Here is the full transcript of Efosa Ojomo’s talk titled “The Poverty Paradox: Why Most Poverty Programs Fail And How To Fix Them” at TEDxGaborone conference.
In this TEDx talk, author and researcher Efosa Ojomo emphasizes the inadequacy of traditional poverty eradication programs. He argues that focusing solely on resource distribution overlooks the need for systemic change through innovation. Ojomo highlights how innovations like Henry Ford’s affordable cars and Mo Ibrahim’s telecom venture in Africa spurred economic growth and development.
He points out that these innovations made essential goods and services accessible and affordable, thereby transforming societies. Ojomo criticizes the approach of treating poverty as a resource problem, advocating instead for market-creating innovations that lead to job creation and infrastructure development. He urges a shift in focus from merely trying to eradicate poverty to fostering innovations that enable prosperity.
Ojomo’s talk suggests that this innovative approach can accelerate Africa’s transition from poverty to prosperity within a couple of decades.
Listen to the audio version here:
TRANSCRIPT:
So, I have a confession to make. About a year after I graduated secondary school, I failed the entrance exam into the University of Nigeria twice. And between you and me, if I took the exam a third time, I think I would have failed again. But that’s not even the saddest part of the story.
I think for me, the saddest part of the story is that if I was successful, and if I passed the exam, here are images of some of the universities where I would have had the opportunity to study. Some of these universities have the same acceptance rates as some of the most elite institutions in the United States of America.
This is what poverty looks like. Many books have been written about how to end poverty. And many institutions make it their mission to end poverty. In fact, every year, we spend hundreds of billions of dollars trying to end extreme poverty. And we’ve made some progress. We’ve reduced the global poverty rate from about 35% in the 1990s to just under 10% today.
Global Poverty Dynamics
But if we’re honest with ourselves, and there is no progress without honesty, what we will find is that a majority of the countries that have escaped poverty are in Asia, and primarily one, which is China. The majority of the people who have escaped poverty are from China.
And what you find is that more than half the number of people living in poverty today exist in our continent, in Africa. In fact, when you take these 18 countries, and you look at their GDP per capita, in the 1960s, and you compare it with the GDP per capita in 2015, what you find is that these countries are poorer today than they were in the 1960s.
And so how is it that we’re spending billions of dollars every year trying to eradicate poverty, but we’ve got some countries that are poorer today than they were 50 years ago? That’s one of the questions at the core of my research at the Clayton Christensen Institute in Boston. But this isn’t always how I planned I would spend my life.
About 17 years ago, when I could not get into the University of America, I was fortunate to get a scholarship, and I got to the University of Nigeria, then went to the University of America. In fact, I felt like this guy. I felt like I had just won the lottery. In fact, I tell my friends, I felt like I was in prison, I escaped, then I won the lottery. I had no plans of ever coming back to Africa, I mean, who wins the lottery and goes back to prison?
Turning Point and Action
But as I was chasing my American dream, and I opened a book in February 2008, one night, and I read about this girl. It’s a 10-year-old girl in Ethiopia who had to wake up every morning at 3 a.m., walk miles, fetch firewood, and sell so she could take care of herself and her family. Something happened to me that night, because I thought about the hundreds of millions of other children on this continent that lived life like her. And I dedicated my life to making sure that we improve the lives of people like her.
So I got some friends together, and we started an organization called Poverty Stops Here. We’ve since raised funds so that we could build wells, invest in education, and give out microloans in struggling communities in Nigeria. We’d build wells in communities where women and children would have to walk miles to fetch water. But something interesting started to happen after we’d built a few wells.
The wells started to break. Now at first, I thought maybe this was our problem. We were just a bunch of passionate guys, excited about ending poverty, and didn’t really know what we were doing. After I researched this some more, I realized, nah, this isn’t just us.
The Broken Wells Syndrome
There are hundreds of millions of dollars’ worth of wells on the continent that are broken. And this problem was so important to me that I went back to school to figure out how to solve it. While I was at school, I was lucky to meet this man. He’s one of the most prominent professors at Harvard, and he’s one of the world’s leading management thinkers.
He’s the father of disruptive innovation. Over the past couple years, we’ve been studying what role innovation has to play in development. We’ve been thinking about why we spend so much money trying to eradicate poverty, but we don’t get the results that we want. And he has helped me see that our obsession with ending poverty is actually where the problem lies.
Rethinking Poverty Eradication
The first reason for that is, interestingly, the end of poverty is not the same as prosperity. The end of poverty is not the same as the end of suffering.
It’s not the same as the end of hardship, and the end of struggle. There are billions of people in the world who are technically not living in poverty—you know, less than a couple dollars a day—who are still living very difficult lives.
And so as difficult as it is to end poverty, it turns out that we’re focusing on the wrong thing. A friend of mine once told me one day that focusing so intently on poverty is like a student doing everything they can so they don’t get an F in school. I mean, it’s a good thing not to get an F, but is it really admirable? Should that be what we should be focused on?
And the second thing is that when we focus on poverty, we see everything through that lens. And because poverty almost always shows itself as a lack of resources, a lack of food, a lack of water, a lack of schools, a lack of roads, a lack of clinics, infrastructure, a lack of things that rich people have and poor people don’t, what we end up with is that poverty is a resource problem. And so what do we do? We push these resources onto these poor communities in the hopes that we can eradicate poverty and create prosperity.
