Unlocking the Wealth at the Nigerian Bottom of the Pyramid
July 16th, 2007 | Published in Advocacy, Africa, Business and Entrepreneurship, Nigeria | 8 Comments
After watching Robert Neuwirth short documentary on informal economy in Lagos via Africa Unchained, I have been prodding for several days at the “so what?” piece.
Robert has a penchant for studying what the majority of Nigerians will consider – “worthless” and even “degrading”; he studies slums and their inhabitants. His documentary on Lagos - a city he calls the largest open-market in the world - confirms what several economists have long believed, particularly C.K. Prahalad, the author of the “Fortune at the Bottom of the Pyramid (BOP)” book. There is indeed wealth among those raking a living at the lower ebb of the society ( the base of the pyramid).
As I mulled over the Robert’s documentary, the question that kept popping in my mind was what can be done to assist the several micro businesses operating in the slum? This is the “true bottom of the Nigerian pyramid” - and believe me you, none of the government economic policies have much meanings here, in fact majority of those not been designed to empower the folks here at all. What can be done beyond the mere “policy statements of micro-financing or micro-lending”?
I will echo the question raised via a similar post on Nubian Cheetah, “Does the BOP address wealth creation?” (Nii Simmonds):
How can the poor generate income and sustain a revenue stream?
Please watch the video and return to offer your insights.
July 17th, 2007 at 2:34 pm (#)
The question then should be how to maximise the potential that lies in that stratum of society…
July 18th, 2007 at 10:51 am (#)
Nice book: Bottom Billion, must confess I have read only one chapter. I think the idea resonates.
I am a believer in cocreation. Wealth can be unlocked amongst the BOP if only they have some direction and the power in their hands and efforts are reinforced by those a bit removed from the Bottom.
July 18th, 2007 at 11:50 pm (#)
[…] Whythawk discusses the informal market and remittance using Zimbabwe as study. The post offers some insights to why Zimbabwe hasn’t “collapsed in anarchy and civil war” despite the crushing economic difficulties: 80% of the working-age population (4.5 million people) unemployed, and inflation at 11 000%. Failed states are less likely to experience catastrophic collapse if they have a large diaspora sending lots of money home…In relatively open economies the scale of the informal market provides a good approximation to the real level of support for the state. At 20 – 30% of the economy a government would do well to look to its policies. At 40 – 60% the state is in danger of losing all authority. At 80%, Zimbabwe’s level, the state is functioning in name only. While it may have the largest army and be able to terrorise the masses, it has lost. […]
July 24th, 2007 at 2:46 pm (#)
There is only one way to return wealth to the bottom billion: Find out what they do for a living and add value to it. In the the Nigeria context for example, the 25 million cassava growers in Nigeria will be swimming in wealth if a bowl of garri goes for USD70 on the international market just like the barrel of crude oil which currently restrict wealth to the pocket of very few.
But where are the economic geniuses that will put cassava products in the meal of every American, European or Chinese? Where are the technological geniuses that will convert cassava products into indispensable inputs for the manufacture of foods, drugs and other industrial products the world over?
If you can answer these questions, then you can possibly answer this last one: Why on earth do I think this is any remote possibility in the current African civilization?
July 24th, 2007 at 3:00 pm (#)
Kunle you hit the nail on the head.
August 3rd, 2007 at 8:26 pm (#)
This is a time for all Africans to look at other developing markets and try to mimic what has worked, and ignore what hasn’t. India and China are growing at phenomenal rates and attracting foreign capital. There is no reason why Africa can’t be in the same position in 5-10 years.
Africa is in a new renaissance that is empowering women, African cheetah’s, and others to be assertive and not to depend on foreign aid hand-outs or the government for help.
Nubian Cheetah
August 11th, 2007 at 11:05 pm (#)
I think that what Whythawk says about how much of a country’s economy is formal vs informal is very telling-as to the level of support given by that country’s government.
But that notwithstanding, it is within the scope of global entrepreneurship that the BOP participants become empowered. I am almost inclined to say that it is a waste of time for the traders in Africa’s vast open air markets to wait for their respective governments to come to their aid. But just when I prepare my pen to say this I realize that the market traders, just by virtue of trading outside of the confines of the formal market, are already asserting their independence from state direction by taking 100% of their business outcomes into their own hands-i.e. why pay taxes and or go through the trouble of lengthy business registrations if those taxes will be used to fund projects that don’t benefit them. In other words, the informal economies are a quiet revolt against unscrupulous state leadership.
But what can be done to empower this group of entrepreneurs who operate below the radar? For one, what is being done right now. We can continue to publicize them. For another, we can go a step further and consider them as business partners for which to purchase from or help us get products to the market. If one really stops to consider it, we have already been buying from this sector, but have been going through layers of middlemen. But with the world shrinking technology at our disposal it is now possible to side step the usual suspects who buy from the informal market and sells the product to someone else who then sells the product to the rest of the world.
One example is in the tourism industry. I have heard of several informal movements within at least two African nations whereby small, local groups who historically have been marginalized by local gov’t in tandem with larger market players have teamed up to cut out the middle man who come to visit their neck of the woods-I have heard of this is happening mainly within the lodging and restaurant sector of the tourism industry in S. Africa and in Kenya.
August 12th, 2007 at 3:22 am (#)
[…] Emeka, Omodudu, Imnakoya, Mr.K, Hash, Robert Shaka, Adjetay, A B Kargbo, J Arrey, and Nii Simmonds are just a few of the names which have contributed to the thoughts and discussion on Africa’s informal economies. Now someone that I have corresponded with several times on this topic with is Whythawk-aka Mr. Gavin Chait. And if you are a.) from South Africa or b.) a follower of development economics in Africa then this fellow needs no introduction. However, I still thought it appropriate to include a snippet of his bio before proceeding: Gavin Chait specializes in economic and enterprise development. He both creates systems for economic and business generation and then project manages these through the implementation phase. […]