All I Want? Just Some Damn Eggs!

I see a lot of people trying to solve payment problems based on their assumptions not their own reality.

I have been ill and grounded at home and this morning I ran out of damn eggs! I also ran out of local cash as well and I have 3 options to solve this damn problem!

1. Give my housekeeper some US Dollars to go change to Ghana Cedis then buy the damn eggs!

2. Go get some cash from the ATM to get the damn eggs! Only problem is that the nearest ATM at East Legon is a StanChart ATM which accepts only Visa cards. So to do that, I have to transfer money from one account to another then get a driver from the office to take me there so I can get cash. Other option is drive to Spintex to use my Mastercard on the only ATM (from Stanbic Bank) that accepts all cards to buy the damn eggs!

3. Do a transfer from my bank account to my housekeeper's mobile wallet so she can goto the corner shop at here East Legon to just buy the damn eggs! That is assuming that the retailer accepts payments from all mobile wallets. I could also have just used my card at a cheap POS or NFC enabled phone with the retailer to just buy the damn eggs!

The third option seems the easiest way to buy the damn eggs! but right now it does not exist! It is fairy tales or science fiction........but wait!!! Is this is what I am supposed to be doing for a living? Solving payment problems.....If I cant solve my own personal payment problems how can I solve the problems of others??

This is a real problem and not the problems of some imaginary people doing imaginary remittances to some other imaginary people. It is not about imaginary agents doing cash-ins and cash-outs for imaginary customers.

I have decided to give myself a challenge to work towards. I have decided that that between now and December, every wallet in Ghana will be interoperable with every bank account and every merchant or corner shop will have an app on a phone that can make people just buy the damn eggs!

Interoperability between bank accounts and all wallets is the only way cash can be fought. It is all about linking stores of value with each other simple. Nobody cares about cash-lite, cash-heavy or cash-low and cash-high all they want to do is just pay for some damn thing!

 

My boss just saw what I wrote here and he says I should describe my situation simply as a situation of being at home and broke. I told him that being broke is a temporary state, which can always be alleviated by efficient links between stores of value.

 

We are tired of this never-ending story of how financial inclusion will save all of Africa from eternal damnation and bring us all to paradise. All we really need is just not to be broke most of the time and be able to buy something with what we have got. It is a simple problem with people trying to provide unnecessarily complex solutions. My boss calls electronic cash “witchcraft money”, my answer to him is that even if it requires "witchcraft" to do this it must be done.

 

For now I just have to bear the pain to get some cash to buy the damn eggs!

"Show Me The Mobile Money" - Alternative Models For Financing African Tech.

Everyone celebrates the rich man in Africa but very few will like to follow the path he took to get there. Very few rich men also reveal how they got there and they perpetuate the myth of “good luck” or “good fortune” or just plain “hard work”.

My big brother and mentor Austin Osuide posted recently:

“Structured Serendipity”:

“Successful people regularly put themselves in positions — by studying, relentlessly working, pursuing the truth — where they encounter luck.”

According to another friend on Facebook: “Opportunity does not always wear scarlet robes”.

We have probably heard it all before so then why do we still have very few celebrated successes and many hidden failures? I think failure persists because those who have overcome the odds quickly forget how difficult it was for them and how many more will take that path and make the same mistakes.

Do our own “rich men” do this on purpose to create barriers to that exclusive club? Amaete Umanah reminded me yesterday of “Think and Grow Rich” a book by Napoleon Hill written many years ago and which I agree with him is the “source” of all the other motivational books we see today. How many Africans have written similar books?

A lot of people will tell you (including myself and I am not a rich man…yet) that it was hard and difficult but very few again try to create a platform to make it easy for others to be like them. It is very easy to assume that the beggar on the roadside is lazy (maybe some are) when you have never been in a situation where you are pushed to the wall and have no choices left.

A lot of us have been there and it was rough. It is sometimes still rough but experience somehow gives us the tools to cope with the unexpected and makes us to plan for the expected. Experience is a hard teacher; its pupils don’t graduate alive.

Experience has taught us as tech entrepreneurs in Africa that very few if any understand what we are trying to do. They know we are doing some “smart stuff” but mainly see it as a hobby and are pleasantly surprised if you make any money from it. They don’t see it as serious business for serious people.

