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Ghana: Oil-rich City Sparks Entrepreneurs and Debate

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Commodity booms can seem like the answer to a poor nation’s prayers, a way to fulfil all their development dreams and goals. The reality, however, is far more complex. More often than not, the discovery of resources sparks a mad scramble for profits and patronage, as politicians and politically connected elites carve out their slice of the new resource boom before anyone else.

The twin cities of Sekondi-Takoradi (http://en.wikipedia.org/wiki/Sekondi-Takoradi) in the Western Region of Ghana are now experiencing an oil boom. Ghana’s oil production went online in December 2010 and the government is hoping it will double the country’s growth rate.

Large supplies of oil were found off the coast in 2007, transforming Takoradi from a sleepy, rundown port city into the hub for the oil boom.

Local man Peter Abitty told the BBC he was renting out an eight-bedroom house for US $5,000 a month. The house overlooks the sea and comes with banana and coconut trees.

“Tenants that come here can take the coconuts for free! We don’t charge anything,” Abitty said.

He put the strong interest in the house down to a simple fact: “It’s out there: oil, oil, oil.”

People’s hopes are being raised in Ghana’s case because it has built a reputation as a better-governed country than other African petro states like Nigeria and Angola.

But others argue that price increases caused by the boom are destroying local businesses. A report on the Ghana Oil news website found popular local businesses suffering. One example it gave was the Unicorn Internet Café, an employer of local youth, which shut down in 2010 because of high rents.

It found businesses have shut down in the following sectors: timber, sawmilling, super markets, mobile phone shops, boutiques and trading shops. But it also found many new businesses opening up, including banks, insurance companies and hotels.

The challenge facing Ghana is to ensure oil brings a long-term change to a higher value business environment and economy, rather than just an unequal and temporary boom.

Another challenge is to connect the many youth leaving education in the city with the jobs and opportunities being created by the oil industry. The twin cities are a regional educational centre with a lot of technical colleges and secondary schools.

To counter these concerns, a Regional Coordinating Council is promising to place the growth of small and medium enterprises at the centre of regional development.

The dreams and promises for Takoradi are very ambitious. “In five years time, I see Takoradi becoming one of the modern cities of the world,”  Alfred Fafali Adagbedu, the owner of Seaweld Engineering (www.seaweldghana.com), a new local company set up to service the oil sector, told the BBC.

“I can imagine skyscrapers, six-lane highways and malls.”

“The transport industry is going to improve, because workers on the rig are going to need to be transported. Agriculture is going to see a boom because all those people on the rig will need to be fed.

“Even market women are going to see more business, because a lot of workers are going to have very fat paychecks. Everyone in this city is going to gain in business.”

How far Takoradi has to travel to come close to meeting these dreams and expectations can be seen in its current state. The railway station has a train with laundry hanging from it because it hasn’t moved in years, reported the BBC. People are living in the sleeping car of the train.

But the typical signs of a boom are all visible: traffic jams, booked hotels, rising rents and prices, and it is already hurting people on fixed salaries.

Local authorities have plans to demolish rundown parts of the city and rebuild with modern office environments for the new businesses resulting from the oil economy.

An estimated US $1 billion a year in revenue will go to the Ghanaian government and local authorities want 10 percent of this to be ring-fenced for regional development.

“Many resources are coming from the western region. From years back, gold is here, timber is here, diamonds are here,” said Nana Kofi Abuna V, one of the few female chiefs in the area.

“But when they share the cake up there, they leave out the western region. This time, if there is oil and gas in the region we should benefit more than everybody else.”

But Adagbedu at Seaweld Ghana believes Ghana will see real improvements.

“I’m very sure we will avoid the mistakes,” he said. “Ghana is a democracy, everyone is watching, so there is going to be a lot of improvement here.”

And to help in keeping these promises, the BBC will continue to return to Sekondi-Takoradi to track its changes and see how things improve.

