Religious Masses

I've been looking for this video for ages... The video says it shows 2mn people in an open air church service in Lagos at one time. The way the video looks I believe it.

Massive, outdoor services are happen regularly here. One, at the Redeemed Camp, is organized by the largest evangelical church movement in Nigeria, and happens monthly. People joke that if Redeemed did an IPO it would be the one share they buy. But more on the church later, first of all one has to admire the sheer scale of the movements...

Star Commercial

Star is Nigeria's national beer. Even though it's now owned by Heineken it still comes straight to mind when people think of beer in the country. As in, "Let's go have some Star and Suya".

The brand came out with a pretty cool commercial recently (well maybe year ago but I've never seen it!). It evokes the "good old times" (if ever they existed), playing a popular highlife tune and shows a bit of the colourful reality of the country today. A proud, spirited, happy people living in a beautiful country too often ignored. Our Lagos.

Our Lagos

OUR Lagos is beautiful and positive. I've thought a lot about how to put it in words: The energy, the culture, the reality of love and happiness and excitement all intensified by the contrast to the harsh realities of the city. The unending tiredness that comes from a overly hectic life, and the tranquility of a beautiful garden in the middle of the city. It makes me warm and fuzzy inside.

I want to scream it out to the world, but as you can see I'm not very good at that. I want to show everybody that our Lagos is not one giant squalor or full of playroom extravagance. Hanna, a friend that has just left did this in her own special way. We need more Hanna's. So from today, I'm going to start a new series of posts as an ode to Lagos, Our Lagos.

We don't ignore the hard parts of life in the city, but they get enough attention. There may be a rant from time to time. If there is, please ignore. Lagos' beauty comes in a thousand pieces; I hope I can piece them together for you.

PS: This mini-series has outgrown my blog, and I wanted to invite others to join the fray. As a result we've started a new site and posted all the posts there. Have a look.

Fuel Subsidies

The removal of fuel subsidies seems to be the topic of choice here in Nigeria at the moment:

On one hand you have a huge drain on scarce national resources, a large portion of which goes directly into the pockets of a bunch of sleazy players through anything from round-tripping (docking the ship and the subsidy, only to take it out again and re-register it for import and another subsidy!) to black market retailing (pocketing the subsidy and withholding the delivery until scarcity drives black market prices up which are then cashed in on).

On the other hand cheap fuel is pretty much the only tangible benefit the man on the street gets from his government. Many of my friends fear a social revolution if its removed. Mark my words, they say; remarks which are echoed by nearly every civil society organization out there - from Unions to the Nigerian Bar Association. Everybody is against it, apparently.

Its a sad state of affairs that the government really provides so little. Maybe it could provide more if it didn't 'chop' all the money itself in the form or reoccurring expense. That is to say - if we do cancel the subsidy, would the government know what to do with the extra cash?

But lets look at it rationally: In reality nobody but the oil lobby actually seeks the continuation of fuel subsidies. They:

1. Waste an awful lot of money. The IEA and others estimate that USD 409bn were spent directly on consumption subsidies in 2010, not to mention the indirect subsidies such as tax cuts. The American example, and the corresponding support for renewable is beautifully embodied in the graph published by ELI.
2. Make fuel artificially cheap, which in turns makes the renewable alternatives seem artificially expensive. Thus, they also distract investments into renewables, which would increase if the business opportunity were even more apparent.
3. Drain a scarce resource. The OECD estimates that if the subsidy were removed by 2020 globally, then the global energy demand would drop 5% and oil demand would drop 4.7mb/d, or around 1/4 of the current US consumption. The IEA estimates even higher drops.
4. Increase environmental pollution. The OECD estimates that the proposed removal of global subsidies by 2020 would reduce carbon-oxide emissions by 2 gigatons, about 1/15 of total emissions in 2011.
5. Hardly ever reach the people they are meant to. The IMF estimates that only 1 in every 6 dollars of subsidy reaches the poor, the rest gets lost in sleaze. 

