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  • Traditional prescriptions for growth in Africa are not working very well.

  • After one trillion dollars in African development-related aid in the last 60 years,

  • real per capita income today is lower than it was in the 1970s.

  • Aid is not doing too well.

  • In response, the Bretton Woods institutions -- the IMF and the World Bank pushed for free trade not aid,

  • yet the historical record shows little empirical evidence that free trade leads to economic growth.

  • The newly prescribed silver bullet is microcredit.

  • We seem to be fixated on this romanticized idea that every poor peasant in Africa is an entrepreneur.

  • (Laughter)

  • Yet my work and travel in 40-plus countries across Africa have taught me that most people want jobs instead.

  • My solution: Forget micro-entrepreneurs.

  • Let's invest in building pan-African titans like Sudanese businessman Mo Ibrahim.

  • Mo took a contrarian bet on Africa when he founded Celtel International in '98 and built it into a mobile cellular provider with 24 million subscribers across 14 African countries by 2004.

  • The Mo model might be better than the everyman entrepreneur model, which prevents an effective means of diffusion and knowledge-sharing.

  • Perhaps we are not at a stage in Africa where many actors and small enterprises leads to growth through competition.

  • Consider these two alternative scenarios.

  • One: You loan 200 dollars to each of 500 banana farmers, allowing them to dry their surplus bananas and fetch 15 percent more revenue at the local market.

  • Or two: You give 100,000 dollars to one savvy entrepreneur and help her set up a factory that yields 40 percent additional income to all 500 banana farmers and creates 50 additional jobs.

  • We invested in the second scenario, and backed 26-year-old Kenyan entrepreneur Eric Muthomi to set up an agro-processing factory called Stawi to produce gluten-free banana-based flour and baby food.

  • Stawi is leveraging economies of scale and using modern manufacturing processes to create value for not only its owners but its workers, who have an ownership in the business.

  • Our dream is to take an Eric Muthomi and try to help him become a Mo Ibrahim,

  • which requires skill, financing, local and global partnerships, and extraordinary perseverance.

  • But why pan-African?

  • The scramble for Africa during the Berlin Conference of 1884 --

  • where, quite frankly, we Africans were not exactly consulted,

  • (Laughter) (Applause)

  • resulted in massive fragmentation and many sovereign states with small populations:

  • Liberia, four million; Cape Verde, 500,000.

  • Pan-Africa gives you one billion people, granted across 55 countries with trade barriers and other impediments, but our ancestors traded across the continent before Europeans drew lines around us.

  • The pan-African opportunities outweigh the challenges, and that's why we're expanding Stawi's markets from just Kenya to Algeria, Nigeria, Ghana, and anywhere else that will buy our food.

  • We hope to help solve food security, empower farmers, create jobs, develop the local economy, and we hope to become rich in the process.

  • While it's not the sexiest approach, and maybe it doesn't achieve the same feel-good as giving a woman 100 dollars to buy a goat on kiva.org,

  • perhaps supporting fewer, higher-impact entrepreneurs to build massive businesses that scale pan-Africa can help change this.

  • The political freedom for which our forebears fought is meaningless without economic freedom.

  • We hope to aid this fight for economic freedom by building world-class businesses, creating indigenous wealth, providing jobs that we so desperately need, and hopefully helping achieve this.

  • Africa shall rise.

  • Thank you.

  • (Applause)

  • Tom Rielly: So Sangu, of course, this is strong rhetoric.

  • You're making 100 percent contrast between microcredit and regular investment and growing regular investment.

  • Do you think there is a role for microcredit at all?

  • Sangu Delle: I think there is a role.

  • Microcredit has been a great, innovative way to expand financial access to the bottom of the pyramid.

  • But for the problems we face in Africa, when we are looking at the Marshall Plan to revitalize war-torn Europe, it was not full of donations of sheep.

  • We need more than just microcredit.

  • We need more than just give 200 dollars.

  • We need to build big businesses, and we need jobs.

  • Tom Rielly: Very good. Thank you so much.

  • (Applause)

Traditional prescriptions for growth in Africa are not working very well.

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B1 US TED africa pan african entrepreneur aid

【TED】Sangu Delle: In praise of macro finance in Africa

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    大佑 posted on 2021/07/28
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