A recent article in Wired UK, “Hype Around NGO-funded apps is stifling Africa’s innovation”, has sparked a long overdue debate about the role of donors and NGOs in supporting social enterprise and the innovation ecosystems across the continent.
Here’s a review of the discussion in chronological order:
- Hype Around NGO-funded apps is stifling Africa’s innovation
- Is there enough funding for startups in Africa?
- Africa is my home, Africa is not for sissies
- Silicon Savannah must be careful of hype
- ‘NGO’ Money: really?
- Builders vs. Talkers: The Fallacy of the Grant vs. Investment Debate
A lot of valid points have been raised so far. But, the deeper issue remains untouched: the imperialism of aid into more and more areas of life on the African continent.
Aid is no longer just for [insert images of starving children with flies on their faces]; aid is now for entrepreneurs and makers. Apparently, everyone in Africa needs your help!
The compassion is beautiful, but unfortunately it is completely misguided. The mentality of “help” is one of the greatest problems facing this continent and it is stifling innovation. “Help” and aid is antagonistic to the creative confidence, the dignity, and the mentality of self-help that engenders innovation, enterprise and sustainable development
Don’t get me wrong. This is not an attack on “NGO money”. Grants can and do facilitate change and accelerate progress around the world. But, grants can have negative consequences for the private sector and for innovation ecosystems, and I believe that we should be discussing this openly.
Grants are neither a necessary or a sufficient condition for innovation, and they often end up creating perverse incentives and delaying sustainable development. In this article, we highlight the risks of grant financing and propose an alternative way for people to get themselves and their money involved.
Dependency is Not Development
“The purpose of aid is to no longer require it” — Paul Kagame
Aid without ownership and accountability creates dependency. Much of the rhetoric around support for the private sector focuses on empowering individuals, which is ironic because grant support is often disempowering.
In response to this debate over “NGO money” in the tech ecosystem, one of the leaders of a tech hub in East Africa suggested that without it we wouldn’t have hackathons. This is not true.
I have heard similar justifications from people and organizations who organize events “for the community” in Kigali and who claim that if they don’t pay participants, then they won’t attend. Wherever you are in the world, if people don’t want to attend a community event without a financial incentive, food, or transport, then the event is not serving the community; it is serving the organizer. Call it what it is: PR.
The ecosystem should be responsive and accountable to its members and customers, not to M&E frameworks imposed by outsiders. If you have access to a computer, what is stopping you from getting together with your peers any day of the week to code? Unfortunately, the dependency mentality that makes people believe they “need” money to host a hackathon is very real.
Emergency humanitarian situations aside, people don’t “need” grants to do anything. Grants should support existing initiatives, communities, and movements (following rather than leading the market). In other words, grants can make your hackathon better, but they can’t make your hackathon.
Risk 1: Grants can create or reinforce dependency and the dependency mentality.
Grants are Different from Investment
A dollar is a dollar…but where it comes from matters for the ecosystem. In response to this debate, another leader of the East African tech scene suggested that grants and investment are somehow the same.
I know what it’s like to hustle to meet payroll and other bills. Village cleaning fee of RWF10,000/month? Ok. For a business owner, a dollar is a dollar.
But, for the ecosystem, soft money can distort incentives. There are hundreds of industries in Kigali that are ripe for disruption, why should entrepreneurs and makers be focusing on what NGOs or foundations think is a thematic priority? Donors are now engaging in the failure-prone policy of picking winners.
It is a lot easier to make a deck for a pitch competition than it is to build a real business. Over a decade ago, a Kenyan friend joked that all the smart entrepreneurs went into politics. Is there a risk now that all the smart app developers will end up building hype rather than a viable economy?
Risk 2: Donors can usurp customers as the primary beneficiaries for entrepreneurs and innovators.
Grants can Undermine Business
If the risk of meddling in the entrepreneurial savannah were simply that the “entrepreneurs” wasted time building hyped up products that nobody ever wanted, then it wouldn’t be so bad…at least it’s educational. But, entrepreneurs and innovations don’t exist in a vacuum.
