Chinnery-Hesse government and telecom relationships destroys African businesses

Jim Forstner, Cisco engineer extraordinaire and wireless network advocate, uses 15 seconds of a 3 minute talk to read the title - “Railroads, Highways, Telecoms, the Internet and the African Digital Divide.” Railroads are closed systems - they own everything, and everyone else is a customer. Highways are different - governments and occasionally private companies build them, but vehicles are owned by corporations or individuals. There’s a great diversity on the highways as a result, multiple uses and more innovation.

The telecom system is like the railroad - you may own the equipment within your office, but the company owns the rest and you’re a customer. But the Internet is a network of networks, a diverse system with hybrid ownership. In Africa, telecom companies are trying to make the internet like the phone system. Governments need to abandon their cozy relationships with telecoms, and recognize that internet backbones are public goods, with roles for private sector activities. If we want to do something, we need to follow a piece of 60’s advice: “If you don’t like the network you have, make your own and connect it to the internet.”

Ghana’s Bill Gates, Herman Chinnery-Hesse, takes the stage not to talk about his work with tropically tolerant software applications, but to talk about “hunter and hunted” nations and their economics. Hesse’s company, SOFT Tribe, is a leading African software provider based in Accra. He began with the realization that a PC could be a factory for making software. Making software in his parents’ house, he bought PCs, hired more workers, and after ten years, found itself as “the leading software company in West Africa.”

For those first ten years, he avoided government involvement. But after expanding into Nigeria and Togo, he “decided to bite the bullet and face the government sector.” At this point, SOFT’s payroll system was the national system, used by everyone but the government. It sold for between $5,000 and $100,000 per installation. The government had spent £80m of money from DFID, the UK aid arm, to purchase a payroll system, which didn’t work. SOFT offered their tool for free, but the government refused. The ironic thing was DFID was using the SOFT system in their Ghana office.

Why do governments make decisions like this? They are still “colonial economies” - they can be divided into “hunter” and “hunted” countries. Hunters look for work around the world, and governments help them promote it. “There’s no advert on CNN saying ‘Buy Ghana! Buy Ghana software!’” - We’re designed to be a hunted country. It’s totally unreasonable to ask governments not to take the aid that’s offered to them, but it destroys local economies. When SOFT competes with a European software firm, the cost of that software is subsidized by government aid and the local business loses out. “The German government is both lining the pocket of government ministers and giving holiday jobs for some of its citizens.”

Hesse’s goal is to help reduce the Diaspora - he argues that his friends face a situation “where you’re either a thief or dirt poor.” He wants to see people in rural areas capable of being rich without leaving their homes, using the Internet to sell to a global audience. This would involve an online marketing platform, a fulfillment mechanism and a payment system using text messages. “We’re worried about axis of evil between governments and the telecoms,” so the system doesn’t rely on the telecoms to make the payment.

Chinnery-Hesse ends with his suggestions for the well-meaning westerners in the crowd:
- Help relieve trade barriers
- Unleash the power of rural areas
- Lobby against subsidies - they’re what are really killing rural farmers.

Link to African Path