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Esoko Software of Ghana Gets Equity Partners in IFC and Soro

West Africa Business Communities

IFC, a member of the World Bank Group, and the Soros Economic Development Fund have both invested $1.25 million of equity into Esoko, a Ghanaian technology firm.

The investment in Esoko will give small holder African farmers and businesses timely crop information that can be shared via text messaging, enabling farmers to increase their incomes.

Esoko’s software takes advantage of rapidly growing mobile-phone usage in Africa. The technology allows farmers affordable and timely access to market information that can help them negotiate better prices and improve the timing of getting their crops to market.

“Our platform was developed by African software engineers here in Accra, Ghana, and has been a totally local, market-driven initiative” said Esoko CEO Mark Davies. “IFC and SEDF have a strong track record of helping local companies get the funding and advice needed to expand into new regions and markets. With their support we hope to export this African technology all around the world.”

EsA farmer in ghana on mobile phone allows different parties in the agricultural value chain to exchange real-time market information. Farmers receive current demands, prices of crops, and the location of seeds and fertilizers directly on their mobile phones. Businesses can track how their products are used and market themselves to new customers. Associations and governments can share critical information with thousands using a simple bulk-text messaging feature. Esoko’s technology is being used in nine African countries and expanding quickly.

“SEDF’s investment helps break the information barrier for African farmers so they can generate more income,” said Stewart J. Paperin, president of the Soros Economic Development Fund, a nonprofit investment fund that works to alleviate poverty and community deterioration. “A more transparent marketplace enables farmers to negotiate fair prices, improve their timing on getting goods to market, and move between markets to sell products.”

Esoko is also publishing the first commodities indices in Africa, a powerful tool in helping ensure that farmers are fairly compensated for their crops, as formal commodity exchanges are very rare on the continent.

The company is initially publishing two indices that provide prices for 12 agriculture commodities in seven markets in Ghana.

“African technology firms are innovating and expanding beyond their domestic markets and we see a great opportunity to help ensure they have the proper financing for long-term growth,” said Kent Lupberger, Global Head of IFC Technology, Media, and Telecom. “Esoko is giving people practical tools to improve their lives and lift themselves out of poverty.”

 

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Africa Needs an Open Access to Western Markets, Not Aid

For decades African governments have largely depended on Western donors to fund everything from community latrines to public universities. Admittedly, some societies could not have survived to this day had it not been for foreign aid.

The African growth model based solely on foreign aid has so far not delivered the promises it was hoped to deliver. Actually, it has done more harm than good.

One will agree with me that foreign aid has served to promote oppressive regimes rather the everyday African people. Politicians in the category of Sani Abacha of Nigeria and Mobutu Sese Seko of Zaire/Congo eventually stacked the money in foreign banks which is then loaned back to Africa. Others do it in mild way by using the money to feed their cronies and families and have enough to send even children of their friends to world-class universities abroad. Opening markets to African goods and services will not solve the entire problem but at least leave some power in the hands of the ordinary people.  It is time that Western donors stop handing out billions of dollars in humanitarian and economic to dictators in Africa and then turn death ears and blind eyes to their deeds.

I believe, however, that it is time for us to begin to look at a different growth model for the African economy that depends less on foreign aid. This new model in my opinion should be based on open markets where African goods and services have free access to western markets. Growth in China, and to some extend India, have largely been dependent on the access of goods and services from these geographical regions into the western markets.

When we talk about goods and services, most readers will ask ‘what can Africa deliver? Well, it’s actually a lot. I’m not talking about Kenya or Senegal exporting cell phones and laptops to the US next year. But what about a system that makes it attractive for the US manufacturer to import raw materials from the African farmers, if that is what we bring to the market at this period in time.

Let us consider some figures. In 2001, the US approved about $4 Billion in subsidies to nearly 25,000 cotton growers in the US for cotton crop that was worth only $3 Billion at the world marker price. Other figures I came across pointed out that a single cotton grower in a mid-western US state received $6 million in subsidies, which is larger than the combined annual earnings of 25,000 cotton farmers in Mali. (For your information, the $4 Billion government subsidy is also more than one third what the US spends on the nearly 1 billion people on the African continent).

This policy makes it unattractive for manufactures to import raw materials from Africa and other developing countries

This system is being perpetrated not only by the US but also by the European Union and China, which is destroying the livelihood of countries like Mali, Senegal, Chad, and Benin which are all major cotton producing countries. A recent study by UNCTAD-India pointed out that if the US were to do away with some of these subsidies, farm output will decline by nearly 40%. Although we would pay more at the grocery story in the US, it will spur up more imports from Africa and other developing regions which will generate enough foreign exchange the fund their community development activities.