So, lets cut the subsidy and see what happens. Maybe less support from government will actually make it more accountable to the people. Who knows? My guess though is that Nigerians will maintain their resilient nature and battle on through. The original stiff upper lip.  XHK69U9FVEPU

Where does Music come from?

I've always had a strong interest in how music originated, or rather the limited geographic sense thereof. In pre-literate society, which include most of Africa's early tribes and clans, music and stories carry added significance. This might explain why they seem to be more fundamental to societies here (although - classical cause and effect theory here - why would they need the literate traditions if their oral ones are so strong?).

The debate on origins of music are a never ending of course, and many clever heads that have much more to say on oral traditions than my rudimentary thoughts. In academia the area has been battling a bit for relevance however, especially in Europe I was told by Linda Braun (a Falling Walls Lab colleague), and suffers from chronic funding shortage. This seems surprising, given its importance and the unanswered cause and effect questions.

One way to up the relevancy levels is to bring the history of music that's more popular (though not more profitable) than ever back into popular conciousness. The best way to do that of course is graphics (who likes to read?). I have a huge map of the origins of jazz back in Germany, but I wanted to share the one below as a particularly good example...

Interesting that it comes from a travel agency. Maybe it will inspire more people to venture down the Chicago - New Orleans blues trail that Harry and I attempted way back. After all, that's where it all started ;)

Falling Walls

I'm doing something different in a couple weeks: Attending a conference on a topic that's not my own, just to break out of the box and see something else. There's no real desire for change on my side, neither am I intending to become omniscient over night, but it will give me a good opportunity to see what else is out there. Plus I get out of Nigeria, into Berlin, and get to see a host of fun things and friends. Win-win really.

As part of the scholarship I'm meant to present a Breakthrough of my own on the day before the real thing. I'm interpreting that liberally and hoping that few at the conference have heard of the BOP, let alone how to serve them, and am doing mine on "Breaking the Wall of Poverty Perception". The number of slides are limited so in this case not particularly descriptive. I hope you can make sense of them nonetheless. Comments welcome; maybe I can sneak in an edit before D-day. I'm planning to experiment with live blogging from the event - lets see how it goes.

Falling Walls - Breaking the Wall of Poverty Perception

View more presentations from Andre_Wegner.

On Creativity

Do you have any artistic friends that you see far too seldom and you wonder what they get up to because they don't often show you stuff? There's murmurings amongst your friends about whether they actually do anything? And then, pop, they appear with something beautiful, right there in a one-liner?

I do, and the product is overwhelming. It helps me remember that creativity is a complex process that works different for everybody and sometimes takes long, arduous, and twisty roads to get somewhere. Sometimes it stays hidden, but that's not to say it isn't there. Its wonderful, surprising and helps me keep my spark. And, it's always unique.

Anyway, before I ramble on:

Made of Sand from Bison Moon Project on Vimeo.

Where's all the money going?

Lots of time to think in Sri Lanka's tea plantations. Mostly... Has the "where's all the money going" story been fully told?

Basically, there's a lot of money coming into SSA private equity (and public ones too, I imagine, but there's some fact checking to be done there). It's coming from established forces that are raising larger commitments (Helios, EMP), big funds new to the market (Carlyle amongst others), local funders (PIC) and increasingly also private sources (Allen Gray is rumored to be starting something). This means a) that there's a lot more cash and b) it's coming from new sources.

But I'm beginning to doubt if they can spend it. Yes, some democratization is driving business climate improvement and yes, some valuations may be on the low side. But continued structural issues (strife, infrastructure and corruption) remain largely unchanged. Even if there are young hopefuls such as FHN or IHS they are still a) facing the same barriers as before (I'm sure Will can name one or two examples to add to the ones that spring to mind) and are b) still few and far between. Just look at Anders, who went from looking for pipeline to making it.