Innovation as the Key to Prosperity
But then we get the results that aren’t quite what we expected. It’s the same thing that happened to me when I went into the wells to try to get water into the community. And what I found is that this image actually represents many projects in the development community where we push and push and push resources on poor communities, but the progress that we make is actually very limited. And that’s because many of the projects are anchored on this question, how can we eradicate poverty?
But if we tweak that question just a little bit and ask a different question, how can we create prosperity? What we begin to find is that this is not a resource problem at all, this is an innovation problem. And innovation, simply put, is practical solutions to real problems. And we find that many of the resources that are pushed on these poor communities are not practical because they can’t afford them, and they’re not getting to the root cause of the problem.
Historical Perspective on Prosperity
You know, a few weeks ago I was in Washington, D.C. giving a presentation on the importance of innovation and development, and I showed this slide with different demographics. 70% rural population, 10% access to electricity, the average person spends more than half their income on food, the infant mortality rate is almost 20%, and I asked people in the audience, I said, what country do you think this is? And of course, you know, we won that one.
People, you know, guessed Somalia, Sudan, Mali, the Democratic Republic of Congo (DRC). And after I saw that they weren’t going to get it, I said, this is the United States of America. They were shocked. And I said, this is the United States of America in the 1850s through the early 1900s.
It had demographics that are worse than some of the poorest countries on the continent today. And in order for us to figure out how to create prosperity in Africa, we have to ask ourselves a question. What happened in America? Did they push a bunch of resources on the populace, or did they use a different strategy?
Well, America innovated. I’ll give you an example. In the 1900s, the car was a luxury that only rich people could afford. But in 1908, Henry Ford decided to make a car for the average American. He decided to make a car simple and affordable. Now many people laughed at him. He lost several investors. People thought he was crazy, because there weren’t even roads in America to drive the car on.
Henry Ford’s Legacy and Innovation
But he was successful. He persevered. And as a result, millions of people pulled the cars into their lives. He created tens of thousands of jobs, and industries began to emerge around the car.
People started to build suburbs in the outskirts of the cities. Agriculture became more productive, as you could easily transport food from the farms into the cities. In fact, the United States government had tried to build roads in the 1800s, but they couldn’t raise the money to build the roads. But after Henry Ford’s innovation, the government was able to tax the citizens with the car sales and gas taxes, and as a result, they were able to build roads.
The car came before the roads. The innovations come before the infrastructure. But you see, Ford was not alone. He was born into an America that had this culture of innovation, even though the demographics were worse than some of the countries in Africa today.
Innovation’s Role in Prosperity
From innovations in agriculture to innovations in financial services. Innovators in the 1800s and early 1900s developed products that were simple and affordable, so that millions of Americans could pull them into their lives. Now, the one thing that these innovations have in common is that they made products simple and affordable. As a result of doing this, millions of people pulled these products into their lives.
The companies needed to create jobs so that they could serve these customers, and as a result, development happened. Now, I know some of you are probably thinking, there’s no way we can do this in Africa. We’ve got way too many issues that we need to solve. That’s understandable.
But we’ve been trying to fix our issues since the wave of independence swept across this continent in the 1950s and 60s, and how are we doing on that? If America tried to fix their issues the way we’re trying to fix our issues, the country would not be where it is today.
See, for America, and virtually every prosperous country that we have studied, innovation came before development. But for Africa, somehow, we want development to come before innovation, and we have the equation backwards.
Innovation in Africa: Unlocking Prosperity
Unfortunately, it just can’t work that way. Thankfully, there are a few innovators on the continent that are making products more accessible, simple, and affordable, so that more Africans can pull them into their lives. These are the kinds of innovations that we need to foster.
Take the late 1990s, for instance, when the cell phone was called a rich man’s toy. Very few people on the continent had it, but Mo Ibrahim decided that he would create a mobile telecommunications infrastructure in several African countries that could serve millions of people. And just like Henry Ford, people thought he was crazy. Banks refused to give him money, but he persevered, and he was able to develop this infrastructure in several countries, from Chad to Niger to Sudan to the DRC. And now millions of people have pulled these products into their lives.
We have industries that have emerged around it. But interestingly, he was able to unlock $3.4 billion worth of value in seven years from some of the poorest countries on this continent. Think about that for a second. He was able to sell his company for $3.4 billion in about seven years.
Driving Change Through Innovation
That’s the kind of prosperity that exists if we think about creating market-creating innovations. There are a few other innovators doing the same, in financial services from M-PESA and MicroEnsure to even entertainment, the Nigerian movie industry, Nollywood, that currently employs about a million people, to another innovation that’s making malaria diagnostics really simple.
Malaria still kills hundreds of thousands of Africans every year, but with a product that costs a little over a dollar, you can find out if you have malaria in about 20 minutes, so that you can treat it more easily. Now focusing on these kinds of innovations is more important now than ever.
Here’s why. In 2015, the Pew Research Center did a study that said about 92% of Africans earn less than $300 a month. Now this is after the decade of the Africa rising narrative. I don’t know where we were rising to, but we didn’t rise very high.
But here’s what that looks like. That means these are the people on this continent of the proportion that earn more than $300 every month. We need to start developing innovations for the millions of people for whom a decent education is not available, for whom access to healthcare is not available, access to affordable housing they can’t find.
What would happen if we started to focus on innovations that targeted the hundreds of millions of Africans who don’t have access to these products? And I think what we would see is an innovation revolution on this continent that’s going to catapult us from poverty to prosperity in less than two decades.
But the first thing we have to do is we really have to stop focusing, stop obsessing about eradicating poverty, and we have to start thinking about creating innovations that can lead to prosperity.