Week #11 Mobile Technology and Advancing Sub-Saharan Africa

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  • The thousands and millions of people around the world who suffer from poverty in many cases lack even the access to any sort of banking or financial intuitions. This is a important problem that needs to be addressed as one of the best ways for the poor around the world to start off on a stable financial future is being able to rely on and use types of banking and financial services. These “Poor households need financial tools to help them cushion against risk, build assets to secure their family’s future and manage daily household cash flows. Because of their precarious situation and unreliable income, the poor need financial services even more than the non-poor simply to survive from day to day” (Grameen Foundation). One group that sees such an importance in giving access and helping create solutions for the poorest peoples financial needs is Yunus Grameen’s Bank model. His model takes a twist on traditional banking and instead of using normal tactics they are implementing a number of strategies in Sub-Saharan Africa to help the region including mobile phone technology and allowing borrowing without collateral. The organization is also in implementing better health and agricultural technology and innovation to help these countries along with the aid in banking. In Ghana in particular they have implemented a mobile technology for community health, which has had a very positive impact on “sexual reproductive health to youth and information on farming techniques and weather reports to smallholder farmers”(Grameen Foundation). With the implementation of mobile phone technology it allows rural and poor populations access to previously unattainable information that is vital to their advancement. Ghana has benefited from mobile technology and will continue to do so in the future. In Kenya the Grameen Foundation has used mobile phone technology to provide a “microfinance institution that provides fully automated, mobile phone-based banking services, to expand its services to rural areas.”(Grameen Foundation). With this technology these rural areas can take advantage of market information when selling grain in the market and use the new banking services to help their family’s future stability.kiva_121x64 KIVA is another organization that is using mobile technology to help fight poverty and bring financial services to these poor people especially in Sub-Saharan Africa. “Kiva lets individuals lend as little as $25 to help create opportunity around the world”(KIVA). Even access to such small amounts of funds will have potentially large impacts in creating jobs and future wealth of the money lent. These two organizations are using mobile technology to bring financial services to people who have had now such access before.Dambisa_Moyo_Black_Presence_UK
  • Moyo discusses three interlinked stages to become aid independent. First “comes an economic plan which reduces a country’s reliance on aid year on year.”(Moyo 145). A country cannot simply go from receiving thousands and millions in aid then stop at the drop of a hat without taking steps beforehand. Second the country must change its habits to prevent itself from living beyond its means. If it can follow the financial rules and regulations that have been established on the global market the ability of the country to receive lending and investment is much greater. This also prevents corruption as these governments will no longer have money streaming in and if they take what is lent and spend it in an unethical way no one will lend again and the regime will fall. Third to accomplish the plan of Dead Aid is the strengthening of institutions in these countries. These are different from Sachs proposal because he doesn’t think the poor countries have been given nearly enough funds to even attack the problem of extreme poverty. While he would also call for improved accountability in institutions the whole basis of his philosophy is the rich need to give at least what pledge to even make a dent otherwise its like throwing a rock in a ocean doesn’t do much to fill it up. Extreme poverty abroad can be damaging to our nation as it can disrupt international financial markets by the government making money of one commodity while not helping its people. This undercuts the rest of the market while only helping the few elites financially in these poor countries. Poverty also hurts us because it allows dangerous regimes and lawlessness to take over like the problem with the Somalia pirates. They have no other means to make a living in their view so go to extremes to get what they can.
  • Herman Chinery-Hesse is not an advocate of much of the aid that Ghana gets because it takes away the potential for African companies like his to get any market share when NGOs and the like are willing to come in and do it for free. When these local businesses can’t compete because of NGOs or other aid development projects it does not allow the locals to prosper and expand business. No business will have success if someone will come in and undercut you by doing it for free. Also when large wealthy countries give aid even for infrastructure projects they try to get companies from their own countries to fulfill the project. While Andrew Mwenda has a different view on how aid should be dealt with in Africa. He believes that aid in medicine and such things do benefit the people they do not create wealth and that is the problem with aid where it is going. He does not think the aid is going to the places it should, he thinks it should go to the job creators in the countries. Small business owners and traders who can use these funds to grow their businesses and promote jobs and wealth creation in these poor areas. This is how aid can create sustainable wealth and pull these people out of the troubling situation they are in.

 

Dambisa Moyo Dead Aid                               Part II                                      pp. 126-154

Jeffrey Sachs The End of Poverty                   Chapters 17 & 18                     pp. 329-368

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