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Smartphones in Africa - Ghana

2011-12-15 12:56:45

Nuts and bits

Oct 7th 2011, 14:06 by P.L.| JANGA

ABRAHAM TAKURA leans over a jute sack and holds his Motorola smartphone in front of a white label, on which are printed a bit of text and a few black lines. It is not that Mr Takura has a penchant for dull photographs: the lines are a barcode, which he is scanning. His phone duly records important data and sends them to a server in the German town of Walldorf: this sack of shea nuts, belonging to Fati Karimu, from Chamera Fong, has been delivered to the warehouse in Janga.

Janga, in northern Ghana, home to about 3,000 people, is reached by a spine-jarring 40-minute ride along an unmade, red-earth road. Water has to be obtained from the pump, but telecommunications are on tap. A red-and-white steel tower, the ubiquitous sign of Africa s leap into the mobile-phone age, rises above the homes of mud and thatch, breeze-block and corrugated metal.

Janga s tower has been here for a few years at most. Its women have been gathering shea nuts from the bush for generations. It is hard, dangerous work: there are snakes in the grass and the nuts are collected after they fall. But they are an essential source of income. The nuts are dried and made into shea butter, of which most is used in confectionery and some in cosmetics. It is said to do wonders for dry skin.

A combination of smartphones, business software and microfinance may make the women s lot a little less hard. A similar, longer-running programme seems to be doing so for cashew farmers, most of them men, in the west of the country. The scheme is not simple philanthropy, though there is a good dose of that. SAP the big German company that devised the smartphone app, makes the business software and hosts the server to which Mr Takura and the project s other field officers send their data sees it as a commercial investment too.

In shea nuts, the software side of things works like this. Each woman is given labels with a personalised barcode. (Spares are used, with her name handwritten, if she runs out or a label rips.) She attaches one to each sack she fills, which typically weighs 85kg. The smartphone scans the label on delivery and talks to the server again when the sacks are weighed and loaded onto a lorry. As a back-up, paper trails are also kept. The software also records and reports what each woman should be paid, according to weight, basic price and quality: the buyer tests the nuts and pays a premium for the best. SAP s software can also break down a buyer s order, assigning bits of it to various groups of women. Carsten Friedland of SAP explains that the synchronisation of the data on the smartphone with that in the cloud does not necessarily require an internet connection. It can also be done via bulk SMS, which will function with even the most basic mobile network.

In essence, this applies sophisticated enterprise software to a traditional even pre-agricultural activity, carried out by poor people in remote places. It is part of a broader effort by SAP and PlaNet Finance, an NGO, to turn that activity into an enterprise. The women used to work as individuals; they have now been formed into a federation of local groups called the Star Shea Network. This gives them more bargaining power with buyers and a brand. By working collectively they can offer a surer supply, become more attractive to bigger buyers and cut out a few links in the market chain. In 2010, the project s first season, when there were 1,500 women in the scheme, Olam, a big trader and processor of commodities, bought the network s entire output of 93 tonnes. This year Wilmar, another big commodity group, is the buyer; the 3,000 women now taking part in several districts of northern Ghana are expected to sell it around 200 tonnes.

A big benefit is that the women have been able to sell their nuts later in the year, when they have dried more and fetch a higher price, rather than offload them early because they need the cash. According to a study by Sonali Rammohan of Stanford University s Graduate School of Business, last year the women were paid 59% more for standard nuts than they would have got in the local market in June. For premium nuts, they gained 82%.

The women have been given some training too: how to produce better-quality nuts; how to act on price data received on mobile phones given to each group to check prices in the broader market; and how to move up the value chain into processing butter. This year around 50 tonnes of nuts (on top of what will be sold to Wilmar) are being turned into 17 tonnes of butter.

Now microfinance is coming into play. Loans provided by two local organisations, Grameen Ghana and Maata-N-Tudu, should allow women to buy gloves and boots for protection in the bush. (Last year Olam provided them as a loan in kind; this year PlaNet Finance has done the same.) The loans should also provide liquidity for the nut-gatherers and working capital for butter-processors to buy packaging material. The first disbursements of cash to gatherers and processors were made only in July.

Women in Janga say that they are glad of the protective gear and the phones, not to mention Shea Star Network T-shirts. They add that they are less scared of reptiles these days. Most important, perhaps, is their apparent confidence that no one s nuts will go unrecorded.

Judging by the experience of cashew farmers at Wenchi, in the west, where SAP has been working with a group called the African Cashew Initiative, trust in the software and the accuracy of the data may be the key to the success of the whole venture. Officials from the local farmers co-operative, which operates the scheme, say that farmers, seeing an electronic record of their produce, now trust their book-keeping and believe they are paid what they are owed. The officials, in turn, are in a stronger position with buyers. Yahya Baro, the secretary who has overseen the scheme, reckons a lack of proper documentation has cost the union s members 15,000 cedis ($9,000) a year in its dealings with buyers. But traceability does not only ensure that individual farmers get their due. The union hopes that it will help it regain its FairTrade status, which was suspended last year.

Until now, the shea-nuts project has been sustained by grants in cash and kind from SAP, the European Commission and some other sources. By the end of this year, SAP and PlaNet Finance plan to turn it into a social business , taking it a stage closer to a commercial footing. SAP is making it an interest-free loan for three to five years; PlaNet Finance has secured money from the Commission until the end of 2013. The idea is that women will see the benefit of being part of the network and pay a small fee out of their increased incomes to join. In return they will have access to its various services, from loans to phones, and take a step into the formal economy, for instance by joining the national health-insurance scheme. The two partners reckon the social business should break even within five years. Far-fetched? No more so than the notion, a few years ago, that a phone in Janga might connect instantly with a server in Germany.