While your family may support you, they will still not understand why a smart person like you is wasting their intelligence and talent trying to suffer instead of going to get “a good job”. Why didn’t he use his/or her Engineering /Science/Business degree to work with Shell or Chevron instead of all this “pie in the sky” ideas and dreams? We become outliers, some are branded “stupid people”. After a while, a lot of techies really believe they can’t make it this way and give up. Those who persist and succeed become the darlings of those same family members and friends who had taunted them in the past and wanted them to give up.

I come from a relatively successful extended family and I have been an outlier in this family, the dark horse that does not conform. Even though family members have been very supportive, there are times their patience have been tested severely and they had to speak their mind. I remember coming back from Sheffield in 2006 to my 18 Year Old BMW 535i (Bella Bavaria! My first love which I still own till today) and realized after an embarrassing incident that in Lagos I needed a newer and reliable car.

I was going to work one morning and one of the wheels (thanks to the ingenuity of Lagos mechanics) decided that it did not want to be part of the car anymore. This was Monday Morning on Lekki Expressway in Lagos right in front of the current Addax building. I blocked the road for close to an hour and it was one of the most embarrassing experiences in my life. I decided that morning that it was time to get a new car.

I looked at all my options and realized that the best way to avoid the “Lagos Mechanic” was to buy a brand new car. I was however wrong in that assumption but that is a different story. To buy a car in Lagos you either have all the cash or you get a lease. Most people just save to buy the car because the conditions for getting the lease were too stringent and the interest rate was too high. Luckily for me I was working from my Uncle’s office and he had a relationship with a bank that leased all the cars he was using for his business. I decided to go under this umbrella to get one but the bank needed him to sign as a guarantor to the loan.

My uncle is a trained accountant; I always had to discuss anything business with him showing figures and projections. I took my spreadsheet and I met with him, he gave me another one of the most embarrassing moments in my life. He asked if was really successful at what I was doing if after 2 Masters degrees I could not buy a brand new car outright? I tried to explain that I was trying not to tie up cash because my business needed funding. I was trying to convince him with my projections and business plan. He then simply told me to go look at my business model again and review my funding strategy. He also said a lot of things I can’t repeat out here about my foolishness but basically I got the message.

I got the loan and paid it up in 18 months. The car is still in the business and now used by one of my colleagues. A lot of people who would have seen me then driving a new car then would have thought that I just went to England, came back with a degree, made plenty of money and was rolling in dough. A lot of them also would have thought, “he has a rich uncle and his uncle bought him the car”. They would not realize that we had to pay salaries and the car lease leaving about 100 dollars for the founders monthly. I went without a salary for 6 months after I got the car. How I survived is also for another blog post.

Getting that loan also exposed me to the problems small business owners and entrepreneurs face in Africa while trying to get funding from family and traditional banking institutions. First I was not qualified for the loan without my uncle’s intervention because I did not meet the bank’s risk acceptance criteria. We had some income and we had contracts to prove it but the problem was that the income was not regular. Those we worked for only paid us when they felt like it or if we were “nice” to them.

All the things mentioned in the picture above are very true for the African entrepreneur but the last one is the most painful. We always have to beg to be paid because the clients think they are doing us a “favour” and supporting our “hobby”. Tech entrepreneurs are blackmailed into bribery and corruption because the clients know that they are really struggling. I remember a client threatening me once that he could call a white man to do this and job if I did not play ball. I didn’t play ball and reported him. Doing that gave me my first big break and it was a “White African” Mr. John Whitechurch, (MBE) who made that happen. I am forever grateful to him.

I was thinking recently about why failure persists with tech ventures in Africa and why those who are still determined to remain never scale. I realized that while funding is an important ingredient for this we might have been going about it the wrong way. We talk about seed funds and the new phenomenon of accelerators, hubs and co-working places all borrowed from Silicon Valley but we forget that we are still Africans in an African society with its own unique culture and pressures. Good education in Africa is not cheap and those who have struggled to gain the right knowledge and skills know that it is an investment by their family from which they justifiably expect immediate returns.

While we try to grow a community and ape Silicon Valley models, we must also realize that a lot of the people who end up becoming the stars have had to go through the grind and our cultural realities to get there. A lot of people who could have done even greater things get discouraged and give up because family and friends get tired of supporting them. Jason Njoku of Iroko mentioned recently that he went through a lot of failed startups before his friend in England funded him. We all don’t have rich uncles or wealthy friends who believe in us but we now have each other.

