Can small business save Africa?

dambisa20moyo1Some of you may have come across Dambisa Moyo’s book, “Dead Aid” in which she draws our attention to the problems of aid dependency in African states. The Zambian economist highlights the poor track record of aid in Africa, pointing out that in the 60 years of aid-flow to the continent, the average number of Africans living on less than a dollar a day has risen from 10% to 70%. Her focus is not on the humanitarian assistance that provides much needed support in times of famine or war, but on government-to-government aid that, claims Moyo, traps countries in a culture of dependency.

Although her book has drawn criticism from pro-aid groups, it highlights the potential role of the market in helping Africans influence their own future. I was reminded of this when I read about an Ethiopian entrepreneur Bethlehem Tilahun Alemu (see Guardian on-line 3 Jan 2010). She’s set up a company called Sole Rebels and recycles old truck tyres, adding colourful cotton and leather uppers to rubber soles to create designer footwear. Alemu produces up to 500 pairs of shoes a day from her factory (read ‘house’) on the outskirts of Addis Ababa and employs 45 full-time staff, exporting products to as far afield as Canada and Australia. Five years into the business, her 2010 revenue target is an impressive £300k and her long-term goal is no less than to be the ‘Timberland of Africa’.

In states where the average annual household income is often less than £300, such entrepreneurial ventures provide a vital life-line for local families. Capitalism has its shortcomings, but it seems possible that businesses such as Alemu’s (and many much smaller than hers) may hold the key for the long-term prospects of developing countries.

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