In late October, 60 finalists  were announced, (click HERE to see the full list) “with proposals representing more than $22 million of diaspora business investment to spur job creation in their native countries.”  (ADM Press Release) Out of these 60 finalists, between 10 and 20 winners will be selected in January, 2010.

“The finalists of the ADM competition represent the best of a new class of entrepreneur – those who are investing back in their home countries to create economic opportunity and reduce poverty and unemployment in Sub-Saharan Africa,” said Alonzo Fulgham, Acting USAID Administrator…

…”The business leaders selected here understand the challenges facing their native countries, and they have identified solutions that work,” said Anne McCarthy, Executive Vice President of Corporate Affairs, Western Union. “Our finalists have market-appropriate proposals that could sustain job growth and spark new business start-ups benefiting Sub-Saharan Africa.”

(Full text of ADM’s Press Release HERE.)

Over the next several posts, I hope to highlight a few of the finalist’s ventures, and celebrate the spirit of private investment in Africa.

As reported at  AllAfrica.com:

Kenya, Guinea, Zimbabwe and Niger were singled out for failing “to address the vicious cycle that links corruption to poverty.”

In South Africa, Ghana and Senegal, “high-profile anti-corruption cases and scandals continue to be regularly reported… and risk undermining political stability as well as the governments’ capacity to provide effective basic services in sectors such as education, health and water.”

Despite the wealth in natural resources enjoyed by Angola, the DR Congo, Guinea, Chad and Sudan, the survey said, “these countries have not been able to translate their wealth into sustainable poverty-reduction programmes. Instead, high levels of corruption in the extractive industries consistently contribute to economic stagnation, inequality and conflict.”

(click HERE for the full article)

Since corruption has a profound impact on all areas of African Development, this topic will be revisited within the next several articles .

“Use of locally-produced biofuels, i.e. those produced from crops grown in close proximity to a mobile base station, would significantly reduce the operating costs of rural cellular networks, thereby making cell phone usage rates affordable; an estimated 80% of the operational cost of a rural cellular network can be attributed to associated costs with fuel transport, security and protection.” (Read full article HERE)

It will be intriguing to find out what other seemingly basic services will be able to be extended to rural areas through the use of a locally-produced energy source.

One of the speakers was Robert Smith, the CEO of EarthWise Ventures, Inc.   Mr. Smith’s talk focused on attracting for-profit investors to the region, and on using the resources that ARE available, rather than focusing on those that are not.  He then went on to highlight one untapped resource that is plentiful in Teso – labor.  With approximately 80% unemployment, that means that there are a huge number of able-bodied folks with plenty of spare time on their hands.  He then posed an intriguing, practical, idea for Soroti to consider in its efforts to attract investment – fix the roads!

The roads in and around Soroti, Teso, and Uganda in general are awful, and definitely discourage would-be investors.  The condition of the roads  makes doing business in the region more expensive, due to increased transport time and costs for goods and people.  To get around on an individual level virtually requires that the businessperson use an SUV – an expensive alternative to other vehicles. Soroti has an underutilized airfield already…if Soroti could fix and maintain its roads, it could offer an advantage over other areas trying to attract investors.

As Mr. Smith highlighted, lack of money, previously the reason given for the poor condition of the roads, need not stand in the way of  improving them. Typically, labor is the most expensive part of such a project.   Mr. Smith noted  that if the local leaders could harness and organize the available labor, there were a number of businesses and/or organizations that could provide them with gravel and the other simple, low-cost materials needed to complete the project.  Interestingly, Mr. Smith didn’t even suggest that the laborers work for free. Instead, he postulated, these laborers could be compensated in some sort of credit basis, which could be redeemed later by money created from the project.  (eg:  proceeds from toll roads, and/or any of a number of other creative ideas) .  Not as exciting as immediate cash, but, if the alternative is receiving nothing at all…

For years, we have heard theories, philosophies, and academic ideas regarding development, but they stop short of the goal.  It is creative, practical, suggestions such as the one posed by Robert Smith that provide the final piece needed in development discussions.

“I have been asked by my friends living in the UK how the global recession is affecting Uganda and I usually answer them that it is not having very much effect, because we are governed by a different set of parameters.

Of course there is bound to be a knock on effect from the global downturn and we have already seen large fluctuations in the exchange rate, but for the present, the effects do not appear to be too severe. There are predictions that remittances from abroad will reduce and we have already experienced fuel prices rocketing, so why am I saying we have different parameters?

Uganda has never had an economic boom, so it cannot go bust.”

Read the entire article HERE.

Committing to supporting ecology and the environment in other countries demonstrates noble goals, and may win them brownie points with the 3 countries that stand to benefit most (Tanzania, Kenya, and Uganda). I am wondering if there are other benefits for Rwanda and Burundi being such “team players?”

In summary:
Since 2005, the East African Community (EAC) has operated as a customs union, allowing goods from Uganda and Tanzania entry into Kenya tax-free while Kenyan exports to those countries are conversely subjected to customs duties until 2010. The reason for this unbalanced arrangement is to allow the rest of the states within the EAC clutch to catch up with Kenya’s economy. The latter’s trade volume to Uganda and Tanzania alone stands annually at about $45 billion compared to a combined $2.2 billion trade that the two states do with Kenya.

In July of 2007, Burundi and Rwanda joined the EAC, making the bloc an African powerhouse with an estimated population of 120 million people and a gross domestic product of $41 billion.

In September, 2008, Tanzania withdrew its objection to nationals from other EAC member states having the right of residence in a host member state for purposes of economic activity or employment. Tanzania, however, still seems ambivalent about it’s role in the EAC. Government officials repeatedly question whether foreigners ought be allowed to work in the country or to purchase or own land. These two principles are key values propounded by the EAC.

The issues seems to be that Tanzania’s leaders do not believe that their political and economic structures can manage the demands of integration, which call for elimination of all trade barriers, allowing free movement of goods and services, and finally having a political federation. The biggest concern seems to be “Kenya’s stronger economy and the aggressive streak of its entrepreneurs. (Tanzania) is very concerned that Kenyan professionals will have an unfair advantage over Tanzanians,”

Tanzania is commonly perceived by much of the rest of the EAC to be more inclined to working with the Southern African Development Community (SADC) that it also belongs to, further hurting the Bujumbura agreements.

Many argue that the Bujumbura agreements ought go forward regardless of Tanzania’s heel dragging. Seems logical to me, but, practically speaking, what would the impact of Tanzania lagging back have on the region?

I have recently become intrigued with the oil-rich seeds of the Jatropha plant. Jatropha is a hardy plant, growing in areas that other plants won’t survive. My understanding is that it is a a good plant for erosion prevention and soil enhancement, thus making it a good choice for more fragile farming regions. Additionally, it is often intentionally and beneficially interspersed with other food and cash crops, to provide shade or support for those plants. Thoughts?

As a cash crop seems that the most success has been in the context of soap manufacturing.  Cleanliness a good thing, but the community impact would be greater if it could be used in a economically viable biofuel application.  Anybody have success stories in an African context?