Someone mentioned to me recently that a lot of so-called successful older technology companies in Nigeria and Africa are largely fronts for corrupt insiders. The insiders give the contracts to their own companies at inflated prices and that is how real money is made. I have seen enough of this nonsense going on to know that there is a lot of truth in it. That is the current model of financing technology companies in Nigeria and most of Africa. Banks know that these things happen and know that most who “succeed” do so because of “patronage” and corruption so it is hard to take the sector seriously. If your entire business model is based on “knowing someone inside” then it is a risky venture and I don’t blame the banks.

How do we then solve this problem without copying SV models foolishly and only finding out years later that we are have not moved forward? I think it lies in a different approach. Techies are intelligent people and why don’t we prove that we are more intelligent than the bankers and the corrupt insiders?

Why don’t we build self-sustaining communities and specialized financial institutions to support those communities? Financial institutions who really understand the risks we face as techies in Africa and know how to mitigate them. A “VC” or “Angel” is still a “capitalist” and they are there for their own gain. While most pretend that they are interested in growing the tech community, they are only sowing seeds in the rough hoping that some will germinate so that they come for the harvest. They will easily go elsewhere if they don’t see returns soon enough and are not there for the long haul.

I read from GrowVC an article titled Do All Startups Need VC Or Angel InvestmentsFirst of all, it’s not necessary that all startups need large funding or have to raise large chunks of money from the word “go”! Startups need just enough money to sustain and grow. If a business model is self-sustaining why would you need big capital from an external source? In fact, self sustainable startups are the blue eyed boys in the eyes of both the investor, as well as the customer community”

The customer community in Africa needs these startups to survive, as the demand for services is almost insatiable. There are many more problems in Africa for tech to solve but where are the techies? Some never make it out of the door while others give up and end up working for those same people who capitalize on “insider deals” to grow.

The VCs and Tech funds in Silicon Valley also use specialized financial models that were developed for that community and that industry. Those models take cognizance of the ecosystem and culture. It is worthy to note that US is 22% of world GDP but 47% of global equity market capitalization. Almost half of the world’s market capitalization is in the United States. It is a “market driven economy” but others are “value driven”. Market capitalization does not mean profits but signify faith in potential and belief in models, which sometimes are hyped.

We can’t afford hype yet in Africa as the customer community still craves for service. Specialized financing models for African technology do not only help the tech startup community to grow but also help Africa to develop as well. We have specialized financial institutions for agriculture and commerce why not new ones for technology?

Mobile Money is an invention of the technology community and it has changed the lives of millions of Africans but the tech community has hardly used this technology to help finance itself. Why do we still depend on traditional banking institutions and family when we can create models that can finance and sustain us?

We say we are clever but we are really not. If we were clever there won’t be many bodies in the street, many hopes unfulfilled and many startups that never scale. Cars are not our problem any more but housing is. I told my colleagues recently that I am not in this “thing” to pay rent anymore but to buy houses and they agree. To buy houses the same problem of funding is still there. The mortgage finance companies don’t understand our business model and my uncle cant help me on this one this time.

We need to show that we are truly smarter than the rest of the crowd and help ourselves. We need to develop new models to ensure sustainability and not hype. My bet is on specialized Micro Finance institutions for tech ventures (similar to those for Agriculture) which we can also use as a basis for crowdsourced funding. We need all your ideas to make this work and create a greater Africa and not just many attempted Silicon Valley clones.

Invictus

 Out of the night that covers me,

Black as the Pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find, me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul. 

 William Ernest Henley

The “Unreasonable New African"

"The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man" - George Bernard Shaw.

I have realised that there are different types of Africans but only one type can move Africa forward. There are "Old Africans" and there are "New Africans", then there are "New Unreasonable Africans" Being a New African is a different state of mind but being "Unreasonable" is even more progressive. It does not matter where you are born or raised; it is an addiction to the continent. Africa grows on you and it is very addictive.

Of these different types of Africans there are those who see opportunities the greater continent presents and those who never see beyond their borders, they whip up nationalist sentiments and get fellow xenophobes out of their closets. Xenophobia is the worst form of inferiority complex and is the last bastion of lazy intellectual African scum a term I learned recently from this article

With over 700 comments so far, the debate is lively and it is one of the biggest wake-up calls in recent times to those of us who call ourselves “Africans”

Thabo Mbeki’s speech on being African is one I never tire to hear over and over again. It was the theme Multichoice used when they started spreading all around Africa. Multichoice like most successful South African companies saw the value in being an African company first before being South African.