Published: September 2011

Resources

1) BarCamp Takoradi: BarCamp is an international network of user-generated conferences (or unconferences). They are open, participatory workshop-events, the content of which is provided by participants. Website:http://twitter.com/#!/barcamptakoradi

2) Ghana Ports and Harbours Authority: The Authority overlooks the Takoradi port. Website:http://www.ghanaports.gov.gh/GPHA/takoradi/index.html

3) Friends of the Nation (FON): The NGO serves as a catalyst towards increased action for sustainable natural resource management and health environment in the Takoradi region. Website: http://www.fonghana.20m.com/aboutus1.htm

4) Takoradi City: A website packed with information and photos on the city. Website:http://www.takoradicity.com/pages/sections.php?siteid=takoradicity&mid=39

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Ghana’s Funeral Economy Innovates and Exports

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The West African nation of Ghana’s funeral economy is attracting innovation and grabbing attention outside the country. The nation’s elaborate – but expensive – funeral rituals provide craftsmen with a good income. And new products are being introduced to handle the financial consequences of this unavoidable fact of life.

As Africa undergoes the biggest shift from rural to urban in its history, the continent is experiencing a technology boom, mainly led by the mobile phone. Mobile phones have become important transactional tools in daily life, enabling people to communicate and to do business, thanks to micropayments and prepay. Interwoven in these twin phenomena of greater urbanization and the mobile phone economy is a rising and growing middle class population with spare cash to spend on more than just the basics of survival. And all of this is throwing up new economies and new products to sell to these middle class customers.

It is in this context that Ghana’s flamboyant and vibrant funeral ceremonies have become an economy unto themselves.

Ghana’s crafty craftsmen have developed a global reputation for their bizarre but highly skilled coffin designs. They build striking coffins of elaborate designs and shapes and flamboyant colours. The coffins usually take on the shape of an aspect of the deceased’s former profession or vocation. For example, a pilot gets buried in a mock-up of the plane they flew, or a farmer is buried in his main crop, like a giant corn cob.

It is proof the creative economy works and adds value to existing products and services. What were just simple coffins for a utilitarian task (burying the dead) becomes an elaborate work of art and transforms burial into a grander experience.

One of the most popular designs is the now-ubiquitous and much-coveted mobile phone: Africa’s great electronic connector. And it is the mobile phone that is allowing people to buy life insurance to be able to pay for the coffins and elaborate funerals.

Mobile money is a dynamic and fast-growing industry that is firmly established in the global South. Some are forecasting the market in mobile payments will reach US $60 billion by 2015.

A range of companies are now offering life insurance policies that can be paid for in small “micropayments” by mobile phone. This is an important service for people who may not have a formal bank account and who can be devastated by the costs of a family member’s funeral.

The two companies pioneering this “micro-insurance” service are Hollard Insurance (http://www.hollard.co.za) and Mobile Financial Services Africa (http://mfsafrica.com). Both are offering funeral insurance by mobile phones. Working with MTN – Africa’s largest mobile phone group (www.mtn.com.gh) – they are launching the mi-Life insurance product, sold for between US 0.80 cents and US $4 for a month’s coverage.

MTN pioneered its Mobile Money service in 2009. Out of 9 million MTN mobile phone subscribers in Ghana, 1.8 million have signed up for the opportunity to pay bills and make other financial transactions over their mobile phones.

Selling life insurance by mobile phones is radically altering the marketplace for this product. Life insurance had been out of the scope of most Ghanaians just as bank accounts were beyond the reach of the poor.

Jeremy Leach, head of micro-insurance at Hollard, told AllWestAfrica (allwestafrica.com), that 55 percent of Ghanaians say they can’t afford life insurance. “In terms of affordability, we’ve tried to address that.”

MTN Mobile Money Ghana’s general manager, Bruno Akpaka, told the Financial Times mi-Life is 50 to 70 per cent cheaper than comparable policies.

Subscribers sign up by using their mobile PIN (personal identification number) at a local kiosk, or send a short message service (SMS) on their handset. Once signed up, a monthly premium is taken from their account. When it runs out, they top it up at the kiosk again.