This is not advocating for a loss-loss situation for the US and Europe. In fact, it’s more than a win-win case. Western countries have more to gain than lose.

The African Growth and Opportunity Act (AGOA) were enacted to do just this. AGOA provides duty-free access to the U.S. market for a wide range of products from eligible African countries, while spurring African governments to make their countries attractive to U.S. investment. I think this is the type of initiative that needs an injection of momentum and expansion.

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The Currency wars: when two elephants engage in a wrestle fight…

 Governments across all continents are doing whatever they can in order to avoid ever using the ‘R’ word in any briefing. I mean the RECESSION.

That itself is not a bad thing. They way they do it could have damning unintended consequences on developing nations, especially those in Africa.
The US and China have been in a tug of war for a while regarding currency manipulation by the latter. Perhaps in order to show its disapproval of the Chinese policy, the US Federal Reserve announced it was pumping over $600 billion into the US economy. Several countries were swift to register their disapproval of the US move but similar or alternative policies with similar effects are being employed by all big economies.
Let us call it  the Cold ‘International Currency’ War. The big guys will surely find a way to resolve it among themselves either by sitting around the table or by indirect punitive measures as is already happening.
We often say that ‘when two elephants fight, it is the grass that suffers’. If Africa’s fragile economies get caught up in the middle of this tug of war, the consequences are obvious. And it would not be the first time Africa will have to suffer the consequences of a currency war. In fact currency war indirectly led to the rise of Hitler and hence the second world war in which 1000s of African military were drafted to fight for their colonial masters and never came back home.
This time, I doubt it will be a war of the armies. It will be a war around kitchen tables and markets across Africa. My fear is that if policies that allow cheap money to flood the markets are unguarded and go viral, they may leave African countries with no borrowing power, less export potential, and dependent on imported goods. A few days ago, I wrote my opinion here on what is needed to really lift the African economies to the level always talked about: it is open access to western markets of African goods and services. Cheap western money will have the direct opposite effect.
Currently, the Bank of Japan, the US federal Reserve, the Bank of England the European Central Bank are competing with one another in pumping out billions of electronic money into their economies. This is no different from the race to build the first nuclear bomb. This policy which they call quantitative easing [The term quantitative easing (QE) describes a monetary policy used by some central banks to increase the supply of money by increasing the excess reserves of the banking system] is flooding fragile economies with the wrong kind of investors leading to unexpected rise in exchange rates, again. African economies are caught up in the middle of the war among the giants.
Many African countries have made significant progress in creating a more business-friendly environment to promote local investment as well as foreign direct investment. Undeniably, many African countries have made impressive progress towards political and economic stability, too. I applaud the World Bank’s move to promote the African economy with press releases and even YouTube videos. Currently some analyst rate the African economy with the highest return on foreign investment. Annual foreign direct investment flow in Africa rose from $9 billion in 2000 to 62 billion in 2008. Currency policies that will be at war with such an enviable trend are very unwelcome.
By the way, is it not about time that we got a globally empowered body to police financial policies of all nations: the US, Europe, China, and others, to ensure a uniform playing field?
 
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Ghana’s Economy 75% Bigger Than Previously Estimated

