A US VIEW OF DIGITAL AFRICA’S PROSPECTS - AN OFF-THE-RECORD BRIEFING

24 May 2002

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Most of News Update’s coverage is firmly rooted in ICT events in the African continent. For this issue, we’ve taken time out to visit the USA to see how Africa looks from the other side of the Atlantic. America is the richest and most powerful nation on the planet and what it does will affect the state of Africa. It plays host to a whole range of bodies whose budgets and work will impact on the state of digital development on the continent.

 

Digital divide issues in general - and those of Africa in particular - have had almost unprecedented attention in America. They have engaged some of the sharpest minds in the US technology sector. But after all the euphoria and policy hoopla, things now stand at a crucial crossroads. This is what the Americans might call "a heads-up" for Africa and a lot hangs on getting things right. If the private sector individuals see their efforts fail to make an impact, then Africa will be back to being 5-10 minutes at the end of a long world sales meeting.

 

In the course of our US visit we talked to a wide range of individuals drawn from very different backgrounds. In order that you can hear and understand their views and perceptions as clearly as possible, this briefing is provided on an "off-the-record basis": no views or quotes are attributed.

 

Even for the well-informed American citizen who reads the foreign news pages of the broad-sheet newspapers like the New York Times and the Washington Post, Africa has not really made a great deal of an impression except for famine and human interest stories. As one technology consultant who has done work in Africa put it:"It is very much off the radar in the US. The success of the Indian software industry has made quite an impression but the only thing in Africa to register has been the success of cellphones."

 

There has been renewed interest recently in the continent because of the visit by Treasury Secretary Paul O’Neill and U2’s Bono. There is talk of a new US$10 billion Millennium Fund but congressional approval has not yet been obtained. But whilst this is seen as good news in Africa, O’Neill is widely seen (according to one Washington insider) as an "entertaining lightweight" who allows his tongue to run ahead of his brain in making public statements.

 

His comments about Ugandan water wells go to the heart of a fundamental misunderstanding between America and Africa (and the wider donor and NGO community). Private sector people (of whom O’Neill is one) frequently ask: what are the metrics? In other words what are the numbers? By this they mean how can you quantify the problem you’re trying to solve, what precisely are you going to do to solve it and why will it make a difference? Africans and the wider donor and NGO community tend to stress the complexity and intractability of the problems to be addressed: little surprise that they find it easy to sneer at what they see as the naivete of someone wanting to cut through complexity to find solutions. But as one NGO person deeply involved in Africa admitted ruefully:"40 years of capacity building and what have we got to show for it?"

 

O’Neill in a speech last week on his African visit at Washington’s Georgetown University stressed 3 priorities: education, water and health. He laid stress on the connection between aid, accountability and governance. However when pressed on the connection between this and American foreign policy implicitly admitted that "strategic partnerships" (as in the case of Pakistan) might override these principles.

 

This echoes a broader shift that will affect Africa. Before 9/11, it might have been possible to engage the Administration’s attention but now the prospects are much less promising. Time and again people said what one observer of Government put forcefully:"Africa’s a bloody serious problem but we’ve got others more pressing on our hands elsewhere".

 

The idea of using ICT in places like Africa has produced a wide-ranging consensus between the private sector, donors, foundations and NGOs. The idea of ICT as a tool for development and economic growth is widely accepted and understood. The difficulty has been turning this policy consensus into decisive funding and investment decisions. As one foundation person put it, there’s been a difficulty "productising" from this policy consensus: in other words how do you produce sustainable projects in either market or need terms? One private sector initiative has gone through all sorts of ideas but is finding it difficult to identify products or services that will make sense in commercial terms.

 

From the African perspective there is certain amount of suspicion of private sector involvement. Time and time again, we are asked: what’s in it for them?

 

There are three main reasons why individuals and companies in the technology sector in the US are interested in Africa:

 

* It represents an intellectual challenge: They are fascinated by the opportunity to see whether they can find solutions using technology and business savvy. They have the classic American "can do" attitude and relish the challenge. They have seen technology transform economies and lives in a different context and believe it might be possible to create this effect in Africa.

 

* It is enlightened self-interest: The mantra of "Smaller, cheaper, faster, better technology" means that it should reach a cost where emerging markets will begin to develop. One company is conscously looking to find a way of making sufficiently cheap devices that meet a need that will begin to create these new markets:"In a commercial sense, there’s a need for growth (in Africa) and there’s a market not being served." There’s also a growing acknowledgement that innovation may now come from the South as well as developed countries as they begin to make use of new technologies. There’s particular interest in wireless technologies which the USA has not really fully developed.

 

* There is a genuine, caring interest: There is a tradition of philanthropy and service in parts of US public life that for those elsewhere is sometimes hard to understand. For some, with wealth goes responsibility for others less fortunate.

 

But now the excitement of the early love affair between the tech sector and Africa is over and they are beginning to see the incompatibilities in the relationship.

 

One quoted a country in Africa where the government changed (through elections) and the present administration seems to be systematically tearing up all the contract commitments made by its predecessors:"This is not a basis for long-term external investment". They are are also appalled by the daunting obstacles of the African legal system for anything contractual or regulatory in business terms. African governments need to understand that they are still placing enormous obstacles in front of those wanting to invest: some of the recent telco privatisation processes are viewed as being particularly opaque.