MTN is another truly African company (full disclosure they feed me) and they changed their slogan to “Everywhere You Go” once they started their African expansion in earnest. They are in every part of Africa especially those areas where others have not been bold enough to go. The strategy worked for them and they are now one of the largest companies in Africa and the clear leader in telecommunications. MTN is an "Unreasonable African Company"

What is it about South African technology companies that make them get Africa while others don’t?  I think it is because after Apartheid, Nelson Mandela unleashed a whole bunch of new Africans on the continent. A group of People who realized the joys of being “African” first before they belong to any nation, tribe or race. "The Unreasonable New African"

Google is another company that has adopted the African identity comprehensively. They too  have started going everywhere the Old African has failed to go and will become the leaders in African technology if they arent already. Google Africa is an "Unreasonable African Venture"

Afrinnova is another "Unreasonable African Venture", we believe in an Africa powered by all types Africans and those who love Africa enough to become "Unreasonable Africans". We believe in Africa and its potentials, we believe in Africa powering The World eventually and not begging from it.

The old African clings to the past but the new African looks to the future.

The old African builds race, ethnic and tribal barriers but the new African is tribe and colour blind, they accept all as brothers or sisters.

The old African recognizes colonial borders and thinks in terms of them but the new African knows no borders

The old African moans and complains when the new African walks in to eat their breakfast, lunch and dinner. The new African may or may not have been born in Africa, Africa grows on you and it is addictive.

For us to have sustainable progress in Africa, we need more "Unreasonable New Africans". Become one today!

The Walking Dead? – Banks And The Future Of African Payments

I recently attended the last AITEC Banking and Mobile Money West Africa conference held this time at Accra. The more I attend Mobile Money events in Africa, the more I am convinced that there needs to be an Open Source Payments/Mobile Money initiative. It seems to me that there are no real patents in this space as everyone reinvents the wheel and calls it a “new product”. Somehow the standards are being created as threshold requirements emerge. Core competences amongst the players are rapidly becoming threshold features as they all try to outdo each other.

Everyone claims to be able to do everything, it seems vendors are all hauling dung on the wall and seeing what will stick. I personally believe that if you have a good business case and a sensible model, you will not require all the bells and whistles at once. The competition is however great for setting standards.

One fundamental problem is that most mobile payments technology vendors claim to have the best product since sliced bread and very few admit failures or shortcomings. Even those experienced players who apparently get it and know where we should go, promoting "open loop" platforms are actually pushing for a "bigger closed loop" according to Tamara Cook from Bill & Melinda Gates Foundation in response to a Visa/Fundamo presentation.

The Visa presentation was a departure from those of the others as it made quite clear the awesome plans Visa has later this year with Visa Prepaid. But the overall most presenters from vendors were always quick to point out the wonderful features of their products. It became boring after a while when it started to all look like a pitching hall. There were few gems from the rough however and some brilliant insights were provided.

For me, the best presentation was from Peter Ollikainen (a hard last name to pronounce. I call him Ollie) formerly of Nokia Money who was brutally honest about mistakes made and lessons learnt from the Indian experiment. There was another great one by a gentleman from Unibank in charge of new channels that explained very clearly most of the shortcomings of the Mobile Money experiment in West Africa.

West Africans still ape the models in East Africa without thinking of developing unique models of their own. We want to fight cash and at the same time we dream of financial inclusion. While both can be achieved at the same time, they require significant intellectual investment as well as other resources to make it work in West Africa. Nigeria seemed to generate quite some interest as usual and there were a few presenters speaking on our Cashless experiment and the initiatives around it. I had a lively debate with Mac Atasie of Nextzon about their agent aggregation platform OneNetwork.

A clear distinction has to be made between Agents and Merchant roles in the Cashless initiative. In normal Mobile Money models, Mobile Money “Agents” are “merchants of cash” as their trade is in cash and commissions just like the black market Mallams, while “Merchants” are those who least need the headache of cash in the value chain.

An interesting portion of Peter “Ollie’s” presentation was titled “Activation is different from Keeping Active” The connection between the two is the link between the agents and merchants, which is the value chain. While Agents are trained to perform KYC and can do document handling etc, Merchants typically can’t and should not do it as becomes an unnecessary burden to them. There are many reasons why activity dips and there are ways you can also strive to get the numbers up. He sent me the presentation afterwards and I can’t wait to have a proper chat with him soon. What I got from Peter’s presentation was that success in Mobile Money and payments was much more about building the ecosystem and activities around it than about any product or feature.

