.7 billion.
Tigo (Millicom) – (13.89% market share, 3.7 million subscribers). Millicom is a Luxembourg based provider that mainly operates in the emerging markets of Africa and Latin America. Annual revenues for Millicom in 2012 were $5.1 billion.
Airtel – (12.79% market share, 3.4 million subscribers). Part of the Indian company Bharti-Airtel, this is the world’s second largest provider (behind only China Mobile) and operates in 20 countries mainly in Africa. Annual revenues for Bharti-Airtel as a whole are $8.2 billion.
Glo Mobile – (6.08% market share, 1.6 million subscribers). Headquartered in Lagos, Nigeria; Globacom is one of the newest providers to set up shop in West Africa. They are also the first African company to lay their own 9,800km, $800 million submarine fibre-optic cable from the UK to Nigeria in 2009. Revenue figures were not found.
There is one other provider, Expresso, but I haven’t been able to tell if it’s still operational in Ghana. The bottom-line being that there are a lot of hands in the very big African telecom pie and behind all the branding and “localization” a lot of the money from this major industry is ending up in foreign lands. Like a lot of industries, it seems information on revenues and ownership is hidden behind layers of subsidiaries, licensees, endless mergers and acquisitions, and byzantine corporate structures, so you’re never too sure what you’re buying.
I currently have SIM cards for all of the above providers plus two phones and have been experimenting to find reliable service since I arrived. Reports from people who have lived here for more than a few years seem to agree that the reliability and “choice” of providers has made amazing improvements from the early days of the single public-owned provider, Telecom Ghana. Still, when I pick up my weekly GHC 10.00 ($5) of phone credit from Gemina, the young women who assiduously attends her credit sales box on the street corner near my house for 8-10 hours a day, 6 days a week, I can’t help but think the 5% profit she is making on the sale is a part of the story that is missing from the dazzling successes that are often reported about Africa’s telecom explosion.
[For another perspective on the topic, check out the always perceptive Belinda in Malawi]
[This is the first part of a much longer post about what I am involved with here in Ghana. Hopefully, it’s informative and not too long-winded! Again these are my opinions and ideas, not representative of any larger group. Next post I’ll have some pictures and more exciting stuff from my trip to Mole National Park this weekend.]
The world of aid and international development has been in a state of constant flux and commotion since the concept was invented near the end of the Second World War. The idea, namely, that a country or group of countries espoused to have “development” can pack it up and ship it out to places that are determined to need it, has proven extremely resilient and captivating despite an eye-popping history of failure, waste, and incompetence. The reasons why this area has been constantly picked apart, reorganized and reimagined are many, but some of the more important ones include the startling complexity of actually making this idea work, and the fact that everyone seems to have a different opinion about how to approach the issues or their own pet projects and ideas. This seems to lead, invariably, to a constant flow of development trends and fashions that rise and fall like the prices of their silver bullet point solutions.
I won’t attempt to cover the history of international development here, nor am I any sort of expert on the topic, but there have been countless books written, hands wrung, eyebrows furrowed and knickers knotted about what it is, why what happened in the past did not work and what new ideas would make it better. Part of what fascinates me about this subject, is the multiplicity, dichotomy and contradiction of ideas involved and the fact that, despite the hard work of thousands of passionate people, the billions of dollars thrown at it over the decades, and the intellectual brain juices that have been squeezed into it, it is still hard to call international development a success with a straight face.
Trying to force development on a country or group of people seems to me akin to trying to make a tree healthy by air dropping soil, water and fertilizer on it, giving it periodic blasts of CO2 and UV radiation and showing it pictures of how other trees have grown. The tree already knows how to grow, in fact it has been around for quite a while already, what’s needed more than anything is a healthy environment, time to grow, and the removal of unfair barriers that are holding it back. Instead of poking and prodding it like a well-meaning but clumsy toddler with pudgy fingers, a better approach might be to begin with cleaning up the polluted air and water around it, removing the rocks impeding its roots, and maybe even trimming back some of the overgrown branches of the surrounding successful trees so that a little more sunlight can shine through.
Do not get me wrong, despite my delight in naysaying and cynicism, there have been many positive results, successful projects, and lives changed for the better. And, I wouldn’t be passionately interested and actively participating in this work currently if it was just a voyeuristic car-crash watching pastime that was beyond redemption. What I see is humanity struggling up against the boundaries of extreme complexity and coming to terms with its own deeply embedded systems that we shape and that shape us. Our collective ability to overcome massive hurdles from human rights and justice to poverty and development to climate change and global warming hinges on our being able to work with this complexity and each other.
Development is an answer no one was looking for to a question that still hasn’t been understood correctly. Still, the world keeps on spinning and the logical reductionism that says every problem must have a solution continues to hold fast. The current iteration of this thinking finds us in the early 21st century having gone through the massive infrastructure projects of the 60s and 70s, the structural adjustments fiascos of the 80s, and the micro-finance explosion of the 90s, (among other trends). Arriving at the present day with a new set of buzzwords and theories with names like “impact investing”, “development impact bonds”, and “enterprise philanthropy”, we are once again just at the cusp of a new breakthrough solution.
Impact Investing is loosely the area of development in which I am working and is a relatively new trend, (or a rehashing of old ideas depending on your perspective). It falls under the larger umbrella of social finance which is an attempt to apply some of the successful approaches of business to the world’s social and environmental problems.
The core tenets of this approach are as follows:
1) Business and capitalism have been massively successful and efficient at getting things done in many places in the world, and small businesses in particular are where a huge amount of the product and services we all rely on come from.
