Can the Informal Sector in Africa use Digital Platforms to Leapfrog ?

Digital Platforms in Africa: Can the Informal Sector in Africa use Digital Platforms to Leapfrog?

By Ben Roberts, CTIO Liquid Telecom

An innovation, a viral tweet, the story begins there. 34 seconds that potentially changed the fortunes of Innovative Nairobi Craftsman, Stephen Odhiambo.

Innovative Nairobi Craftsman, Stephen Odhiambo who created a moving seat designed to act as park bench when folded, and a table seat when unfolded.

Ngong Road, Nairobi — Known for being a hotbed of innovation, is home to the tech startups and innovation hubs that have grown up around the site of the original Nairobi iHub, to become what is commonly known as Kenya’s “Silicon Savannah”.

But as my friend Bobby Yawe once said, when defining the scope of opportunity for innovators, “Ngong Road goes all the way to Ngong”. Local Inventor Stephen Odhiambo, carves out his craft somewhere in between, just south of Junction mall in the area that doesn’t seem to have a formal name but is known by all as “Ngong road where the informal sector sells furniture”.

It seems appropriate therefore that this story is somehow an intersection of the digital world, and the world of artisans, or “dua kali”, hand-making their high-quality furniture wares which fill the homes of Nairobi.

Stephen’s invention, not necessarily unique was inspired by the vast resources of the internet where Googling “folding bench table” will reveal many search results such as this.

But you don’t have to be the original owner of an idea, to make a world-beating and quality product. When I left University, I was excited to get the job of “Development Engineer” at a local electronics company. Only to discover that the main problem the company had, was that it had been first to market with this particular device, but was losing out to Chinese competition who could make the devices smaller and cheaper.

My first assignment started with competitors products and a pot of very strong acid, and in the lab, I would meltdown the superior Chinese ‘replicas’ of our product, and then would improve further our product by making it smaller, better, more energy-efficient than the competitors. This is what we sometimes call ‘evolutionary innovation’ and the process I followed is known as ‘reverse engineering’.

So Stephen’s invention and innovation were to work out how to make this garden bench that folds out into a garden picnic table, using the materials and manufacturing techniques that he had at his disposal in his workshop. What turned out was a fully working folding bench/table crafted with high finish wooden slats on a metal frame, looks amazing!

I am told that he sells the table for KSh 25,000 (about $250 USD) and it takes him about 4 days to make. For those that don’t know the Ngong Road furniture strip(I used to drive past it every day before working from home set in), it is about 3km of straight road, completely lined with furniture workshops that then sell their wares as close to the main highway as the authorities will allow, even clogging up the pavements.

If a shopper like me was to buy something there, I would most likely distantly see a certain product several times on my daily drive before stopping, or I would go to the place I normally go. Its highly unlikely I would have ever spotted the table/bench or seen it stand out in any way from the hundreds of other tables and benches that are fixed in their use case.

So then the tweet. Stephen decided to make a video with his smartphone, demonstrating the opening and closing from bench to the picnic table in a 34-second clip and shared it with a few WhatsApp groups that he has with his clients and peers.

As the video was shared on these groups it reached the attention of Mombasa based travel/tourism mogul, Mohammed Hersi. He saw this as a wonderful example of the creativity and ingenuity of Kenyans and posted it on his twitter feed, to tell the world about the invention.

And then at the speed of light, with plenty of ‘clicks’ the tweet went completely viral, and so far has amassed 2.4 Million views, in only 6 days. I can only imagine how much Mohammed’s phone has been buzzing with alerts, and hope he has managed to keep his battery charged with such activity!

Following on from people inquiring where to buy this innovative piece of garden furniture, Mohammed then managed to trace back through WhatsApp groups to find Stephen’s name and phone number and posted that as a follow up to the tweet.

Stephen’s phone then began ringing off the hook, and just a few days later he has 800 orders for the bench, which amounts to an order book of 20 Million Shillings, or $200,000 dollars. Not a bad return on 34 seconds work….

Many people took to social media to say he needs now to protect his idea by patenting this, but my immediate advice to him would be to see how he can partner with other teams of artisans to scale up manufacturing to fulfill that order book as fast as he can!

A patent on an idea requires it to be provable to be unique, and being realistic, even with a patent in place, enforcing a patent (with courts and lawyers) would be near impossible in this informal sector that is in fact the backbone of a large part of the furniture market of Kenya.

So as a leader in the digital industry, I am really starting to think about how the digital economy can step in to scale up this informal sector. The phenomenon of the gig economy is growing fast and having its impact on employment rates, but very few entrepreneurs in this informal artisan sector are getting their web presence onto traditional platforms like Google, which indexes web sites.

Let me prove this to you, try putting “buy bird feeding table nairobi” into Google and see how many location pins pop up on Ngong Road, none at all, yet I used to see many bird feeding tables on my daily commute to the office.

These micro-businesses are not really grabbing my attention, and since I have now worked from my garden now for what seems like months, I have been thinking about buying a bird feeding table, yet I no longer want to get in the car and then explore the roadside markets, at this time when we are avoiding social contact. Online is definitely my first choice of where to find such items.

I picked up to call Michael Onyango, a fellow futurist in the tech world in Kenya, since we have had lively discussions in the past about scaling the informal sector.

Although I met Michael back in 2014 in a business meeting at Kisumu County offices, it is in the digital world of discussion chat groups, that we have become good friends.

Michael told me that he remains in a good number of WhatsApp groups of many different types, which are all reserved for the intended purpose of discussion, innovation chat, family gatherings, school reunions etc, and normally not for posting commercial adverts.

But with a group of like-minded chat group admins they host “ChiroFriday” where people can send their commercial product offerings to the admins, and they pick the best ones and then share them across a powerful platform of 8000 group members, in order to help these micro SMEs build up their own online social capital. He also agreed with me (since we have been hanging out and accessible in ‘cyberspace’ now for some time) that many more people have taken to being very active in participating in the online communities since social distancing has become “the new normal”.

A platform that has been taking Bangladesh by storm, and has partnered with Liquid Telecom in Kenya, GAIUS Networks, is a mobile app that seeks to build a hyper-local mobile web.

Its trials in Kibera and Masai Mara, have signed up a community of members that can post all about their goings-on but also allows a vendor to place an advert that will be targeted to the local community they wish to address.

If you try the app by downloading here you will find adverts for a car body repair shop in Kibera or a local safari guy in Masai Mara. GAIUS provides a set of very easy to use tools for organisations to empower their users to create relevant local content, enable meaningful community interactions as well as support promotion of local services — within their own communities.

Their innovation is a decentralised hyper-local content ad platform that powers a set of mobile web microlocal ecosystems which aims to make the Internet more relevant to the digitally excluded users in emerging markets.

Maybe the world wide web isn’t what the informal sector needs, and GAIUS’ “down my street web” seeks to address the gap.

But overall, with this potential of digital platforms to drive the informal sector, I do hope that the raft of new taxes on the digital economy doesn’t stifle the trend. Stephen’s business would already be covered by a 3% ‘Turnover tax” that exists in Kenya to cover the informal sector SME traders.

But the new ‘Digital Service Tax’ (DST) seeks to slap a 1.5% levy on the value traded on the online platforms. With Stephen Odhiambo set to make KSh 20 million turnovers, I would hate to see Mohammed Hersi or even Twitter for that matter, get landed with a tax bill of KSh 300,000 for advertising the bench/table on their digital platforms….

The author, Ben Roberts is the Group CTIO Liquid Telecom — Building Africa’s Digital Future …. one fibre at a time. Connecting things, 12 bytes at a time, storytelling. Oh and Cape to Cairo.