Are you familiar with the donor practice of dumping food aid in non-emergency situations? Dumping of food aid can solve an urban hunger problem by creating a rural poverty problem. Social enterprise can be the private sector analogue of food dumping if we aren’t careful: supporting [insert target group] at the expense of the market.
Donors are everywhere these days. You can’t even start a bakery in Kigali without having to compete against free money. A group of college undergrads recently started a bakery in Kigali to “support vulnerable people”. The “social entrepreneur” bakers, who had no previous baking or food and beverage experience, are aiming to help poor people in Rwanda through high-quality pastry.
Social enterprise baking is not even a new idea: Jacqueline Novogratz, proponent of “patient capital”, started a social enterprise bakery in a suburb in Kigali over twenty years ago.
These students used grants and free technical assistance from abroad to build their new bakery in Kigali, which is taking business away from existing bakeries that were started with investment. In other words, “NGO money” is being used to undercut legitimate Rwandan business people and their vulnerable employees.
This is an anti-trust issue that our policy-makers should be talking about. In a country with about 37% poverty and widespread under-employment, a large percentage of staff at many establishments, including The Office, are vulnerable whether that is an intentional HR policy or not. The pre-existing bakeries in Kigali employ vulnerable people and support their communities through the multiplier of purchasing from suppliers and reinvesting profits.
If donors want to support “high quality baked goods” and “vulnerable people”, competing with existing bakeries directly is surely the wrong way to go about it. The same can be said about pumping money into tech companies at the expense of their competition.
The biggest risk I face doing business in Kigali (running a for-profit coworking space and innovation hub) is from non-market competition.
Risk 3: Grant-based support can undermine the market.
Our advice: Stop ‘Helping’, Start Doing
“Don’t blame me, I was only trying to help!” Heard that one before? This expression is so natural, it is the first example given in the dictionary for how to use the infinitive (“to help”) in a sentence. This common phrase indicates what happens when we “help” someone:
- Kantian Ethics: the helpers are morally justified in their action—despite any negative consequences for the recipients—because they are acting out of good will or based on self-prescribed duty. Aid money can have negative consequences, and donors should be held accountable.
- The “helper” engages in othering. There is immediately a distinction between the donor (the provider of help) and the recipient (the receiver of help—the “other”). At best, this process of othering is ignorant and patronizing. At worst, it is racist. Replace “Arab” with “African” in Edward Said’s famous discourse on Orientalism to get the idea… The African continent is so regularly viewed as the constitutive other that for many people around the world, Africa is a singular place with a singular people who have a singular economic condition (poverty). This could not be further from the truth. There is more genetic diversity between ethnic Africans than within the rest of the human population combined. As elsewhere, unfortunately, there is a widening gap between rich and poor. There is also more cultural and linguistic diversity on this continent than in all of Europe and the Western Hemisphere combined. Africa is not a country… We are all individual homo sapiens. Dig it!
Africa is oppressed by anyone and everyone who treats this place, its people, or its leaders as less than or different from anywhere else. And, as Steve Biko famously said, “the most potent weapon in the hands of the oppressor is the mind of the oppressed”. Development is not about having something, it is about being something. If the process of giving support to a person undermines that individual’s dignity, self-confidence, or self-reliance, then it is a blessing worse than death.
There needs to be a mental shift in the way people think about “making the world a better place”: If you want to help someone, help yourself.
If you want to support innovation in “Africa” and you want to build appropriate solutions to improve people’s lives, then be a part of someone or something awesome (don’t “help”).
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We have bootstrapped a coworking space and community innovation centre in Kigali, Rwanda called The Office. What started as a small room for 12 people one and a half years ago now spans three floors of an office building and includes a diverse mix of entrepreneurs, artists, freelancers, and NGOs. So far, this has all been built without grants. Instead we are the expression of our members — a product of their energy, time, and patronage.
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