Monday, August 31, 2009

The Exodus Project

In the last few months a number of my friends have moved back home to Ghana from Europe and the US. This has been called a “brain gain” in certain circles but you had to believe there was a “brain drain” to start with. I’ve never really bought into the whole idea of the “brain drain”. Sure, there are exceptions. Consider the case of Ghanaian medical doctors where statistics show that 5 years after medical school 85% of our medical doctors leave Ghana or the other statistics that show there are more Ghanaian tax-payer trained doctors in New York alone than in all of Ghana. These are not people you can replace with ordinary people on the streets.

Have you ever wondered why only African countries have a “brain drain” problem? Me too! I believe some development economist woke up one day and decided that “these Africans are so poor because all their smart people have left the continent”. Just think about this scenario, assuming New York City and California (America’s best and brightest) ceased to exist. Long before the dust settles another Wall Street will rise in Omaha, Nebraska, another Silicon Valley will rise in the mountains of Butte, Montana and Hazlehurst, Georgia will the new Hollywood. So don’t tell me nothin’ about no “brain drain”. We are poor because we haven’t figured out progressive ways to run our lives. But I digressJ!

In the past people moved back to Ghana for seemingly altruistic reasons to “help Ghana develop”. They will make history by helping make Ghana the Sweden of sub-Saharan Africa. Instead, they end up in government positions and get rich overnight.

Needless to say, the tides are turning and I am excited about this exodus of young Ghanaians from the US and Europe back to Ghana. For the first time in our lifetime the almost-depression-recession has made Europe and the US seem less of a sure and stable place to make a living. Tangible recovery in the economic situation in the west is not visible for another 5-10 years. For all these people and many more who are packing their bags as we speak, moving back to Ghana has become an attractive option. Quality of life in Ghana is unparalleled, add the prospects of making decent money working in the private sector, starting a business, or manning the family fortunes. There’s true upside in Ghana.

In the next few months I’ll profile some of these people under “The Exodus Project” title. Watch out for it!

Friday, August 14, 2009

Post-Racial America has Ghana in it

First it was Barack Obama, now it's Ruby & Sam. Somehow, this post-racial America (like most things great and progressive) had to have Ghana in it :)

Ruby Amanfu was born in Ghana and moved to Nashville with her family when she was 3. Sam Brooker grew up in Green Bay, Wisc., and answered Music City’s siren call after finishing college. They each spent years pursuing promising solo careers (Amanfu had a hit single, “Sugah,” on the U.K. pop charts in 2003) before becoming an official duo in 2005

Their music was featured in the movie "The Secret Life of Bees" starring Dakota Fanning, Queen Latifah, and Jennifer Hudson.

They've been interviewed by several news organizations. Check out their interview on NPR.

Check out their official website
Photo from: The Tennessean

Monday, August 3, 2009

"Blue Kiosk" Economics

According to US Small Business Administration approximately 80% of all US businesses are small businesses. It goes without saying that the largest economy in the world (although it’s wobbly right now) is driven largely by the small ice cream shops, the mom and pop retail stores, the little Chinese restaurants, the soul food restaurants, and the small start-ups in Silicon Valley etc.

It is safe to assume that the Ghanaian equivalent of a small business is your typical “Blue Kiosk” or “Trader”. They buy and sell. In most neighborhoods the Blue Kiosk sells Milo, Milk, groundnuts, Akpeteshie etc.

Have you noticed that most small businesses in Ghana think in terms of Revenue and not Profit Margins? Let me explain:

Assume a Blue Kiosk owners buys “Ideal Milk” from a wholesaler for 2.00 GHC each. She sells it at a retail price of 2.20 GHC. I am convinced that the typical Blue Kiosk owner in Ghana thinks she just made 2.20 GHC all her personal expenses for the week will be paid for with this money.

In fact she only made 0.20 GHC (20 Pesewas). It’s even less than 0.20 GHC when you consider the time value of money i.e. the time between buying from the wholesaler and when she finally sells the product. If Blue Kiosk Owner is to live on 1.00 GHC per day she has to sell 5 tins of “Ideal Milk” everyday. To make 2.20 GHC she has to sell 11 tins of “Ideal Milk”.

Unfortunately, not only blue kiosk owners think like this. It runs through our culture. It’s also the building contract who gets a contract and the first thing he buys is a Mercedes Benz. If he really considered his financial obligation i.e. kids school fees, electricity and water bills, 30% bank interest rates, living expenses etc Mr. Contractor will quickly realize that not only can he not afford a Mercedes Benz he can’t afford a car at all. Have you ever wondered what kind of profit margins the street vendors make? Me too. Why are they still there on the streets when there are so many other business opportunities that have better profit margins? The answer is simple. When they sell an apple they can see cash in hand.

I look forward to the day when a University of Ghana Business School graduate with a Bsc. Admin (first class) will start a “Blue Kiosk”. Expand to 5 Blue Kiosks take over a whole neighborhood and hopefully become Ghana’s home grown Sam Walton (Wal-Mart) instead of sitting around waiting for an opportunity to work in the bank as a teller. That will be the beginning of a new day in Ghana.