cedis notes
By Moses Mozart Dzawu
Nov. 5 (Bloomberg) — Ghana’s economy is 75 percent bigger than previously calculated, the country’s Statistical Service said, slashing the relative size of the fiscal deficit and the current-account shortfall.
The West African nation’s gross domestic product this year is 44.8 billion cedis ($31.2 billion), compared with the previous estimate of 25.6 billion cedis, Grace Bediako, head of the Accra-based agency, told reporters today.
“The revisions will be a huge positive for the relative risk matrix” of Ghana, Stephen Bailey-Smith, an analyst at Standard Bank Plc in London, said in a note to clients. The changes “should foster a rating upgrade.”
Standard & Poor’s cut Ghana’s credit rating to B, five steps below investment grade, on Aug. 27, citing concern about the large fiscal deficit and a lack of clarity on oil-industry laws. The government posted shortfalls equivalent to 14.5 percent of GDP in 2008 and 9.7 percent in 2009. The International Monetary Fund said on Oct. 1 that the shortfall may exceed the 8 percent target this year. Those figures are now significantly smaller.
The statistics service also raised its growth forecast for this year to 6.6 percent from 5.9 percent, and revised up its calculations for the previous three years. GDP expanded 4.7 percent in 2009, 8.4 percent in 2008 and 6.5 percent in 2007, compared with previous estimates of 4.1 percent, 7.2 percent and 5.7 percent.
Economic growth slowed in 2009 after the government embarked on an austerity program to bring down the budget deficit. Ghana posted a current account deficit of about 7.9 percent of GDP last year, according to the previous data.
Eurobond
Ghana’s 8.5 percent fixed-rate Eurobond due October 2017 was bid for as much as $115.50 at 5:14 p.m. in London, with a yield of 5.746 percent, according to data compiled by Standard Bank London. The bid price is 0.5 percent higher than yesterday’s close of $114.87, while the yield is 10 basis points lower.
Today’s announcement “confirms that over the last five years Ghana has performed better than most of its peers,” Wayne Mitchell, the country representative for the IMF, said in an interview today.
The revision won’t affect IMF support for the country, since “assistance is determined by need and not economy size,” Mitchell said.
Deputy Finance and Economic Planning Minister, Seth Terkper, said on Oct. 20 that Ghana may lose access to cheap loans if the new data show the country is wealthier than thought.
New Activities
The size of the economy was revised up after new economic activities were added, methodology was improved and the base year was shifted to 2006 from 1993, Bediako said.
“The new data series includes activities of the oil sector, forest plantations and information and communication, which were not included in previous estimates,” she said.
The new GDP places Ghana among middle-income countries, as defined as those with a per capita income of more than $976 a year, Bediako said. Ghana’s is now $1,318.36.
The statistics aren’t all good news, said Sampson Akligoh, an analyst at Accra-based Databank Financial Services.
“If GDP is 44 billion cedis and tax revenue is less than 7 billion cedis, it tells you tax collection is not enough,” he said in an interview today.
Ghana’s economic growth may average about 8 percent in the next three to five years, as oil production starts from the West African nation’s Jubilee oil field December, Kofi Wampah, deputy central bank governor said Oct. 7.
Wampah said the economy may expand 10 percent to 15 percent next year, slower than Finance Ministry’s prediction of 20 percent.
–Editors: Philip Sanders, Ana Monteiro
To contact reporter on this story: Moses Dzawu in Accra at mdzawu@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.
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Imagine all you needed at the ATM was your face, no card

Mamadu Yvonne
You may soon withdraw money from an Automated Teller Machines without using your credit or debit card, thanks to a face recognition technology in the making.
Known as the Basic Intelligent Automated Teller Machine, if the new device is incorporated in the current ATMs, all one will require to get money is to stand in front of the machines.
It is the brainchild of Dr Waweru Mwangi, the director of the Institute of Computer Science and Information Technology at Jomo Kenyatta University, and is on display at the national scientific conference in Nairobi.
The smart ATM removes the need to carry cards every time one wishes to access the bank account. The idea behind the machine’s development is to make banking friendly.
“We realised that many people feel uncomfortable with the card, which in some cases is retained by the machine,” Dr Mwangi says.
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Its use could also reduce the now common incidents where carjackers force their victims to empty their accounts at gunpoint, often taking the card and the personal identification number (PIN).
The Intelligent ATM comes equipped with a camera that recognises the customer’s face and sends details of the facial dimensions to a database for verification.
The camera uses the system of biometrics to recognise the account holder — those used in computer science are the distance between the eyes and the proportion of the nose to the mouth and the location of the cheekbones.
Once the image is found to be authentic, the customer is then prompted to enter their PIN or asked a personal question such as “What’s your pet’s name?”
The correct PIN or answer would then allow the person to use the ATM in the normal way. Your twin brother or sister would pass the face test but fail at the PIN or question stage.
It also impossible to use a life-size photograph of the account holder as the machine uses three dimensions, length, width and depth, to recognise the image.
Dr Mwangi said the only requirement would be for the software to be working properly and then it would be linked to the current system of machines in use.
Face recognition technology is used to control access to buildings, but Dr Mwangi said it has never been used in ATMs anywhere in the world.
Dr Mwangi said at the current rate of progress, a prototype would be ready for testing in a few months and then the idea would be sold to banks and implemented.
It is one of the projects being developed by the National Council for Science and Technology and Jomo Kenyatta University of Agriculture and Technology.
However, face recognition technology has struggled to perform under certain conditions in other countries where the technology has been tested, some researchers say.
Mr Ralph Gross, an American researcher at the Carnegie Mellon Robotics Institute, says where face recognition does not work well include poor lighting, sunglasses, long hair, or other objects partially covering the face, and low resolution images.
However, the Kenyan innovators are optimistic that they will beat the setback upon further improvement of the technology.
And at the same exhibition, two student innovators have finally presented the bicycle-powered smart mobile phone chargers in the market.
This is a year after Pascal Katana, 24, and Jeremiah Murimi 25, featured their innovation at the national scientific conference. The simple device is expected to change lives in rural areas as well as boost the boda boda industry.
(The Nation)

