Tag Archives: Esoko

Going to the Market? Check Your Phone First!

USAID is using mobile phones to heighten market awareness in rural Malawi. This particular article centers around the success story of Sara Maunda, a village farmer in Malawi who used USAID technology to maximize profitability of her products in the regional market. The provision of relevant economic data to farmers represents an increase in access to information, and a general shift toward a information society relevant to city and rural people alike.

Maunda adopted the technology in June 2011, and witnessed results almost immediately. That summer, a traveling salesman approached her and offered to buy Maunda’s shelled groundnuts at a price of  K30 per kilogram. Before completing the transaction, Maunda used her mobile phones to check commodity prices in other local markets. What she found: the same groundnuts had sold for K120 per kilogram the previous day in Lilongwe, a nearby village. Realizing the disparity, Maunda took her product to Lilongwe and earned approximately $130, as opposed to $27 offered by the traveling salesman.

Esoko, the Ghanian company which operates the mobile market initiative, is relatively cheap to purchase and operate, and has enormous potential to lift rural farmers out of poverty. Middlemen, such as the traveling salesman in the story, are notorious for approaching rural markets with unfair prices. Often, these transactions occur with no reaction or consequence, because the individual selling the product is not informed of the value of their product. I think that this product is extremely promising as a means for farmers and artisans to maximize their profitability. The software shows where the demand is high, and users can exploit these markets. Every individual deserves fair and realistic compensation for their efforts, and this technology is an important step in poverty alleviation.

Sara Maunda using her mobile phone to check market commodity prices.

I have a couple questions/comments about the overall effectiveness of this program as a cure-all, however. Here are some reasons why the project might fail to be embraced by the target population:

1) This project only helps individuals who have the ability to reach other markets. it makes commodity prices in local markets more transparent, but does not offer a mode of transport TO these markets. Often, rural farmers do not have the ability to reach the more lucrative, urban markets and are, rather, forced to settle for less compensation in their home villages.

2) This project is effective for maximizing profitability of non-perishable items, such as the groundnuts from the story. These items can undergo the often strenuous transport to other markets, or they can survive in storage until commodity prices rise to desirable levels. Such is not the case for perishable items.

Overall, I think that this project is very valuable, and should continue to empower the rural power. However, for it to truly lift individuals out, it must work in coordination with other development efforts, that would provide storage and transportation opportunities for these individuals.

Read the article here.

Esoko’s Demand-Driven Success in Bringing ICTs to Africa

Across the board, most development practitioners would argue the bottom-up approach is more successful than the top-down approach in regards to development projects. The main reason for this is sustainability. The following blog outlines Esoko, an organization that brings the “market” to Africa. They focus on tools for market and agricultural information via mobiles and ICT. Their success is largely due to the fact the organization is demand-driven as “60% of Africans earn their living from working in agriculture, a sector so underserved in terms of technology solutions”. Additionally, Esoko uses the bottoms-up approach. The idea was not pushed onto the people, rather the idea sprung from the people and their needs. Mark Davies, the founder of Esoko, saw the benefits of putting street markets into the viral atmosphere. Esoko hires locally, employing mostly Ghanaians and West Africans.

The organization uses the increase in mobiles and ICTs’ in Africa to their advantage. The services and apps Esoko provides are SMS messaging, market price alerts, inventory reporting, SMS bids and offerings and maps. The model they use “starts with government or donor funding and then transitions into a business; a franchise that can grow into a sustainable company”. They have started working in Ghana where local businesses are using Esoko. As of right now there are franchises and resellers in Ghana, Nigeria, Mozambique and Malawi. Many other African countries are using Esoko via government funding (North Sudan and Nigeria), while even more are funded via donors (Burkina Faso, Mali, Ghana, Tanzania, Madagascar, Uganda, Malawi, etc.).

In regards to monitoring and evaluating, “In November 2010 a survey of 62 farmers in Northern Ghana who have been receiving price alerts for one year confirmed that they have benefited from the service, with an average improvement of 40% on reported deals and revenue.” As stated before, their success is due mainly because of their bottoms-up, grass-roots approach. Why do practitioners continue to push top-down approaches onto governments and other NGOs  when bottoms-up projects tend to be the most successful?