Mosquito Nets and Mobile Phones

This is a pretty good argument for traditional bottom up economics replacing top down Government intervention when it comes to giving African countries aid and support – hope you get something from it.

Mosquito Nets

After the Davos summit Gordon Brown, Bono and Sharon Stone commendably used their celebrity, and in Brown’s case political experience and intellect, to actively promote aid for Africa. The symbol of this appeal came to be the $4 insecticide-soaked mosquito nets for children to sleep under safely in areas of central and southern Africa where malaria still represents a huge national scourge.

The problem was giving them away for free. Very soon many Africans, particularly in Mali, used these free nets as fashionable items to wear, as wedding veils or even used them as fishing nets. Malaria rates remained stubbornly high. It was eventually one American who decided to sell them for just 50 cents each in the poorest areas, subsidising this by asking an inflated $5 of richer urban Malinese.

As a result, in the poorer areas mothers who had spent half a day’s wages on these nets made sure they were put to the proper use and within a few months over 50% of children under five slept beneath safe nets at night. Malaria rates fell quickly afterwards.

Mobile Phones & Sardines

It was conventional wisdom that generally Africans were too poor to need mobile phones and many businesses labelled the continent as a future market rather than a current one. However, Africans soon embraced the new technology for the benefit it brought them despite the cost.

Use of the bureaucratic landline system in many countries was time consuming, unreliable and expensive but Africans found mobiles allowed quick calls to be made albeit at a price. That price became worth paying when they could phone ahead to assess demand for a product before setting off for the market. In one example fishermen arrived at a port with a huge sardine catch. Unfortunately the buyers had all gone and the catch was largely wasted. Yet just 27 miles down the coast, hundreds of buyers were paying a 50% premium to their local fisherman who had now just exhausted their own stocks.

After acquiring a mobile phone, which got a signal up to twelve miles out, the fishermen were able to ring ahead and assess the demand for their catch before setting off back for shore. This resulted in an 8% increase in annual profits and a 4% reduction in the price of Sardines – coupled with a huge reduction in wastage.

Everybody won…except the Sardines of course.