It currently offers basic funeral cover: a lump sum to the family when the main income earner dies. This money is used towards the costs of expensive funerals. Other products in the pipeline include insurance for school fees.

For the coffin craftsmen, the fast-growing economy of African online shopping is helping with sales. The elaborate craft coffins can be bought online from various platforms including eShopAfrica.com, which promises to sell “fair trade direct from Africa.” Its dedicated Ghana coffin pages (www.eshopafrica.com/acatalog/Ga_Coffins.html) advertise small coffins that take a month to make, and larger ones can take up to three months to build. Prices advertised on the eShop site range from US $1,500 for a full-sized, six-foot coffin, to US $175 for a “desk top chest.”

Designs range from a mobile phone to a Ferrari race car to a computer mouse. But it is not just the resting places for the deceased that are on sale. The cabinet- and coffin-making skills are also turned to making a wide range of storage cabinets in bright colours and imaginative shapes, from a football to a red pepper and a beer-bottle shaped drinks cabinet.

The global attention for the craftsman has been impressive. They are lauded by fine art collectors around the world and have been shown in galleries such as London’s Jack Bell Gallery (www.jackbellgallery.com/paajo.html). The legendary coffin artist Paa Joe is one of the most featured in gallery shows.

Published: April 2011

Resources

1) Shop Africa 53: An online shopping website allowing independent traders to vend their products to the rest of Africa and the world. Website: www.shopafrica53.com

3) Going into Darkness: Fantastic Coffins from Africa by Thierry Secretan, details the culture and the craftsmen, behind the iconic coffins. Website:www.amazon.com/exec/obidos/ASIN/0500278393/cordelinetwebstu%22

4) Creative Economy Programme: The creative economy is an emerging concept dealing with the interface between creativity, culture, economics and technology in a contemporary world dominated by images, sounds, texts and symbols. Website:www.unctad.org/Templates/StartPage.asp?intItemID=4577&lang=1

Bangladesh Coffin-Maker Offers an Ethical Ending

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Combating Counterfeit Drugs

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Access to good quality drugs is a serious problem across the South. The International Narcotics Control Board estimates that up to 15 per cent of all drugs sold around the world are fake or counterfeit, and in parts of Africa and Asia this figure jumps to 50 per cent. The US Food and Drug Administration estimates counterfeit drugs make up 10 per cent of the global medicine market. The US Centre for Medicines in the Public Interest predicts counterfeit drug sales will reach US $75 billion globally in 2010, an increase of more than 90 per cent from 2005.

Fake drugs are a major cause of unnecessary death and destroy public confidence in medicines and health services. While counterfeit drugs have been on the rise, there is little co-ordinated or effective action to counter this menace afflicted on the sick.

But in Ghana, a solution has emerged that shows a way to guarantee that quality drugs get to the sick who need them. CareShop Ghana uses the franchise model – where licenses are sold to approved vendors who adhere to strict guidelines – to ensure that the quality, accessibility and affordability of essential medicines in and around Accra is guaranteed. CareShop has made deals with close to 300 franchisee pharmacies – often modest operations – who sell over-the-counter drugs.

In Ghana, preventable and curable illnesses like malaria and diarrhoeal diseases are among the leading causes of death. Their treatment pushes many people to financial despair; they can ill afford the extra burden of worrying about counterfeit drugs and the harm they do. Like many countries in the South, Ghana’s public healthcare system is unable to meet these needs and so most people turn to the private sector for help.

An estimated 65 per cent of people turn to licensed pharmacies. But many of these operate haphazard businesses, dispensing expired or counterfeit drugs.

The Ghana Social Marketing Foundation Enterprises Limited (GSMFEL) founded CareShop in 2002, hoping to battle common infectious diseases in poor areas by making sure good drugs get through to the sick.