There are many reasons why MM platforms never reach scale and level of activity is the key metric that shows penetration and acceptance. I believe strongly that “Acceptance” and widespread use starts from the merchants and the agents. When fighting against cash, acceptance and activity is more important than “activation”. While Agents are absolutely essential to activation, their role in keeping active will diminish as broader acceptance happens and the ecosystem gets enough float to move towards reduced cash transactions

My point to Mac Atasie was that “Agent activities and building up a wide agent network should become the responsibility of the MFIs in their consortium while others concentrate on on-boarding merchants. He mentioned that cash would still play a long term role as merchant acceptance is still a long way off but these were the first steps. While I agreed with him that there was still a big battle against cash I don’t think the question of who comes first in building an ecosystem “Merchants or Agents” should be a “chicken or egg” riddle. It should rather be about two chickens or two eggs. Building both must happen at the same time and are not mutually exclusive. The “Merchants” are more valuable in sustaining activity while “Agents” drive activation. MFIs as licenced merchants of cash with their grassroots reach should and must lead this effort to actually grow the numbers.

Mac also mentioned something interesting, he said that while there were several bank issued cards out there, we have 100,000 Point of sale terminals in Lagos alone but with less than 10% of them active. Another presenter showed some “not so great insight” about financial inclusion efforts. Banks in Africa have not really grown their customer base in absolute numbers after 10 years. They have had the same number of customers for 10 years and there has been no real growth in customer numbers industry wide. People die and are being replaced while banks cannibalize other banks’/competitor’s customers to grow. There was really no net growth in the industry and that means all growth in profits have been from the same sectors and the usual suspects. In Nigeria for instance, lending to the public sector (including purchase of treasury bills) accounts for most of the banks' profits.

Telecommunication companies have grown from almost zero numbers in 10 years in a place like Nigeria to over 100 million and yet they are strangely being excluded from financial inclusion efforts by the regulators. Telecommunication companies achieved this growth because they introduced new products and created new value chains. For banking to grow and financial inclusion to happen it has to follow the same path as well. New products have to be introduced and new value chains created.

I see the future of banking in Africa and it will be driven by MFIs. Telcos and probably “Open Loop” and “Open Source” platforms. MPesa has scaled, MTN Uganda has scaled but no single bank in Africa has shown similar growth numbers. It is worthy to note that the economic problems of the West emanate from the banking sector and I think we will be foolish to allow ourselves go on a similar path. A prominent player in the industry Sola Fanowopo asked why Telcos were not present at the AITEC event and not invited? And there was a hushed silence. Probably the silence from the realization that banks are in denial and not coming to terms with reality.

Banks have to adapt, lead or get off the bus on this. They can’t hold African economies to ransom forever. MPesa and MTN Uganda were the beginning. It will come to all of Africa. Being propped up by regulators and government when you are not really growing is like being the walking dead. Africa especially West Africa needs growth and not a “zombie apocalypse”

"Clear and Present Danger!"

 

 

Earlier this year, I wrote a post titled “Why Ghana is the best location for an African Startup Accelerator” in response to an article by Sarah Lacy on Pandodaily.

That post generated a lot of interesting responses a lot of which I failed to understand as I saw this as obvious. Before we decided to start Afrinnova in Accra we looked at all possible locations including Nigeria, which is where I was born and grew up.

Nigeria definitely has the market, plenty of entrepreneurs but lacks infrastructure and other basic things for a startup community to thrive. In summary, the RISKS in Nigeria far outweigh the benefits.

Ghana’s proximity to that market and all other great features made it the best possible location to support our vision and I am glad Mike Butcher also validated this in his recent TechCrunch post.

Although Mike Butcher’s post as he admitted was still early stage work, in closing he made two points, which were: 

1. “The consensus on the ground amongst seasoned AfricaTech watchers is that while Nigeria has the fastest growing economy it’s also pretty dangerous at the moment

2. “Ghana is quickly gaining a reputation because of its relatively stable business and political environment and the English language is widespread. It’s also becoming a big airline hub because airlines prefer not to drop their staff into potentially dangerous countries.”

His emphasis on “Danger” in association with Nigeria has as expected sparked a lot of backlash in social media by my fellow compatriots. Even the Kenyans want to know the “issues” he alluded to about them as well.

My take is that the problem in Nigeria is not just the obvious “Danger” which those from outside see but the hidden “risks” that the “danger” compounds.

I reposted an article by Chris Dixon about “founders risk” where he listed all the different types of risk that startup founders assume. I added a comment there:  

“I think you forgot to mention "reputation bias risk".  Peculiar to African startups

It occurs when you are fighting an uphill battle where some people brand a certain nation or region as bad. Can a payments/collections service or product from Nigeria ever scale globally? I doubt it.”