2) “Historically, regulation – and to a lesser extent, philanthropy – was an attempt to minimize the negative social consequences of business activities. But there is a history of individual investors using socially responsible investing to express their values, usually by avoiding investments in specific companies or activities with negative effects.” (Wikipedia)
3) “It’s going to take far more money than all the philanthropies and governments have at their disposal to make a significant impact on improving the lives of all the poor and vulnerable people in the world…Impact investing – which helps address social and/or environmental problems while also turning a profit – could unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges” (The Rockefeller Foundation)
4) “Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances.” (The GIIN)
5) “At scale, an impact investing industry could allow for a renewable and sustainable form of financing for an endless array of initiatives, from poverty alleviation and affordable housing, to natural resource conservation, and even clean infrastructure projects.” (RBC)
This approach builds on the ideas of micro-finance, i.e. that money and credit make the world go ‘round and that by keeping these flowing freely people and businesses will be better able to bootstrap their way out of poverty. Impact Investing also adds in elements from the venture capital and investment worlds with tools and concepts like “portfolios”, “asset classes”, “investment due diligence”, and “payback periods”. It also attempts to improve upon them by adding requirements for “social and environmental impact” as part of the terms of the agreements.
The quantifying of social and environmental impacts, both positive and negative, has been notoriously difficult (or conveniently ignored?) in traditional capitalism and these effects are usually grouped under the term “externalities”. Part of what social finance attempts to do is build a framework on which to compare and measure the externalities created by businesses. By standardizing these measurements, the extent or existence of social and environmental impact can be determined and thereby “re-internalized” back into the core operations of the business. One such framework is the IRIS metrics created by the GIIN (Global Impact Investing Network) another is an assessment prepared by the B-Lab (Benefit Corp) and ANDE (Aspen Network for Development Entrepreneurs) which allows businesses to benchmark their activities and approaches to see how and where they might improve. This approach is still in its infancy, but I think it has enormous potential to create change as long as the right companies sign up for it.
Additionally, I see several other very positive things about this approach:
1) Impact investing seems to be more equally applicable to both the developed and developing worlds. Unlike microfinance, which doesn’t find much of a niche in the developed world, Impact investing could conceivably be applied equally well to an agricultural initiative in Canada, or a housing project in Brazil. This might lead to us being a lot more fair and honest about what is working and what isn’t when it is in our backyard as well as someone else’s.
2) Small and medium-sized businesses are not going away any time soon, and these entities meet many of the needs of society in a relatively efficient and fair way. (Large or multinational businesses beholden to shareholders are quite a different story). Giving these smaller players access to capital so that they can play their part in meeting these needs seems beneficial.
3) Money makes the world go ‘round and it makes sense that if you want to have a profound and highly leveraged impact on the way the world works, you would go after businesses and the way the financial and economic world works.
4) Impact investing is also helping challenge the core tenet of business, (that is, to make money at all costs), and is changing the conversation about what role business should play in society.
5) As an investor myself, I’m very concerned about where and with whom my money is sleeping at night. Right now the choices for maintaining your values with your savings include storing them under your bed, investing in the typical mutual fund mixed bag of stocks and bonds, or maybe trying “socially responsible investing” which provides only a negative screen for the very worse companies. Having the option of putting my money somewhere that at least has the chance to do some active good, is very appealing.
Despite the potential, there are still many kinks to work out with the impact investing approach and questions left to answer. Here are a few to get you thinking:
1) There appear to be few ways that fundamentally meet the needs of the poorest people that will generate any sort of return on investment. Healthcare, infrastructure, education are generally not regarded as money-making opportunities (though they can be) and as such are often highly subsidized by the government as examples of “common goods”. A corollary to this is do you really want to be making a profit off of a poor person’s healthcare or housing, and if so how much is acceptable?
2) A lot of the major social issues that cause or are linked to poverty stem from existing government and/or market failures that require expensive and slow processes such as research and development, behavioural change, building a market, and maintaining ongoing services. The time frame for these sorts of processes is far slower than the 3-5 year horizon of most investments.
3) What level of risk is acceptable for non-financial returns? If your stock investment loses 10%, the effects are fairly obvious. If your social impact investment in a housing project falls through, on the other hand, it could mean someone no longer has a place to live.
4) Where did all this investment money come from in the first place? How did foundations like Bill and Melinda Gates or Rockefeller get their investment capital? And how might Impact Investing challenge or reinforce the already gross inequalities of wealth, power and privilege that exist in our world?
5) Is it possible to maintain an objective, apolitical stance when dealing with social and environmental issues and values? Or is impact investing even purporting to be apolitical?
6) How is all this investment and growth tied-in with the bounded ecological resources of the earth? Is it possible that all these new businesses will be able to operate in harmony with themselves, let alone with the planet?
Hopefully, your curiosity has been peaked about impact investing. Whether you see it as repackaged western imperialism, coached in the language of business and buttressed with pseudoscientific jargon, or as an extremely practical way to create change with a huge potential for worldwide impact, or somewhere in between, you’ll agree it is a very important topic. You will most definitely be hearing more about Impact Investing in the coming years so it’s important to be aware of it and start thinking critically about what is going on. What I am excited about is being involved with it from the early stages to see how rapidly and effectively we can test and iterate through all the bad ideas, before hopefully arriving at something positive. At this stage, I am equally concerned and hopeful, but there is still a lot to learn and explore.
In the next post in this series I’ll discuss how EWB Canada, ostensibly a group of practical engineers, ended up getting involved in this area and what we hope to achieve. Finally, in the last installment I’ll get into the details of the work I’m doing in Ghana and how it connects back to the big picture.