Can this change? Yes, of course. But it's likely to take far longer than a PE fund and its investors have the stomach for. Don't get me wrong - these investments can still do an immense amount of good. However, they're likely to have far more VC characteristics than investors seem to think, with all the risk, timeline, work, cost, and other challenges that go with them. Hopefully more money will bring a) (short term) valuation inflation that will benefit a few golden nuggets b) enforcement of higher management and corp gov standards c) give rise to a new entrepreneurial gold rush that can really help foster a deeper pipeline. But all that might not necessarily translate into profits now.

I hate to tell a bearish tale, especially in a bullish time for Africa during which international investors have little else to be bullish about. However, I've seen first hand how too much enthusiasm can backfire (haven't wee all in some way or another). Microfinance for instance was for a long time (over)-heralded as a saving force only to fall flat on it's face when empirical studies showed that it's output didnt match those lofty expectations. That's not to say that it does not do any good at all though that's another discussion. Fortunately the sector is still largely backed by public institutionals who move slowly and have longer term/non-financial objectives. The sector therefore has time to build a new brand or prove it's critics wrong. Given the 'new' funding base of African PE it's questionable whether the sector will have that luxury.

A Genoan revolution

The revolutionary instinct still sounds strong in Garibaldi’s city. At least that what hordes of posters advertising the latest post-punk antifascist concert make us believe. Underground and hidden from sight the standard-bearers are still alive and kicking however. Enter the Association Count Basie, an underground vault near the Station Principe. Its guarded against outsiders by an opaque reputation and a publicity strategy that, at best, lacks the full-frontal assault strategy of aforementioned poster. As a final instance of defence, the club is only open to members of Arci, which is, from what I can gather thanks to Google Translate, a cultural club with socialist leanings. While the former defences ensure a simple defence against invasion by tourists such as ourselves, the latter’s exclusivity is just one side of the story. Most importantly it allows the home of jazz standards to maintain a veil of revolutionary authenticity that I suppose must be a pre-requisite to acceptance amongst the city’s cultured elite. The membership card, once obtained, reminds the holder of their revolutionary obligations including liberty, equality and participation. That being said, revolutionary hallmarks seem to have evolved somewhat since Garibaldi’s days with the casual insertion of non-violence. 

Once inside, the old times come alive in quite a different way. Its blues open-mic night and BB King is played, so is Etta James, solos abound, guitar riffs pounce and every now and again there’s a wail from the corner of overenthusiastic spectators – oh, yea. This is the refuge of the self-proclaimed underdog in the city of the unsettled. There’s not a mezzo carafe in sight; we drink beer – not wine. Every worn-through woolly sweater and corduroy trousers, every unpolished trumpet and un-tuned guitar channels the memory of fellow outcasts that made the music great in its heyday. The music doesn’t quite live up to this vision but it doesn’t matter – the objective is achieved: Jazz in its standard setting.

 

That the recreation of heyday jazz bears its own revolutionary connotations despite the standard setting and music is clear to both the regulars and to us, the unwanted casual outsider. I suppose that’s partly why this particular vision is chosen. So it’s a relief when the godfather, a balding 40 year old who seems to run the show, gives in to his revolutionary upbringing and calls a 12 year old on stage (see slightly blurred photo below). The kid pulls off a solo like he’s Jimmy Hendrix and passes over to a slightly older student who maintains that BB King has lost his ‘Trail’, not his ‘Thrill’. The incorrectness is reassuring; all is not quite right despite the standard setting. Genoa will go on revolutionizing in its own little way.

Big Ticket Items

The new World Development Report touches on something I've been thinking about for some time: The need to build environments where people and business can flourish, before adding the proverbial cherries on top - infrastructure, education, finance etc.

The report's data shows that fundamental settings matter to progress. No amount of microcredit, health spending or agricultural value chain development matters if there is no peace, as the graph makes clear.

With all our fancy new initiatives that drive business thinking into every livelihood angle we can think of, we seem to have forgotten the basics. Maybe forgotten is unfair - de-emphasised maybe. For me, there are three learnings here: 

1. There are limits to human resilience: This is clearly the cause of violence in the first place; the point the pain of violence comes second to the pain of injustice (although, as the report indicates, people may underestimate the cause of violence). But it also the underlying principle of underachievement in violent states; resilience and ingenuity of people matters not if there is no stability and environment where citizens can "make do".

