Home Grown Hope: Small Steps to Ending Poverty

Wednesday, October 20, 2010

By Karol C. Boudreaux

But poverty rates remain stubbornly high in sub-Saharan Africa. Why is Africa lagging? An important part of the answer is that African governments make it difficult for millions of small-scale African entrepreneurs to create, invest in and grow their businesses

As I think of our domestic situation on this International Day for the Eradication of Poverty, I recognize that we are a deeply fortunate people. For all the problems and concerns we face in our daily lives, for all of our worries over jobs, the housing market and our children’s future, we are largely spared worry over abject poverty. Our communities certainly include poor people, but we have few who are abjectly poor.

Look around the world, though, and you’ll find that the problems of abject poverty are still very real. Hundreds of millions of people are living on just over a dollar a day. Is it realistic to imagine that there’s a way — to use a popular slogan — to "make poverty history" for these people? Or is poverty one of those intractable human conditions, as inevitable as taxes and death?

Ten years ago, government leaders met at the United Nations and pledged, among other things, to cut the proportion of people living on a dollar a day in half by 2015. This is the first of eight "Millennium Development Goals," and the good news is that progress has been made reducing poverty, particularly in eastern and southeastern Asia.
But poverty rates remain stubbornly high in sub-Saharan Africa. Why is Africa lagging? An important part of the answer is that African governments make it difficult for millions of small-scale African entrepreneurs to create, invest in and grow their businesses. Their personal safety is not ensured, and they can’t always count on keeping what they earn. And that’s a problem because these hardworking men and women are the real key to poverty alleviation in Africa. Here are just two examples.

Michael Jwambi was born in the Eastern Cape province of South Africa during the apartheid era. Like many young black men at that time, he moved, illegally, to the city in search of opportunity. He found opportunity as a gardener and eventually got a job driving buses. Sadly, a serious bus accident resulted in the loss of his left leg.
Undeterred, Michael began to work in the back office of the bus company. He saved money, and he and his wife opened a small grocery store, called a Spaza Shop, in his township. Michael and his wife were thrifty and good managers, and the shop was a success, but this was during the early ’90s, when township violence in South Africa was pervasive. Their store, which was also their home, was attacked and burned to the ground by criminals. Everyone in Michael’s family was killed except for him.

A year to the day later, he reopened his store, and by the end of the day, every item on his shelves was purchased in a show of community support. Michael continued to build his business, open new stores and expand into other areas. When I met him in 2006, he owned several stores, employed more than 50 people and supported a local church choir. He had remarried and was grateful for the contributions he could make to his community.

Unfortunately, Michael’s story doesn’t end with retirement ?— it ends with tragedy: More than a year ago, he was gunned down in front of one of his businesses; a victim of crime in a country that has failed to make the streets safe for its citizens.
Half a continent away from Michael’s home, 33-year-old Emelienne Nyirumana is studying business management in Kigali, Rwanda. Three years ago, Emelienne was one of the abject poor; she struggled to support her five children on less than a dollar a day. Then, she joined a women’s sewing cooperative. The women of Cocoki cooperative sell to U.S. retailers.

As a co-op member, Emelienne improved her skills and discovered she had a passion and a talent for business. She was admitted to, the Goldman Sachs 10,000 Women Initiative program at the School of Finance and Banking in Kigali. Through a combination of hard work, improved skills and new opportunities, Emelienne now earns $4 a day enough to pay the school fees for her children and to put some money aside. It’s not easy, but Emelienne and the other women of Cocoki are combating poverty each and every day.
Abject poverty can be substantially reduced, maybe even eliminated. Poverty isn’t inevitable: People like Michael and Emelienne have the drive, the talent and the passion to build successful businesses and create jobs and opportunity in their communities. But they need something else; they need their government officials to keep them safe, to limit predation, to reduce red tape and to encourage productive, rather than destructive, economic activity. If this happens, Africans, like Americans before them, will find their own path to prosperity.

Karol C. Boudreaux is senior research fellow at the Mercatus Center at George Mason University. She also serves on the board of directors of Indego Africa. This article was originally published on Deseret News.