As I continue my survey of internet cafes here in Accra, one question keeps recurring. How can these small businesses survive, let along turn a profit? 15 so far in Kokomlemle and 11 in Adabraka, the two areas of Accra I am focusing on, and barely one is making its owner a living. Yet they provide an essential service for all the businesses in the area, since an internet connection costs a minimum of 90 cedis (about US$60) to start up and 53 cedis a month for the lowest bandwidth deal, which is way beyond the resources of most entrepreneurs in Accra. So they check their mail in cafes instead, at 50 pesewas an hour. However, the list of challenges for someone attempting to run an internet café is formidable:
Computers cost approximately double what they do in rich countries due to import duties, plus the inflation rate in Ghana is running at 18% and the cedi has lost about a third of its purchasing power over the last year alone. So imported computers are getting beyond the reach of most small businesses. Internet cafes tend to make do with second hand ones from abroad, bought at Tema port or through dealers in Accra – a four or five-year-old PC will cost you about US$300, which is more affordable than the thousand or so for a decent new model.
Connectivity is expensive for cafes: Vodafone, the owner of the fixed network and thus the main ISP for the country, has a business rate of 243 cedis ($164) a month for cafes. There are lower rates, but the cafes are told they should buy the most bandwidth possible, and they tend to do so because there is no information available on what they are getting. There is some debate over whether the ISP actually manages bandwidth, and whether those paying the top rate are getting any more connectivity than those paying less – but that’s for another time.
The main issue for these businesses, however, is credit. This is the word I have heard over and over again, as I have interviewed café owners all over Ghana. There is no access to credit for small-scale businesses. At all.
This seems to be down to a lack of a credit culture, which is not entirely a bad thing. Rich countries’ financial practices haven’t exactly been giving credit a good name lately. Nor have they been setting a good example for their neighbours in terms of how to use credit without destroying everything they were trying to build in the first place. However, there is a case for credit where a new sector needs to expand, and where the equipment that can build the business is in critically short supply.
What I have been discovering is that there is a credit gap where these SMEs are concerned. Ghana’s two credit markets exist at the extreme ends of the scale: if you are a poor rural woman looking for a few dollars to grow your shea butter business, or to buy soap to sell in the market, you are in luck. Some microcredit scheme will lend you $50 and charge you 50% interest on it. Alternately, if you are a Big Man on the local scene, with a long-established business and political connections, you will be able to get a bank loan, which will run you about 40% interest and which you will inevitably have to pay back within a year or 18 months. Loans for longer than a year are almost unheard of in Ghana.
So these small businesses, being a new sector, run by young entrepreneurs who don’t have a lot of collateral yet, are out of luck. I interviewed a café owner this week who had been on a fruitless search for a loan to replace his ancient computers all year. Having tried the larger banks and been refused, he went to his local smaller-scale savings and loan company (not a loan shark but a registered bank) asking for 1,500 cedis (about US$1,000). He was quoted – get this – an interest rate of 48%, and a loan period of just one year. The bank also told him they would only give him access to 1,100 of the amount, and would ‘bank’ the rest for him. Meanwhile, although they were holding onto nearly a third of the amount, they would be charging him interest on the full 1,500. Understandably, he said no. Banks tend to ask for the deeds of people’s houses and the papers for their cars when they take out a loan, and bank managers have good political connections so that if they decide to take your house, there’s probably not much you can do about it.
Credit cards, which might elsewhere act as a stopgap when businesses have to expand, are unavailable to all but the richest Ghanaians. Tim Little has covered the credit card issue in his blog: http://timjlittle.wordpress.com/2009/05/05/a-challenge-to-geeks-and-bankers/. He demonstrates why café owners, who deal almost entirely in hardware and software that is only available overseas, cannot buy anything from outside Ghana. When we need antivirus software or a accounting software, we go online. When Ghanaian businesses need those things, they go open source. It’s an open secret that Microsoft Office 2003 is effectively open source software in Ghana, since enough people have copied it from the few imported CDs that were available that is can now be shared for free. This is not because they are bad people who want to pirate software, it’s because even if they want to buy it, they can’t.
So what are they doing instead? Well, the reason I am a migration researcher surveying internet cafes is that they fill the gap with inputs from overseas. Family and friends abroad send computers directly, or bring them in person. Small items such as USB sticks are ‘imported’ in people’s luggage when they come home for a holiday. I personally helped re-equip a friend’s café when a surge from the electric grid blew up his routers and switches – I brought in 26 kilos of electronics in my luggage after a trip home, because they were so exorbitantly priced and impossible to get hold of here that it was quicker just to buy them in London and fly them in personally. So migration is a mainstay of these small IT businesses.
Of course, the only thing that’s harder for a small-scale entrepreneur to get than credit, is a visa. But that’s a story for another time.