Mark Essien also added a detailed list of African/Nigerian related risks listed below:

1. Bandwagon effect: Many African startups are too focused on very visible spaces, because of a lack of knowledge about more obscure things. E.g, a blog/media is very visible because many people read it, but controlling software for IO on machines is much less visible and needs specialist knowledge. So there is excessive competition for highly visible spaces and very little competition on things that are just as profitable, but not as in-your-face

2. Not exporting: Many African startups are too focused on selling locally. It's very easy to export software, and nobody needs to know where the makers of the software are in. And frankly, most buyers don't care one bit where it is located, if it fulfills their needs. E.g, when I was actively selling my mpeg encoder, there were only 3 software encoders on the market and I used my Nigerian address for the sales. Nobody cared, because the software fulfilled their needs and there are little competition.

3. Logistics: There is no logistics structure in Nigeria. Startups need to properly allocate cash for logistics issues, and increase their prices appropriately

4. Bad eggs creating patterns: People invest based off patterns. If many Nigerian startups who take investment fail or mismanage funds, then the amount of investment that will be available for Nigerian startups will drastically sink

5. Grants: Many Nigerian startups, once they reach a certain level, will have the possibility for many types of developments grants a.k.a, free money. Free money destroys companies in many cases. The companies lose their competitive edge and stop improving, but still have enough money to keep upstarts out of the market.

6. Founders spreading thin: Most Nigerian business-men like to have a finger in many different pies. Real Estate, supermarkets, filling stations, hotels, etc. Startup founders will not be any different.

7. Timing: Nigerian market is in different stages of development. Your particular product may be too early.

These risks mark listed above are real and present daily. The “Clear and Present Danger” to building a viable startup community in Nigeria is “Nigerians” and not “Bravo Hotel”, MEND, kidnappers etc. Those other factors compound the risk and they are not the main problems themselves.

For me I think that the risks can be mitigated by awareness and major paradigm shift in mindset. The problems in Nigeria should be seen as challenges to overcome them rather than limiting factors, but one cannot rule out the fact that one startup or a few individuals gathered in a co-working space cannot solve them all by themselves. Nigerians are known for being realists and for once lets put all the sentiments aside and find what really works. 

My bet is still on Ghana as the savior of not only the startup community in Nigeria but Africa as a whole but Ghanaians also need a paradigm shift in mindset as well. My wife is Ghanaian (I am now too) and I have lived there now for almost half a decade so I know when to call a spade a spade. Ghanaians cannot demand the impossible from those coming there to do things and grow the economy when there is no will to do it by themselves. 

I have always avoided stereotypes but I have seen enough now to know that there is a real work ethic and “entitlement” problem in Ghana that will also kill most entrepreneurial initiatives. You cannot drive employment of Ghanaians when the people are not ready to work or don’t have the right skills or mindset. Ghanaians need examples and role models from outside to spur them on and not protection from imaginary invaders.

The government does not help too as they pay lip service to investment drive yet we have failed to get a Free zone license even when we bring in over 90% of our revenue into Ghana from other countries. That story is for another blog post. There is this latent form of xenophobia present and funny enough it is fired up mainly by non-Ghanaians from Asia and elsewhere who see the other Africans coming to learn of Africa’s best kept secret as a threat to them.

Kwame Nkrumah ranks with Nelson Mandela amongst the greatest Africans of all time and his vision was a greater Africa led by Ghana and not a smaller or closed Ghana. Had he been alive today, East Africa, South Africa and others will be learning technology from Ghana and not vice versa. The potential is still there but the will or the exposure is lacking.

The world is coming to Ghana but “Ghanaians” themselves are the clear and present danger to the growth of technology in Africa.

Who are "The Unbanked"?

The image above is a picture taken of a Nigerian gate man/security guard's notes (let us call just him Koko) showing his savings with the target to buy Range Rover Sports SUV. It has been circulating in social media and some people found this funny but I didn’t.

 

I saw two things from this:

 

1. Koko is a very ambitious and religious person with a lot of determination but saving for the wrong asset and the wrong reasons. He needs proper financial advice.

 

2. He is unbanked and saving all the cash he makes from petty trading probably in his mattress.

 

It appears Koko is also a small time trader (as most of them are) and he does that to augment his meager income and to make daily savings. That means also that he is a small time "Merchant" with neighborhood customers he is familiar with.