 

They are beginning to see the difficulties of creating business ideas that will "scale-up" in a continent of small markets and very limited management cadres. Why do these business ideas need to scale-up? Because if you put money in you will need to be making investments on a sufficient scale to make adequate returns to justify your original investments. Therefore Africa is stuck in an unbearable double-bind: its ICT markets are too small to justify large-scale investment but without large-scale investment they have little or no chance of getting larger. What the US tech minds are trying to find is a pivotal key investment that will unlock other streams of growth in these markets.

 

All those we spoke to believed that the creation of more competition remains essential. There are many US tech and telco companies doing business in Africa but only a few are doing so in a ways that are helping to change the shape of the business environment by introducing new competition or extending services.

 

They have also begun to understand the difficulties of working in markets where government is such a large part of the environment and potentially one of the biggest customers. As you would expect, Government doesn’t behave with commercial instincts and it has simply too many priorities to be decisive about creating ICT strategies for change. African governments ought to be able to harness this private sector interest to attract external investment but all too often they treat external investors as if they were donors to be parted from their money. US tech people find this worrying and are unlikely to fall for it.

 

The policy consensus referred to above has been forged through a range of bodies that have brought governments, inter-governmerntal organisations, the private sector, NGOs and charitable foundations together: the G8 Dot Force (reaching the end of its time-limited existence), the UN ICT Task Force and the Markle Foundation’s Digital Opportunity Initiative being amongst the more significant.

 

For these great big policy leviathans, it’s the end of the beginning. They’ve agreed in broad terms where they’d like to go and the route forward has been mapped out. But it’s like a large plane has taken off but is now having difficulty finding places to land. As they start to "engage gears" at a country level, they are finding it harder to take next step to implementation. Sure, there’s no shortage of projects but how do you find those that will make the differences claimed in the much-trumpeted advocacy examples given in your analysis?

 

Americans use the expression "getting traction" to express the idea that something is actually beginning to be successful in market terms and the phrase recurred in several conversations. One of the confusions is that the NGO/donor sector (for all its talk about sustainability) is actually looking at social projects that have little or no chance of making profits as they meet social needs outside the market, whilst the private sector believes that in order to grow these markets you have to find things that will make a profit. There are occasionally projects that seem to have the potential to bridge this divide: they meet social needs but are capable of being offered at on or near market prices. We came across two; one involves health reporting and the other concerned with satellite communications for remote areas. There are probably more out there. That said, four consistent criteria for ICT projects come through from all sides: "Sustainability, replicability, scalability and affordability."

 

The UN ICT Task Force is bidding to inherit the mantle of the (shortly to finish) G8 Dot Force. It has no funding but is trying use the UN’s respected neutrality to act as a broker between projects and funders. In theory this should be a good role and they certainly "talk the talk".

 

However because it is a UN body it is unable to provide straighforward "leadership by ideas": it is not able to say to countries that there are things that will make you more successful. The more thoughtful senior personnel in inter-governmerntal organisations realise this and are somewhat frustrated. As one put it:"It’s necessity to show intellectual leadership in the process but there’s not much sign that’s happening."

 

There is no doubting the sincerity of UN ICT Task Force’s commitment but there are those that question its effectiveness. One person closely involved in the process told us:"Important private sector executives on the Task Force are pissed off and are talking of taking a walk". Put at its harshest, inter-governmental bodies want the money the private sector can bring but don’t want to give it any real influence either in ideas or policy terms.

 

The source of the private sector’s frustration is old-style UN behaviour - national interest lobbying, over-elaborate formal processes, bureaucratic time-scales and the issuing of lofty statements. They fear that the lack of emphasis on action is the disease, not the sympton. They feel there is a patronising attitude to private sector involvement, particularly in the context of the World Summit on the Information Society (WSIS). (see report on the African regional meeting in Bamako below). They want them to be involved but will not allow them to circulate papers spelling out their ideas to others involved.

 

Several people (from the private sector, NGOs and intergovernmental organisations) openly wondered what this long and convoluted process that will only finally conclude in 2005 will achieve. Cynics in the development community noted that this was only two years before the 2007 poverty targets are meant to be met, leaving not much time for "the information society" to actually make any impact on them. If this is really a democratic process (which we doubt) then it is not really very effective. As one private sector initiative executive commented:"They need to manage by objectives and do something more meaningful than simply issuing more damn proclamations." Put plainly, he means they have to define achievable objectives and indicate where the money is coming from to meet them.

 

Meanwhile all is not well with ICT initiatives in the NGO sector in the US. Two "new wave" digital divide organisations are in financial trouble from lack of funding and one with a major initiative in the making is financially stretched. Another merged with a long established organisation not so long ago because of the difficulties of fundraising as a new organisation. And yet another recently cut its staff by a third because of the downturn in charitable giving. The funding climate is currently not very favorable for new ICT initiatives according to one well-informed trust officer:"A combination of the dotcom bubble burtsing and 9/11 have meant that priorities have shifted in this country."

 

Nevertheless as with the private sector, there’s considerable interest in what lessons might be learned from new technologies in the African context:"There’s lots of people in rural America interested in experiments in wireless provision and eagerly awaiting to see how these initiatives play out in places like Africa."

 

The underlying problem is perhaps best summarised by one person with several years African experience under his belt in both consultancy and government:"Anything we have (in technology terms), you can get in Africa. There’s no chasm out there called the digital divide that you fall down. It’s the ‘haves’ and the ‘have-nots’ distributed geographically in different ways. There are highly skilled people in Africa. The telephone provision statistics are improving dramatically. The general problem is who can afford it". The challenge for those wanting to change Africa’s prospects through ICT is how to work with the energy and potential created by recently policy initiatives in ways that will open new prospects for its have-nots.

 

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