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Traditional prescriptions
for growth in Africa
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are not working very well.
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After one trillion dollars
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in African development-related aid
in the last 60 years,
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real per capita income today
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is lower than it was in the 1970s.
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Aid is not doing too well.
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In response,
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the Bretton Woods institutions,
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-- the IMF, and the World Bank --
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pushed for free trade not aid,
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yet the historical record
shows little empirical evidence
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that free trade leads to economic growth.
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The newly prescribed silver bullet
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is microcredit.
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We seem to be fixated
on this romanticized idea
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that every poor peasant in Africa
is an entrepreneur.
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(Laughter)
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Yet my work and travel
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in 40-plus country across Africa
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has taught me that most people
want jobs instead.
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My solution: forget micro-entreprenteurs.
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Let's invest in building
pan-African titans
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like Sudanese businessman Mo Ibrahim.
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Mo took a contrarian bet on Africa when
he founded Celtel International in 1998
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and built it into
a mobile cellular provider
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with 24 million subscribers
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across 14 African countries by 2004.
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The Mo model might be better
than the everyman entrepreneur model,
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which prevents an effective means
of diffusion and knowledge-sharing.
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Perhaps we are not at a stage in Africa
where many actors and small enterprises
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leads to growth through competition.
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Consider these two alternative scenarios.
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One, you loan 200 dollars
to each of 500 banana farmers
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allowing them to dry their surplus bananas
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and fetch 15 percent more revenues
at the local market.
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Or two, you give 100,000 dollars
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to one savvy entrepreneur
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and help her set up a factory
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that yields 40 percent additional income
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to all 500 banana farmers
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and creates 50 additional jobs.
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We invested in the second scenario,
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and backed 26-year old
Kenyan entrepreneur Eric Muthomi
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to set up an agro-processing
factory called Stawi
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to produce gluten-free banana-based flour
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and baby food.
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Stawi is leveraging economies of scale
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and using modern manufacturing processes
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to create value for not only its owners
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but its workers, who have
an ownership in the business.
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Our dream is to take an Eric Muthomi
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and try to help him become a Mo Ibrahim,
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which requires skill, financing,
local and global partnerships,
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and extraordinary perseverance.
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But why pan-African?
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The scramble for Africa
during the Berlin Conference of 1884,
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-- where, quite frankly, we Africans
were not exactly consulted
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(Laughter) (Applause) --
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resulted in massive fragmentation
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and many sovereignty states
with small populations:
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Liberia, 4 million, Cape Verde, 500,000.
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But Africa gives you one billion people,
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granted across 55 countries
with trade barriers and other impediments,
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but our ancestors traded
across the continent
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before Europeans drew lines around us.
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The pan-African opportunities
outweigh the challenges,
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and that's why we're expanding
Stawi's markets from just Kenya
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to Algeria, Nigeria, Ghana,
and anywhere else that will buy our food.
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We hope to help solve food security,
empower farmers, create jobs,
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develop the local economy,
and we hope to become rich in the process.
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While it's not the sexiest approach,
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and maybe it doesn't
achieve the same feel good
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as giving a woman $100 to buy
a goats on [??],
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perhaps supporting fewer,
higher-impact entrepreneurs
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to build massive businesses
that scale pan-Africa
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can help change this.
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The political freedom
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for which our forebears fought
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is meaningless without economic freedom.
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We hope to aid this fight
for economic freedom
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by building world-class businesses,
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creating indigenous wealth,
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providing jobs that we
so desperately need,
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and hopefully helping achieve this.
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Africa shall rise.
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Thank you.
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(Applause)
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Moderator: So Sangu, of course,
this is strong rhetoric.
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You're making 100% contrast
between microcredit
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and regular investment
and growing regular investment.
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Do you think there is
a role for microcredit at all?
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Sangu Delle: I think there is a role.
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Microcredit has been a great,
innovative way
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to expand financial access
to the bottom of the pyramid.
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But for the problems we face in Africa,
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when we are looking
at the Marshall Plan
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to revitalize war-torn Europe,
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it was not full of donations of sheep.
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We need more than just micro-credit.
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We need more than just give 200 dollars.
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We need to build big businesses,
and we need jobs.
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Moderator: Very good. Thank you so much.
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(Applause)