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African intellectuals building other nations

(Reuters)
African graduate leaving the continent for greener pastures
 
Africa's contribution to the global body of scientific research is very small and does little to benefit its own populations, according to a report from Thomson Reuters released on Monday.
 
Like India and China, Africa suffers from a "hemorrhage of talent," the report said, with many of its best brains leaving to study abroad and failing to return.
 "The African diaspora provides powerful intellectual input to the research achievements of other countries, but returns less benefit to the countries of birth,"  Jonathan Adams, director of research evaluation at Thomson Reuters, said in a statement as the report was published.
More information about the report is available here
Adams and colleagues, who use a Thomson Reuters database to track scientific publications, found that three nations dominate Africa's research output — with South Africa leading by a long way, ahead of Egypt in second place and then Nigeria.
 
"Africa's overall volume of activity remains small, much smaller than is desirable if the potential contribution of its researchers is to be realized for the benefit of its populations," said Adams.
 
The report found that part of the problem was down to a "chronic lack of investment in facilities for research and teaching" — a deficit the authors said must be remedied.
 
Adams said the reason behind this was not simply money: "The resources available in some African countries are substantial, but they are not being invested in the research base."
In fields of research relevant to natural resources, however, the study found a relatively high representation of African research as a share of world publications.
 
South Africa's 1.55 percent share of research in plant and animal science is the continent's biggest share in any field, it said, with this output surpassing Russia's 1.17 percent but well behind China's 5.42 percent share in the same field.
The report pointed to a few examples of countries which, despite low output, produced much higher quality research than larger neighbors.
 
Malawi, for example, with one-tenth the annual research output of Nigeria, produces research of a quality that exceeds the world average benchmark while Nigeria hovers at around half that impact level, the report said.
 
"The challenges that the continent faces are enormous and indigenous research could help provide both effective and focused responses," it added.
The study is part of a series showing the changing landscape and dynamics of scientific research around the world.
 
Previous studies found that China had more than doubled its output of scientific papers to rank second only to the United States in terms of volume, while Russia's influence in science and scientific industries was rapidly shrinking.
(Editing by Michael Roddy)
 
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African Fossils Suggest Complex Life Arose Early

By Gwyneth Dickey (Science News)
Researchers have found what may be the earliest evidence of multicellular life on Earth. Large fossils uncovered in 2.1 billion-year-old rock from Gabon, in western Africa, appear to be incipient examples of macroscopic life in what was then a sea of single-celled microbes.
A three dimensional X-ray image of the outer (left) and inner (right) body of a fossil from the Gabonese site. Scientists believe that multicellular life really took off much later, in the great expansion of animal body plans known as the Cambrian explosion 545 million years ago.
“The discovery is fantastic because it shows the existence of multicellular fauna 1.5 billion years earlier than what we know,” says team leader Abderrazak El Albani, a sedimentologist and paleobiologist at the University of Poitiers in France. “This is important to understand the evolution of life on Earth.”
Some researchers have suggested multicellular organisms arose as early as 1.6 billion years ago, but the evidence is controversial. El Albani and his colleagues were thus surprised to find large fossils in the newly excavated ancient Gabonese rocks. So far, the team has collected over 250 specimens that range in size from 1 to 12 centimeters.
Using detailed X-ray imaging called microtomography, the team created three-dimensional images of the fossils inside and out. The organisms had flat, round, soft bodies, with slits around the edges and complex, patterned folds inside. The creatures belong to new species that have never been described, the team reports in the July 1 Nature.
Other researchers agree that the large size, thickness, and three-dimensionality of the organisms suggest that they were, indeed, multicellular. “There does seem to be something more than just a clonal colony of bacteria,” says paleobiologist Philip Donoghue of the University of Bristol in the United Kingdom.
El Albani and his team believe the complex patterns and folding mean that cells must have coordinated their growth through chemical signaling, like all multicellular organisms do. The fossils could even be the first examples of eukaryotes, cells with membrane-bound nuclei, according to the team.
But since actual cells were long gone from the sediments, the team had to prove these fossils were not simply mineral formations that looked like animals.
Pyrite, a sulfur-containing mineral also known as fool’s gold, filled the fossils, providing evidence that sulfate-breathing bacteria had eaten away at living tissue. Carbon and sulfur isotopes also confirmed the fossils’ organic origins.
Further analysis showed that the fossils couldn’t have been more recent organisms that burrowed deep into sediments, because the surrounding rock was the same inside and outside the organisms’ folds.
Rock chemistry indicates the organisms lived about 30 to 40 meters deep in sea water. They likely breathed oxygen, which by that time had been building up in the oceans and atmosphere for 350 million years. Donoghue says it’s exciting that scientists are “edging back” the fossil record toward this so-called “great oxidation event” 2.5 billion years ago.
The research team plans to do more experiments to determine how these organisms lived and how to further categorize them
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G20 Leaders Must Renew Their Commitment to Global Development

