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“Dignity is more important than wealth”

Chris Anderson admits that it’s hard to be objective in introducing Jacqueline Novogratz, given that he lives with her. He frames her talk – about her history of working in Africa and founding the Acumen fund – in terms of love and anger: love of Africa, and anger at the simplistic way in which African issues are often discussed.

She starts by telling us about her rough introduction to Africa, as a young idealist armed with books of poetry and a guitar. In Cote d’Ivoire, determined to save the world starting with Africa. “I quickly discovered that Africans didn’t want saving, especially from me.”

Moving to Kigali, she learned more lessons rapidly. She began working with a bakery run by “prostitutes”. Working with the women in the bakery, she discovered that they were better described as “unwed mothers”, demonstrating that “what we call people can distance them from us”. But she also discovered that the “business” was really a charity. She helped the women learn to listen to the market and develop goods that people wanted to buy, like cassava and plantain chips. The women eventually earned four times the national average income.

This, in turn, required learning how to market – she tells of standing in the streets, selling doughnuts from an orange plastic bucket. The women she worked with pointed out “Who’s not going to buy doughnuts from a tall white woman?” In this case, she tried to force the women to listen to the market to create new products. But she says she also learned that, “When you live on charity, it is very hard to say what you need.” She observes, “Listening is not only about waiting, it’s about learning how better to ask questions.”

Offering some generalizations, she suggests:
– Dignity is more important that wealth
– Aid alone won’t work in developing Africa
– Markets alone also won’t solve these problems

Novogratz’s Acumen Fund is based around these principals – it’s a non-profit investment fund which raises money to invest in social-focused enterprise. It’s created 20,000 new jobs in 20 businesses, delivering services to tens of millions of people. She tells two stories about investments Acumen has made.

One is in a Kenyan company called Advanced Bioextracts in Kenya. They focus on growing a plant indigenous to China which produces the chemical Artemisenin, which is effective against malaria. Given that malaria leads to $10 billion in economic loss a year for Africa, this is a key area to focus on. Farmers producing, drying and selling artemisenin to Novartis are making 4 to 5 times what they would make from producing maize. While the company has been hugely successful, they’ve also had difficult times financially, and Acumen has provided two rounds of bridge financing to keep the company alive.

Another investment is in A to Z Manufacturing, an outgrowth of Sumitomo, which began creating bednets from polyethelene fiber impregnating with insecticide. They were initially produced only in East Asia – the company is an experiment in producing these products in Africa for African markets. The factory, near Arusha, now produces 8 millin nets a year, employing 5000 people, 90% of them female.

The business isn’t sustainable – it sells all its output to UN agencies, and if UNICEF or others decide to stop focusing on malaria, they’ll be in deep trouble. There are now experiments with selling directly to the end users. The nets cost $6 to manufacture and an additional $6 to distribute – market tests have discovered that people will pay $1 for the nets, but not much more. Do you give these nets away, or do you sell them for $1, a highly subsidized price? These are the questions Acumen is wrestling with, trying to use a combination of market and charitable mechanisms to effect change.