 

Sandy is my domestic cook/caretaker in Accra and I made her open an account with Ecobank a couple of years ago to make my life easier. Now she is thankful that she has some real savings and is so thrilled that she can get proper statements from ECOBANK.

 

Many years ago, I had a high street office at Ikoyi in Lagos and went out for lunch at a fast food restaurant down the road. That afternoon I met the famous artist and painter Sam Ovraiti. I am a huge fan of African art and had a few of his famous watercolors so it was an honor to meet him so many years after.

 

He had a new business selling books, he was his own publisher, printer and salesman selling books from office to office all around Lagos. I asked him if business was good and he answered that it was phenomenal. I offered to buy him lunch and in return he offered me some free financial advice he learned from his books. One of the books he was selling was “The Richest Man in Babylon” by George S Clason

 

First, he said I should stop buying people free lunch because it was a habit guaranteed to make me poor. If I had to buy lunch, I had better make sure I get something in return and out of the kindness of his heart he will tell me a story to learn from. Next he asked me if I had any savings at all after I had finished paying for my fancy high street office? I tried to explain why we needed to have that office close to a major client and also because of the prestige it would bring. He asked me how much I saved daily? I told him I don’t save daily and he told me I was a foolish man. He said that he too used to be a foolish man until he had an experience that changed him after he turned 40.

 

 

He told me that he used to have a car that was more of a headache and burden than an asset. He struggled to keep it on the road as he tried to use it to move his paintings around to sell them. He could not afford new tires and constantly had to patch up his old worn out tires almost daily. Morufu the neighborhood vulcanizer always helped him to do this but he noticed that strangely the guy was never available for at least an hour at 10 am everyday.

 

One day he asked him where he always went to at that time and Morufu told him that his previous "master" who taught him all he knew also taught him to always save whatever he made for the first two hours everyday and never touch it. He always left promptly at 10 am to do just that. He took the money home.

 

Sam realized quickly that Morufu probably had a higher net worth than himself with all his education and fame. He also realized too that the car was no longer an asset because it did not bring him money in the first 2 hours of everyday but rather cost him money instead. Most of that money went to Morufu and his mattress.

 

He gave up his car, tried Morufu's approach and made sure he was doing something that could make him money the first two hours of the day so he could save the money. It worked for him so well that he reinvested the money he saved and built a new business. He is now a rich man and no longer a struggling artist.

 

Koko, Sandy and Morufu are the REAL unbanked and the people who should be the target of financial inclusion initiatives. They are at the bottom of the pyramid with dreams of being at the top someday. They have goals, they have dreams and they are the ones who really keep our African economies working.

 

One common thing with all these people including Sam is that the real need they have for a bank is to save and not all the fancy bells and whistles like Internet banking, SMS alerts or "Bill Payments". Those things are nice to have but the primary need is just to keep money safe somewhere until they need it. They can never get loans from banks and wont even bother to ask for them. Their source of finance is the support system they have built and revolving cooperative credit savings schemes like “Esusu” etc.

 

Some of the unbanked are entrepreneurial and others are not but the reason they save is that they want a better life than the one they currently have. That is where they can also do with some sound financial advice similar to what I got from Sam Ovraiti and from reading the book "The Richest Man in Babylon". That role is supposed to be played by Micro Finance Banks but those too have abandoned the “Finance” function in their names and also become “Merchants of Cash”.

 

Corruption and 419-fraud are slowly corrupting this base of the pyramid. Aspirations and ambitions like those of Koko are mainly because of what he sees around him as signs of affluence. He will not know that the cars he sees may be leased or that the owners are running away from the law or have defrauded banks or pension funds. He will also not know that it costs a fortune to keep them on the road yearly, all he sees is that there are people better than him and he will want to be like them either through doing what they do or saving to get what they have.

 

Honest aspirations and ambition are very important elements in the growth of economies and the more truly successful people we have as role models the better the society will be for it. Sadly honest successful people are becoming an endangered species in African countries like Nigeria. A businessman who approaches a bank for a loan to finance his business will quickly find that he also is truly “unbanked”.

 

Banks by nature are supposed to finance business but instead have become solely “merchants of cash” making commissions on cash turnover, risk assets and short term treasury investments instead of credit. If he does not get the full service from a bank and he is only charged for moving money in and out of banks, he is not just “under-banked”, he is worse off than the “unbanked”.

 

I gave up my high street office and started saving like the unbanked because I wont delude myself. 99% of us are unbanked in Africa and the 1% is other banks, government and fraudsters.