By Kofi Annan
Ahead of today’s G20 Summit in South Korea, two issues stand out for those of us who take an interest in international development.
First, the concepts of fairness, balance, and the common good have experienced a welcome renaissance as world leaders have had to remind each other of these universal principles to avoid a potentially devastating escalation of their disagreements on currency values and trade imbalances.
Second, while it remains to be seen to what extent it will help to bring countries’ contending economic strategies into line, this rediscovery of basic values comes just as the G20 is beginning to include international development issues in its deliberations. Naturally, it is my profound hope that the principles of fairness, balance and the common good which have become so popular with G20 leaders lately will also inform these discussions — and not only those on issues like undervalued currencies, lopsided trade statistics or skewed consumption patterns however important they may be.
Unfortunately, the signs are decidedly mixed. On the one hand, the global repercussions of the financial and economic crises have clearly nourished an understanding of the true extent and consequences of our interdependence. At least for a moment, there seems to have been a consensus that a world that restricts the benefits of globalization to a few at the expense of many is neither fair nor stable; that one cannot address trade imbalances without addressing the development imbalances that underlie them; and that it is in everyone’s interest to see the developing world graduate out of instability and economic dependence as soon as possible.
However, all these realizations have not yet led to the fundamentally different policies that are so urgently needed. In fact, in many G20 countries the crises, and particularly their effects on the world’s poor, appear already all but forgotten and business and politics have resumed with little regard to the damage caused, the trust destroyed, and the lessons learned. Several G20 members have even used the economic upheavals as an excuse to tighten protectionist policies in direct contrast to their repeated pledges to keep markets open. As so often, developing countries have been among the primary victims.
This is deeply unfortunate as, in my view, the G20 states, both individually and collectively, are the natural drivers of development. They are, by definition, the countries with the capacity, resources, influence and, thus, the moral obligation and responsibility to help those less fortunate.
Many of them have only recently graduated into major economies and their developmental experiences are still fresh. These countries understand that the key to development is not charity but equitable, job creating, and ideally green economic growth fueled by investment in the productive sectors, agriculture, infrastructure, renewable energy, trade, knowledge and technical skills. They also appreciate that the most important sources of development finance must be domestic revenues and private sector investment and that aid’s main value other than in meeting urgent humanitarian needs, is to increase capacities, reduce dependence upon external support, and to lubricate and leverage investment in the sources of growth and good governance.
It is thus encouraging that the development agenda proposed by the South Korean presidency speaks as much to these realities as to a new sense of partnership and genuine mutual accountability. The document, as far as it is known, covers all the right points, including the unblocking of existing initiatives and the need to complement the efforts of other actors such as the G8, the G77 and, of course, the United Nations. If the leaders assembled in Seoul decide to take it on with the same universal values in mind that they now invoke in the areas of trade and exchange rates, we will have gained much.
Having said all this, the implementation of the valuable ideas entailed in the Korean proposal should not be made dependent on the G20 taking them on as a group. While a renewed commitment to development by the world’s most powerful group would certainly be a major step in the right direction and send an important political signal to developing countries, it is of course not enough on its own to overcome the immense challenges that these countries face. Nor does it necessarily invalidate some of the concerns raised regarding the G20’s legitimacy and capacity.
What really counts is that each member of the group internalizes the concepts of fairness, balance, and the common good and adapts its behaviour accordingly. If the G20 setup can help them do so by playing to its unquestionable strengths of composition, reach and sheer economic prowess, this will be all the better and should not only be welcomed, but encouraged.
Kofi Annan is Former UN Secretary General & Chair of the Africa Progress Panel.
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