GSMFEL makes a small profit as the franchisor by selling high-quality drugs to the franchisees. The key to CareShop’s success is imposing standardization on franchisees, so they have to stick to common diagnosis, quality and pricing. They make more money when they adhere to these rules than when they break them. To ensure there is no tampering with the drugs, they are delivered straight to the vendor’s doorsteps, and it is all backed up with health and business training support and branded materials.

The tide can be turned around on fake drugs: in 2002, the WHO reported that 70 per cent of drugs in Nigeria were fake or substandard: by 2004 that figure had fallen to 48 per cent.

Stimulating private sector solutions to African healthcare problems is now receiving an additional boost from a new fund established by the World Bank’s private sector arm, the International Finance Corporation. Launched in 2007, it offers cash and loans totalling US $500 million to commercial healthcare projects in Africa. According to its own statistics, 60 per cent of health expenditure in sub-Saharan Africa is privately funded, and the market, excluding South Africa, is worth US $19 billion.

Published: May 2008

Resources

  • SafeMedicines.org is a website offering the latest reports on fake medicines and is a good place to report incidences.
    Website: http://safemedicines.org/in_the_news/
  • A paper on the global threat of counterfeit drugs: Click here.

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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African Entrepreneur Wants to Bring Order to Urban Chaos

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

All over the global South, urban and semi-urban areas are growing at a furious pace. Great swathes of mega-regions – places where large cities blend seamlessly into smaller towns and villages creating a giant economic hub – are becoming key economic and opportunity drivers in developing countries. One of the downsides of this rapid growth and economic vitality is the chaos and confusion brought by frenetic change. Into this busy landscape steps the fast-moving new world of everywhere computing, where computers exchange information with almost everything in the environment. A Ghanaian information technology pioneer and entrepreneur is changing perceptions about Africa by using the new technology of Semacodes – and proving a semblance of order can arise from the chaos and bustle of the street.

Semacode – a smart 2D barcode – was developed by Canadian Simon Woodside and is a tool to make everywhere computing a possibility. It works by embedding a web address into a 2D barcode called a tag which can be affixed to buildings, street lamps, and other landmarks. If one would like to know more information regarding the area they are in, all they need to do is find the nearest Semacode and use their internet-enabled camera phone to scan and read the code. A camera phone containing the Semacode’s Software Development Kit (SDK) detects and decodes the tag and sends the user the web address using the phone’s built-in browser. The user quickly learns what businesses and services are in the area and what the current street name is.

With code developed in Ghana called Semafox, one can create Semacodes for objects and contexts using a web browser – (http://sohne.net/semafox/). It is now being adapted by Ghanaian entrepreneur Guido Sohne to solve the common African problem of chaotic cityscapes brought about by rapid change, high turnover of businesses and changing street names. This handy tool has the power to revolutionise how people communicate and do business in the South, and a rival technology using a similar concept – QR code – is already widespread in Japan. Semacode also has its own user-contributed community website, Semapedia, to produce semacodes for any object or building.

*~~~~~~~~~~~~~~~~~~~~~*

Sohne is a computer code developer working for CoreNett – a Ghanaian electronic transaction processing company – and has been working on developing the code underlying the semacodes, and also piloting its application on the streets of Accra, the capital. Sohne (a former Kofi Annan ICT Centre for Excellence developer-in-residence), is an excellent example of how an IT innovator in the South is linking up early in a new technology’s development to help develop and evolve it.“It is rare to find African-created technology being used today in Western cyberspace,” concludes Sohne. It “is indeed a step forward for African technology as well as an indication of the benefits of collaborative development based on liberal software licensing such as open source software.”

Published: June 2007

Resources

  • You can download the Semacode reader software, here. This includes software for mobile phones and computer servers.
  • The latest stories and updates on Semacode can be found here.
  • A thorough explanation of rival technology QR Codes and their impact in Japan and how they work, can be found here. At present, QR Codes are used in a variety of ways, from linking to content and advertising in magazines and newspapers, to food product labels, public transportation signage, and as a way to communicate between people on the street.
Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021