2. There seems to be a Elementary Hierarchy of Development Needs, which we would do well to remember before designing other well-meaning interventions. I know this is nothing new, but the plethora of conflicts and the increasing issues they generate seem to stem from them seems to indicate that we haven't learned the lesson.

This hierarchy is a key learning I gained from my transition from India (a stable and 'fairly' well functioning environment where the most blatant structural issues have been overcome), to Nigeria (a 'fairly' unstable environment where hardly any structural issues have been dealt with). In India, my work with SMEs, microfinance and other 'social' enterprises, made me feel as though I was adding something to the country. In Nigeria similar, more innovative work (in relation to other stuff that's going on), makes me feel as though I'm running my head into a brick wall.

3. Simple is best: Our apparent preference for micro interventions in recent decades (following years of focus on structural issues), has led to the relative neglect of big issue topics such as corruption and infrastructure development. The WDR reflects this when it mentions the number of laws (244) that the government has had to pass and repeal.

Clearly, where livelihood solutions reduce poverty and injustice they foster peace and thus create a virtuous cycle. Indeed, the report shows clearly that poverty and injustice are the main causes of violence. But people can create livelihood solutions themselves, and too often intervening in/subsidizing those initiatives creates dependencies that then create at least the appearance of injustice. With limited resources at the disposal of development organizations we must concentrate on the big ticket items that can get people to a place where they can determine their own future. This is the same premise the microfinance industry built its reputation on - give people what they need to make their own lives better. Fortunately they can (already do, through loan sharks even where 'modern microfinance' doesn't exist) supply these services themselves. Unfortunately, the cannot do so for structural issues or peace.

NOTE: Neeraj Swaroop, regional chief executive India and South Asia, Standard Chartered Bank maintains that livelihood solutions might have no effect if the underlying requirements aren't there to start with:

"A lot of the accounts are dormant and not activated because there's no credit as those people are really poor," he added. "You can't have financial inclusion go ahead without economic inclusion and if those people don't have access to roads, electricity, [a steady stream of income]."

HT: NextBillion

Juju in Lagos

Favorite story of the week...

 

published in Business Day, today

Critical infrastructure

What happens when services provided by private companies become critical to the nation? First off, governments start paying more attention to you. They may monitor and protect your facilities and supply lines, as Wikileaks showed. But companies also stands in the duty to ensure the provision of these services is widely available if required.

Mobile phones are a great example of this. State run telecoms monopolies have been undermined by mobile networks, although some have been reigned back in as the case of pro-Mubarak messages in Egypt showed. Largely they now stand a as a bulwark that allows people to communicate, even if everything else falls apart.

That's if you can get hold of phone credit. Most people who first come to Lagos are astounded by the plethora of recharge retailers that sell their ware for a 3% margin. They are everywhere. However, if there is violence or even war these guys would disappear pretty promptly I'd imagine, or people might not be able to go on the street to buy any for fear of being shot, or they might not be able to afford any because they haven't earned their day wages due to the unrest or there's simply no currency available. These factors certainly seem to be the case in Ivory Coast, even though credit is more desperately needed than before to get in touch with loved ones or update everybody on events (maybe using Twitter). Now, after a campaign started here and promoted here, Orange is the first provider to commit to free credit. According to Ethan Zuckerman, they are:

giving credit of 2000 CFA (a little under $5) to all customers, a week of free calls to a landline number of their choice or an Orange number and a week of free Internet access. Most touchingly, they closed their announcement (posted to their Facebook wall) with this statement:

Par ces gestes de solidarité, Orange Côte d’Ivoire et Côte d’ivoire Telecom apportent leur soutien à tous leurs clients pour leur permettre de garder le lien avec leurs proches en ces moments difficiles.

(Rough translation: With these acts of solidarity, Orange Côte d’Ivoire is providing support to all their customers to help them stay connected with loved ones during this difficult time.)

HT: Ethan Zuckerman