Friday, March 6, 2009

Reflection on six weeks spent in Tanzania

This is obviously a couple months after my trip, but I finally got around to doing this reflection and I wanted to share these ideas with anyone who is interested.

Having never been to Africa, my understanding of the continent and the global health dilemma came mainly from my prolific reading of The Economist.  Our trip was a little bit different.  It was really more about poverty than it was about health.  Yet these are intrinsically tied.  I was struck by what the Temeke Bustani Ward Chairman, a local politician said the first day.  When we asked about health, he argued that poverty was at the root of all problems, not just poor health.  My view is that is more systemic than that.  My six weeks in Tanzania with MAdeA provided a lot of context for what appears to be a systemic failure.  I say systemic because it’s clear there’s no single root cause.  Poverty is pervasive.  Poor health keeps people poor.  Corrupt or ineffective government keeps people poor.  Lack of access to education and resources limits social mobility.  And so on and so forth.  There are no easy solutions, but systematic thinking is required at each level, and management/leadership skills play an essential role in that.  

In my pre-trip reflection on what I expected to see and the role management would play, I wrote that I thought leadership and management were necessities towards building a more just and equitable world with social mobility for those who worked hard.  My time in Africa made me see how that vacuum has created poverty, inefficiency and despair.  Only with a very large influx of common sense management skills, transformative leadership and opportunity at all levels can Africa break its cycle.  

Understanding the root causes in Tanzania and Africa at large

Burden of disease

The burden of disease in Africa is borne by all.  First, there are those who are sick with HIV/AIDS, tuberculosis, malaria, etc.  But then there are also their family members.  Some must take economic time away from productive work to care for them.  In other cases, families are broken up, because of death, or the seemingly inevitable family breakup that comes with the HIV positive diagnosis.  That means children become orphans or can no longer afford to pay for school.  This doesn’t just affect them for that day, week or year – it affects the trajectory they will take for the rest of their lives.  

It’s clear that the health problem must be solved in Africa somehow, someway.  There is a lot of global foundation money in Africa working on this.  However, we must ask what would happen if that money dried up.  Would African economies and governments be able to support decent health care systems?  That requires stability and economic development.  We can only keep our fingers crossed on that.  It also requires sustainable business models.  That means revenue generating models, or organizations structured so that they can eventually switch to those models.  That requires strategic organizational design and a certain skill set beyond just medical skills.  It means building logistics, improved data and record management and leaders with vision.  

The Economics of Poverty

As someone who is interested in a future in government and policymaking, I can’t help but observe some of the economic factors that keep Tanzania impoverished. 

This first seems to be an incredibly inefficient government that is known to be corrupt and ineffective at collecting on taxes.  One number that was cited was that Tanzania only collects 3% of revenue from mining.  These companies are owned by foreigners (Chinese and South African seem to be the most common).   Tanzanian companies don’t seem to own anything or mine anything.  This is probably because none of them have the skill to do so.  In other locales, the foreigners might be required to provide training or hire a certain number of locals to work alongside, earn some wages and gain the competencies.  But in Tanzania, none of that seems to be going on. 

I think if Tanzania could get tax collection to the point where it is more efficient, they could shoot for an import substitution strategy in a few markets.  They have decent infrastructure around Dar es Salaam with a big port.  They also have a large enough internal market for a number of products to support multiple companies, which is key, because you don’t want monopolies.  However, I’m not confident in the government’s ability to properly administer this.
At a more micro level, there are some other interesting things that I noticed:

1) Tanzanians don’t seem especially entrepreneurial as whole.   Folks I worked with who had been in other African countries, particularly Nigeria and Kenya remarked on this.
2) Businesses are completely undifferentiated and lack economies of scale.  You see ten people selling the same oranges or fabrics right next to each other.  They buy separately.  
3) One of the most interesting interactions during our time in Tanzania was working with two 23 year old University of Dar es Salaam graduates in the MAdeA office.  I was struck by several things.  First was that they had almost no prospects for a decent job more than six months after their graduation.  
4) NGOs provide the best jobs.  The college graduates at MAdeA that we worked with were desperate to get in.  They hire the top graduates and pay them a lot.  But what happens when they leave eventually?  It also drains talent out of other sectors.  Corporations and governments just can’t compete.  I think in an emerging economy you want your best learning business skills and starting companies.   However, these NGOs are providing good training and solid jobs.  
5) Management and leadership skill is seriously needed.  I’m not sure how this can possibly happen though.
6) Perhaps before management, what is needed are systematic and analytics thinkers.   This is probably due to the education system.

The Hope and the Danger of Microfinance

MAdeA wanted to use a microfinance model (really charity couched as a “revolving fund” that had little chance of “revolving”.)  Governments and NGOs are selling microfinance as if it can cure all ails in the developing world.  I have some real concern about this.  First off, economically there are some microfinance just cannot help.   Very few microfinance models can help those who do not already have access to capital to start a business, since the most successful models manage risk in such a way that prevents those who do not have businesses.

Unfortunately, this is a dangerous thought to have.  These organizations like the required ability to run a program and do not have appropriate financing.  Furthermore, MAdeA’s goal is to help the poorest of the poor.  This includes people with HIV who can work only intermittently or not at all, and people in areas where there is simply no local economy to start viable business that will survive the time it takes to pay back a loan.  In order to offer these people a loan from a revolving fund, interest rates would have to be in the hundreds of percent.  Remember, it is not the case that any credit is better than no credit.  Give someone a really high interest loan and you are hurting them.   Either that or you are giving them a cash grant since there is no way they will pay it back.  

Local NGOs in Africa are in the strange position in that they have to deal with almost everything.  MAdeA’s focus was women victims of domestic violence and sexual assault.  However, working in this poor area of Dar meant that they also had to deal with AIDS, lack of education, lack of jobs, tuberculosis, malaria and drug/alcohol abuse.  However, these can all be linked to one overarching problem – poverty.  Thus the microfinance thrust.  However, the very bottom of the pyramid – the sick, the truly marginalized, cannot be empowered in this way without some very specific circumstances.  A deep well of resources, a new market and resourceful management is needed at a minimum.  MadeA as a small CBO simply could not offer this.
Closing Thoughts

Six months in Tanzania challenged my eternal optimism.  This was a real, gritty experience of Africa at its worst (and at its best, since I went to Kilimanjaro and Zanzibar).  It seemed at times that the cycle of poverty of suffering was unbreakable.  At times, it seemed like we weren’t getting through to MAdeA leadership, and that our bounty of deliverables (marketing materials, website, revised strategy, project description, so on and so forth) would go unused.  
It was incredibly rewarding to hear over the past three weeks from our client (and our American friend who is a volunteer there and reports back to us regularly) that the impact has been noticeable in significant.  

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