As anyone who reads the Times knows by now, there is an international investigation going on about e-waste. The Times published a story exposing the illegal transporting of defunct computers and other electronics to Brazil and Ghana – among other things, a Ministry of Defence computer wound up in a scrapyard in Accra that has a thriving trade in still-viable hard disks, which made people a little nervous back in the UK.
The problem of e-waste is real – contractors specialise in making your electronic rubbish disappear from view, only to make it highly visible to the poorest of Accra down in the Agbobloshie scrap market district, who are only too happy to rip it apart, burn off anything not made of lead or copper, and sell the resulting metals to traders in Tema, Ghana’s main port and industrial area.
There is an international treaty, the Bamako Convention, which sets out why this is not a good idea, and comprehensively bans it. 30 African countries have ratified it, including all Ghana’s neighbours. However Ghana has not, which makes it a prime destination for toxic e-crap of all kinds. And it is truly toxic. The standard chemicals released when you break down computers include antimony oxide (symptoms similar to arsenic poisoning); beryllium (which has a fatal lung disease named after it); cadmium (lung cancer and heart disease); lead (nervous system damage); and phthalates (asthma, liver and kidney damage).
These are released most effectively when you rip apart and burn the items, although leaving them to seep into the soil over a long period is also an option.
Based on this, I decided Agbobloshie was clearly the place to be. So I went down to take a look.
It is fairly apocalyptic. The smoke billowing from the farthest reaches of the scrap heap envelops everything, casting a dark cloud over the area and wafting a smell that was worryingly familiar as one of the standard Accra smells – meaning it’s making it out of Agbobloshie to share its chemical joys with the rest of the city.
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The first part of the scrapyard is fairly standard: trashed refrigerators that predate the CFC ban, bits of bicycles and cars, all waiting to be loaded into trucks to go off to Tema for reuse. There is also a thriving trade in old car batteries, which the scrap sellers (or more often their junior brothers) break open to salvage the lead. The rest of the battery is thrown away. The scrapyard sits on the bank of the river which flows into the Korley lagoon in central Accra, where according to the local press 5,000 euros a day is being spent on a cleanup exercise to reduce its toxicity.
Further in, people are collecting the copper wires out of computers and other goods and taking them to where the casing is removed by burning. This is not a healthy activity, but is being performed by young men and boys who probably don’t have much access to information on the health effects of cadmium, phthalates, etc.
It also results in a landscape that looks like a Balkan capital after a nuclear war.
This is a migrant business: everyone I spoke to had come from the north of Ghana, which is much poorer and sends a constant stream of migrants south. The boys gathering and burning the computer parts all spoke Hausa and Dagbani, as did the girls who came by to see what I was up to.
There seems to be a rule in Ghana that wherever there are toxic and awful things going on, there are kids having an inappropriately good time. These girls, who had a blast making fun of my appalling Dagbani, clearly have a future in showbusiness:
Particularly this one:
I then found some boys taking a break, who explained that they had quit school in the North to come to Accra and make some money for their families. They told me they make 70 pesewas (47 cents) for each pound of lead they sell, and 2 cedis ($1.35) for a pound of copper, which entails burning the casing off several bucketloads of wire. This is not bad money, for Ghana.
So these are the poorest Ghanaians, migrating south, and trying to make money to support those back home. They are likely to be illiterate (northern Ghana has little education and thus an illiteracy rate of 79%), so that it’s unlikely they can read the warnings in the press about the carcinogens they are helping to release. After half an hour at the scrapyard I was high on fumes and was still feeling dizzy and sick eight hours later, so I can only imagine what happens if you work there every day.
And as with all toxic places in Ghana, people also live there. The community is unplanned, naturally, and has no water or electricity. The sewage system consists of a puddle outside the wall:
which eventually seeps into the river:
and thus down to the aforementioned lagoon.
The most powerful thing about Agbobloshie – apart from the smell – is the sense of opportunity that pervades its dumps and fuming bonfires. For most of the kids I spoke to, a job burning carcinogenic crap was a desirable career option compared to the hunger and lack of opportunities back home in the village. They were working, and this made sense to them.
What I carried away, as usual, was a feeling that this energy could be put to better use. The few responsible electronics manufacturers that want to make sure their e-waste is disposed of in an environmentally safe way (at least the e-waste that they can identify and that is offered up by their customers) have to pay large amounts to disposal experts. A coalition of relevant parties such as big computer manufacturers, environmental organisations and private donors could set up a high-tech recycling industry in a country like Ghana, involving actual standards and buildng capacity that would be unique in the developing world. Ghana could make a nice living receiving and processing e-waste properly, instead of having children rip and burn it apart with their bare hands, then having the rest of us inhale the results.
Unfortunately it’s much easier just to let things be. The kids aren’t complaining, after all. And by the time they feel the effects, they’ll be back home in Savelugu, Yendi or Choggu. If they make it to a hospital, which is unlikely, the diagnosis will be the same as it always seems to be: poverty.
