What's Keeping Africa's Craigslists from Scaling?
From what I can tell, the dearth of East African craigslists (Google Trader in Uganda; N-Soko and others in Kenya) have not yet gone to scale, and few are utilized outside of capitals (I remember Google Trader having more SUVs than matoke listed).
Is it simply a matter of time before this applications reach scale, or is there a deeper structural problem? Perhaps some insight can be gleaned from the research described in Fletcher School economist Jenny Aker's Boston Review piece 'Africa Calling'.
Professor Aker writes about how mobile technology profoundly changed the Nigerien millet market:
In Niger, millet, a household staple, is sold via traditional markets scattered throughout the country. Some markets are more than a thousand kilometers away from others with which they trade. The rollout of mobile phone coverage reduced grain price differences across markets by 15 percent between 2001 and 2007, with a greater impact on markets isolated by distance and poor-quality roads. Mobile phones allowed traders to better respond to surpluses and shortages, thereby allocating rains more efficiently across markets and dampening price differences. Mobile phone coverage also increased traders’ profits and decreased the volatility
of prices over the course of the year.
While this is striking evidence for the economic utility of mobile phones, its notable that this is a story about vendors not consumers. To imagine what a similar transition might look like for the average wananchi, I thought back to last May, when I sat at the Kenya School of Monetary Studies, listening to a Googler talking about a vision of a more connected Africa. The vision involved individual consumers in rural villages, using mobiles, connecting with traders in surrounding villages to get the cheapest price for commodities, paying for them over the phone, and having the goods delivered.
Am I impatient or is there a deeper structural challenge keeping such a vision from reality? Is it a verification and trust issue (should M-Pesa users have ratings? should there be mobile-based escrow accounts? Is there some sort of credit card equivalent?), an application issue, a behavioral change issue or an SMS pricing issue? Something to ponder.
Labels: east africa, technology policy
Joshua Goldstein is in search of the best route to bicycle from Kampala to Capetown.