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Hope, and doubt, south of Sahara

The view on sub-Saharan Africa is changing. No longer do stories of tribal wars, starving children and endemic diseases dominate the updates from the region. A new, more hopeful and optimistic picture is emerging; a reality of solid GDP-growth, more widely practiced reasonably free and fair elections, and a wealth of natural resources that range from oil and gas to diamonds and rare minerals.

Everywhere people talk about sub-Saharan Africa as a great investment opportunity. Indeed, money, venture capitalists and entrepreneurs pour into the region to grab a share of its seemingly endless potential.

One of 36,000 M-Pesa agents in Kenya
One of 36,000 M-Pesa agents in Kenya

There are mind-blowing commercial success stories like the one of Kenya’s M-Pesa, also referred to as Africa’s “mobile money revolution”M-Pesa allows people to make monetary transactions using only their mobile phone, no bank account, and this has revolutionalised the lives of many. In fact, around 20% of the country’s GDP moves through M-Pesa, with over $20 million per day in transactions.

Things are definitely changing for the better and many of the countries south of Sahara hold great potential. Yet, there is a reason to be cautiously optimistic. Africa is rising, but there will still be quite a while before she can walk. Just because many countries are becoming richer, it does not necessarily mean that everyone is better off.

Monica, widow and mother of four, earns $1/day from working in a government quarry, Kiserian, Kenya
Monica, widow and mother of four, earns $1/day from working in a government quarry, Kiserian, Kenya

From the time I have spent in the region, primarily in Rwanda but also whilst travelling through Kenya, Uganda and Malawi, meeting thousands of people from different backgrounds and parts of society, there are, in my humble opinion, three main challenges that needs attention and focus from the countries' leadership to support a successful development of the region. 

It is important to note that these challenges should not be generalized across all of Africa. The continent has 55 countries, all with different leadership challenges and business climates, not only obvious extremes like Mali and South Africa but also in neighbouring countries like Zimbabwe and Zambia. 

1)   Corruption and its impact on youth

Many countries in sub-Saharan Africa, like Kenya, Uganda, Burundi and Nigeria, are still among the most corrupt in the world. Needless to say, this stifles growth and creates huge, systemic inefficiency. This is a well-known problem, and every organisation involved in the region has to decide how to play this game.

Less is said about how this leadership style affects the youth, or the next generation of leaders in those countries. Many of the young Africans I have met are obsessed with the thought of money, and how they can get more of it. In their view, money equals happiness. You hear stories about Nigerian girls who break up with their boyfriends because he can’t afford to buy her the right smartphone.

Uhuru Kenyatta, president of Kenya. Net worth of $500 million
Uhuru Kenyatta, president of Kenya. Net worth of $500 million

Their role models, people of authority or celebrities, all drive around in the most luxurious cars, enjoy entertainment accounts vastly exceeding the salary of a New York investment banker, and live in houses larger than university buildings. Every day you can read in the newspaper about the latest corruption scandal (at least there is freedom of speech!) and people just shrug and laugh. They are powerless.

It is clear that many citizens do not believe in, nor respect, the country’s leadership. This tone from the top creates a mentality where people only look after themselves, and act in ways that only benefit them. As people progress on the career ladder, they carry this mindset, creating a vicious circle.

Responsible leadership exists to benefit others. Until these countries get this right, sustainable growth and development in the name of all African people will remain challenging.

2)   The challenge of distribution channels and networks

A clever solar lamp solution for people living off the grid
A clever solar lamp solution for people living off the grid

Many entrepreneurs, some of them Kiva partners like Nuru Energy, have developed incredibly clever products that meet the needs of the poorest people in Africa. Solar lamps, water purifiers and mosquito nets, to name a few. Designed to improve the lives of the vulnerable and offered at competitive prices. Surprisingly enough, in Rwanda, where 85% of the population lives off the electricity grid (8.5 million people), only approx. 200.000 people own a solar lamp. How can this be?

Reaching the customers can be incredibly challenging. Once the entrepreneur has managed to work her way through the government levels to obtain the necessary licenses to sell her product in the country, finding the customers can be ever so difficult.

Even my house, located in central Kigali, does not have an address. The street I live on does not even have a name. To send a post card from Sweden to Kigali can take up to three months. Then imagine how difficult it is to locate a potential customer, living in a rural village, somewhere in a forest, perhaps two hours off the beaten track. There is no such thing as GPS or even a traditional map.