 

 

The Emperor Has No Users

I saw a quote this morning that got me thinking:

“It is better to be hated for what you are than loved for what you are not.”
― André Gide

I thought of Oo Nwoye's comment on the Digital Drift podcast on criticism. He said that he prefers honest criticism to fake praises. I almost gave him a virtual high five for that statement.

African techies have to leave the praise singing for the traditional praise singers and musicians as it serves no purpose in tech. Not one website or app in the world is powered by praise of sycophants but by honest users who have a need.

Seth Godin mentioned in his last blog post: "I don't take pitches to be on my blog, and no one can pay me to endorse them. I don't directly own private or public equity in companies I write about, except for Squidoo.com, which I founded, and use because I like what we built, not because I'm trying to persuade you to use it."

We need to develop a culture of giving and taking honest criticism for this young African tech ecosystem to grow and thrive. Brutal honesty is not hatred, it is "feedback". We must learn to take the good, the bad and the ugly as we mature.

African Payments 2.0

Sometimes I see the buzz about payments in Africa and I wonder if people study the Economics and Sociology of it and not the Technology. It is the intersection of all 3 that creates the magic. 

African Payments 2.0 will be driven by collaboration. Silos will not work. There are few new innovations under the sun that do not build on existing breakthroughs.

I have been against the "cookie cutter" model for payments for years and I believe new entrants should not only learn from the mistakes of the old but undertand that the successes of a few were also not overnight miracles.

It is not "Eastside" vs "Westside" conflict. it is not even a battle between vendors or egos that will matter. It is about understanding the basics and making it work.

Google launched Beba in Kenya recently and my guess is that those who did not heed the warning of Mastercard at Carte Afrique in Morroco that "Google is coming" have now seen a glimpse of the future.

Visa and Mastercard are here, Paypal and Square are also coming. Why then do we waste time fighting ourselves when we can join forces to take advantage of all the new bells and whistles to create what will really work? 

It has never been about the technology but how it is applied. The future will be driven by the ecosystem and not the players.

The Boy Who Harnessed The Internet

Strangely, I have been thinking all night about the supreme effort African techies put in to get results and have found new respect for people like Churchill Nanje Mambe who built Njorku.com with 18kbps Internet in Buea, Cameroon. He should have the same story as William Kamkwamba "The boy who harnessed the wind. Maybe he should now be named "The boy who harnessed the Internet".

Those in Nigeria fare under worse conditions as you have to battle with power, police, perception, Internet/infrastructure issues and even "home trouble" yet they do awesome stuff.

The narrative and focus should however change. Our efforts no matter how laudable should not be the focus but solutions to obstacles that have prevented many more Churchills from emerging.

Reading the book "Imagine" by Jonah Lehrer and watching his interview on Colbert Report has made me believe even more in the power of the community and collaboration. Innovation builds on innovation and not just obstacles. Silicon Valley became what it is mainly because people could build on each other's accomplishments and not on the general problems.

Pinterest builds on Facebook and Twitter, Instagram builds on Apple and Android now Facebook etc....

We need to collectively overcome obstacles to move from "Africa Awesome" to "World Class Awesome"

King of The Street

   

He probably left home before dawn and was the one of the few grateful that morning that the traffic build-up on the Kaneshi road started early.

He was struggling under the weight of the bag of plantain chips balanced precariously on his head while still somehow managing to scan both sides of the road to see where it would be best for him to pitch.

He did not go to any business school to spend hours learning about Quantitative Techniques or Proximate Value Pricing because he knows his product and his market well.

He knows that the lady struggling with two hungry kids in the “tro-tro” will probably need a snack to calm them down and he goes there to conclude his transaction briskly.

He moves to the other side of the road to a car full of foreign tourists to whom he will probably sell to at twice the price to make a quick tidy profit.

He stands briefly in front of my car with windows up and air-conditioning on. He is not very sure about this one but he tries to make eye contact anyway because for him it is all about eye contact.

He can read you from looking at your eyes and tell if you are hungry, irritated and frustrated or just indifferent. In a split second he can decide to make a pitch or walk away to a more promising prospect.

Our eyes meet and I keep looking at him with thoughts of the distant past racing through my head. He comes beside my car and I bow to him but he does not understand the gesture.

I bow to him because I know him very well. I was once him and one day he will be me. He now owns the street and the world is wide open for him to conquer

 

This is an old post I wrote on Google+ and iloveghana.org

Image is from the blog "Adventures of an imported Ghannaian" http://valerielabi.wordpress.com/