Does Rwanda's impressive growth tell the whole story? (Credit: CIAT, Flickr Creative Commons)
Over the last few years, a lot of optimism has been built around Rwanda being the next big thing in Africa. I guess one reason for this optimism is Rwanda’s impressive list of business friendly reforms and its equally impressive growth performance. Between 2006 and 2011, per capita income in Rwanda grew at an average rate of 5.1 percent per annum, fifth highest in Sub-Saharan Africa (SSA) region and much better than the regional average rate of 2.4 percent. Moreover, Rwanda currently ranks third in the region in the quality of the business environment as measured by the World Bank Group’s Ease of Doing Business index. So, is Rwanda really the next big thing in Africa?
“You have a good social project, but it is not an investable company”, I heard fellow judge and technology activist Mariéme Jamme say to a South African entrepreneur who had just given his best business pitch. He was taking part in the Dragons’ Den at the 5th Global Forum on Innovation and Technology Entrepreneurship, a fantastic 3-day learning and networking event organized by the World Bank’s infoDev and the South African Department of Science and Technology. You could see the entrepreneur (let’s call him ‘B.’) gasping for air, and one could hear a pin drop in the completely filled auditorium of the Global Forum. Over 800 people, mostly entrepreneurs, financiers, policy makers and technology ‘evangelists’ from all over the world had gathered here.
Business reforms can spur economic dynamism in the East African Community
East Africa is famous for its breathtaking landscapes and its unique concentration of wild animals. Could it also become as famous for its dynamic economic development?
In 2009 I came to Tanzania to work on tax harmonization in the East African Community (EAC). The Common Market Protocol was about to be signed and one of the biggest goals was to tap into the economic potential of the region by facilitating (cross-border) trade and improving the business climate. A year later, the five Partner States of the East African Community ratified the Common Market Protocol in order to realize “accelerated economic growth and development through the attainment of the free movement of goods, persons, labor, the rights of establishment and residence and the free movement of services and capital”. The overarching goal of the East African Community is to achieve sustainable economic growth in order to increase employment and reduce poverty.
How are emerging market entrepreneurs leveraging technology and changing development paradigms? Why are the rewards of funding innovative new ventures in emerging economies worth the risks, and what makes these investments succeed? How can investors, policy makers, and the private sector in general help find and groom transformative high-growth enterprises?
Liberia's new AML/CFT law is a step towards good governance in a country looking to the future (Credit: Kenneth Harper, Flickr Creative Commons)
On May 2nd, the President of Liberia signed into law a long anticipated bill to counter money laundering and terrorism financing (AML/CFT). The new Act, which included amendments to various other laws, will provide more effective legislative tools with which to fight corruption, money laundering and other financial crimes. The new Act will provide the legal basis to establish a Financial Intelligence Unit as the central coordinating agency in these efforts, provide better tools for authorities to seize and freeze the proceeds of crime, and improve cooperation in information- sharing and investigations. It will also require financial institutions and other entities often used to launder proceeds of crime, to identify and report suspicious transactions to authorities.
Growth poles can help create jobs for Africa's one billion citizens (Credit: World Bank)
We were asked the other day by our senior management to be outrageously aspirational when we engage with growth poles. I have been reflecting on what this means for our work on this topic in Africa, especially in light of the findings of the Africa Competitiveness Report. I think we need to be aspirational in three broad directions: (i) developing the capacity to get things done in Africa, (ii) ensuring all stakeholders benefit from growth, and (iii) mobilizing as much capital as we can, whether it be private, philanthropic or public.
While it’s International Women’s Day tomorrow, many of us at infoDev are trying every day to make women, specifically women innovators, central to our strategy of supporting high-growth entrepreneurs in developing countries. But this is easier said than done as women are notoriously under-represented in tech-related industries and even more so in the area that I work in – clean technology – which is largely manufacturing and therefore male, dominated.
I recently attended one of the largest renewable energy forums in the Caribbean attracting investors, experts and entrepreneurs from around the region. As I looked around the room, I spotted only a handful of women. And this is not an isolated case. I see this scenario play out whenever I meet climate and clean energy entrepreneurs at events like this around the world.
Note: This blog post is adapted from a much longer discussion by the author under the same title that was published at Tekedia on January 7, 2013. You can read that blog post here. Small sections of this article are identical to segments of the original article.
The problem in brief
Africa is experiencing a boom in entrepreneurship due to proliferating Internet and mobile computing technologies. Simultaneously African startups face the often life-threatening impediment of inadequate access to seed and early stage venture capital. Fortunately, a number of developments in other parts of the world point to the contours of an approach to solving that problem in a manner that necessarily starts out small, but that can eventually be scaled in a meaningful way.
Migrant workers, earning money in jobs far from home, sent more than $400 billion to their families back home in 2012. Such remittances remain a vital source of income for millions of people in developing countries: Food, housing, education, health care and more are paid for every day by workers who earn money abroad. Through a simple and repetitive transaction – sending money home – those workers are really sending heart-warming feelings like hope for a better future and love of family.
The poor cannot afford to pay money for health care so they use mainly free government-run health services. Isn't that what you were always told? So if donors want to help the poor they should give their money to governments that provide such services for the poor. I am sure you have read that in many books and articles.
Wait, let’s run that scene once more in real time. What actually happens out there in the real world? Often the government clinics described above have difficulty hiring staff, especially in poor rural areas. The majority of young health workers prefer to live in urban areas where they feel safer and can bring up their children with good schools, near family and friends. Long wait times and lack of medicines at government-run health facilities make the private health sector more attractive to consumers.