Peruth and her family lives without water or electricity. Her business is making beer of corn or banana.
Peruth and her family lives in a village so small it does not even have a name. The family lives without water or electricity. Her business is making beer of sorghum, corn or banana.

I went to visit Peruth, a borrower of Kiva-partner Urwego Opportunity International; her house was located a three hour mototaxi ride off the main road. Finding her house took 15 phone calls and for her husband to come and meet me halfway on his bike to guide the motodriver and me to the house. I now realize why the micro-financing organisations sometimes charge relatively high interest rates for their loans. In addition to the default risk, the administrative burden of paying weekly visits to your customers to collect repayments is enormous.

Bike on a dirt road - still the most common means of transportation for most people
Bike on a dirt road - still the most common means of transportation for most people

Investing more in infrastructure is key, enabling products and services to effectively reach the vast majority of the people, still living far away from urban areas. Building roads and connecting people to electricity and water grids will literally lay the foundation for future growth.

3)   Empower the youth through job creation

Young people aged between 15 and 25 represent more than 60% of the region’s total population. Unlike other developing regions, sub-Saharan Africa’s population is becoming more youthful, with youth projected to be over 75% of total population by 2015.

Youth in the Dandora slum, Nairobi, hoping for a bright future
Youth in the Dandora slum, Nairobi, would love a job but can't get one

More than 50% of youth are still illiterate, and approx. 20% is unemployed. There are simply not enough jobs, and even worse, many young people have little or no skills and are therefore largely excluded from productive economic and social life. 

Grace, her sister and their friend Christopher are school drop-outs and have started a grocery store in their local village but competition is tough
Grace, her sister and their friend Christopher are school drop-outs and thanks to receiving a loan they have been able to start a grocery store in their local village in Salime district, Malawi

Obviously the region needs to create an attractive environment for trade and investment, supporting companies and creating opportunities for growth, but it is also important to realise that the responsibility to prepare youth for employability and a working life also sits with the schools.

I visited a secondary school students in Salima, on the shores of Lake Malawi. When asking them about their hopes and dreams for the future, 80% of the girls ambitiously said they wanted to be nurses or lawyers, and the majority of the boys dreamt of becoming journalists or doctors. When I asked one of the boys what he was good at in school that would make him a successful journalist, his answer was not English (as I had expected) but chemistry. Unfortunately, there is a material disconnect between what the children hope for and what the harsh reality actually looks like. At this time in Malawi, there were two jobs available for journalists in the entire country.

Secondary school students in Malawi discuss entrepreneurship ideas
Secondary school students in Malawi discuss entrepreneurship ideas

The schools have to take greater responsibility in preparing the students for a working life, guiding them in choosing a realistic and effective career path and teaching them the basic entrepreneurship principles and vocational skills required to start their own businesses, in case they don’t reach their dream positions.

Leaders are not people who sit around and wait. More investment is required in fostering responsible leadership amongst youth. Until the private and public sectors have caught up, much more can be done in preparing the youth at an early life for a life as a successful entrepreneur. 

"If we are to bring lastingpeace and sustainabledevelopment to thecontinent, we mustempower Africa's youth"United Nations Deputy Secretary-General, Asha Rose Migiro
"If we are to bring lasting peace and sustainable development to the continent, we must empower Africa's youth"            United Nations Deputy Secretary-General, Asha Rose Migiro

Once the leaders south of Sahara have figured out how to deal with these challenges - I too believe that unprecedented prosperity for the region can be within reach.

About the author

Louise Ronnerdahl

Louise grew up in Stockholm, Sweden, and studied International Business at the University of Stockholm. From a young age she has been a passionate traveller and was always keen on living abroad. The majority of her professional career since graduation has been in management consulting and investment banking in the City of London, helping different clients to respond to unprecedented challenges and delivering sustainable transformation with global remit. Inspired by the global conversation on sustainability and the role of corporate leaders, Louise decided to leave London to support this agenda at its roots in the developing world. Based in Nairobi, Louise has leveraged her experience of strategic change to help nations generate youth employment and responsible leaders by teaching leadership and entrepreneurship to vulnerable communities across Sub-Saharan Africa. Louise now aspires to pursue an international MBA as a springboard into social entrepreneurship and is very excited about the practical experience and knowledge that she will be able to acquire as a Kiva Fellow.