Wednesday, May 14, 2008

Setting the Agenda for CC08

Showing up and telling Africans what they should do, or doing “it” for them, has not been working. They need ownership, not white elephants whose decaying carcasses are littering the African horizon. Africans needs the opportunity to secure their own future.

The solution:

By now, we have all heard the saying about “give me a fish and you feed me for a day; show me…”. Well, how about letting the Africans revolutionize their own fishing industry? By now they are rich in pent-up visions and creative juices. The opportunities are abound. What they need is the capacity to take ownership by unleashing their initiative; what they lack is the means- the financial resources, a stable source of credit to build their dreams. They lack access to microcredits.

According to Deutsche Bank, the microfinance sector currently has an estimated total loan volume of USD 25 billion. Yet, it is unable to serve more that a fraction (100 million) of today’s total sector demand of roughly 1 billion micro-borrowers. This situation translates into an immense funding gap estimated at around USD 250 billion.CC08 is suggesting we spend USD 75 billion annually.In 2004, the Copenhagen Consensus provided a cost-benefit analysis of treating the symptoms of the problem. Eradicating poverty by addressing the missing middle will bring the waterfall of development that Africa needs. The results would: increase market efficiencies, increase competition, lower prices of consumer goods, increase disposable income, increase consumption of primary health care and education, hygiene, reduce fear, reduce birthrates, increase transparency and governance of institutions, and modernize the commodity and financial markets.

Showing up and telling Africans what they should do, or doing “it” for them has not worked. They need to take ownership by their own efforts, not white elephants whose decaying carcasses are littering Africa.

The agenda needs to be reset. Africa is booming. Now it’s time to throw fuel on the fire.

See here how one Danish company is revolutionizing the way microfinance is done:

1 comment:

Hejnfelt said...

So you give the Africans microcredit and then what? Who wants to give credit to anyone in an area where property rights are more or less non-existent? I agree that microcredit could be part of the solution, but before anyone should give microcredit to africans a stable system for property rights has to be established.

In history free markets have best upheld the principle of property rights and without property rights in Africa no microcredits can be issued.