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  • Author: Bright Simons
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Just before the yuletide of 2018, I arrived in my native Ghana after one of my long spells away. I flipped out my phone, opened Uber, and tried to flag a ride from inside the shiny new terminal of Accra’s international airport. After a couple of false starts I gave up, walked out, and headed for the taxi stand. In the many days that followed, this ritual repeated itself with remarkable regularity. Sometimes I got the Uber, but on as many occasions, I couldn’t. The reasons for the frequent failure ranged from curious to bizarre. The “partner-drivers” would accept the request. Then they would begin to go around in circles. Sometimes they would start heading in the opposite direction. On a few occasions they would call and announce that they were “far away,” even though their registered location was visible to me on the app and their estimated time of arrival had factored into my decision to wait. It would take me a whole week to figure out that the problem wasn’t always that many Ghanaian Uber drivers couldn’t use GPS all that well, or that they were displeased with fares. There were other issues that I’d left out of my calculation, such as my payment preference, which was set to “bank card” instead of “cash.” The drivers want cash because it allows them to unofficially “borrow” from Uber and remit Uber’s money when it suits their cashflow. Though Uber offers two tiers of service, the difference in quality appeared negligible. Even on the upper tier, it was a constant struggle to find an Uber whose air conditioner hadn’t “just stopped working earlier today.” As something of a globetrotter used to seamless Uber services in European and American cities, I found the costs of onboarding onto Uber as my main means of mobility in Accra onerous. Why is a powerful corporation like Uber, reportedly valued by shrewd investment bankers at $120 billion, with $24 billion in capital raised, unable to maintain even a relative semblance of quality in its product in Ghana? And in other African cities I have visited? It may seem bleedingly obvious why heavily digitalised Facebook, Twitter, Microsoft, and Google manage to deliver fairly uniform standards of product quality regardless of where their customers are based, whilst Uber, because of its greater “embeddedness in local ecosystems” and lower digitalisation of its value chain, fails. But in that seemingly redundant observation enfolds many explanations for why the innovation-based leapfrogging narrative in frontier markets, especially in Africa, unravels at close quarters.
  • Topic: Development, Science and Technology, Governance, Digital Economy, Emerging Technology
  • Political Geography: Africa
  • Author: Alan Gelb, Anit Mukherjee
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Reforming inefficient and inequitable energy subsidies continues to be an important priority for policymakers as does instituting “green taxes” to reduce carbon emissions. Simply increasing energy prices will have adverse impact on poorer consumers, who may spend substantial budget shares on energy and energy-intensive products even though the rich typically appropriate more of the price subsidy. Equitable pricing reforms therefore need to be accompanied by programs to transfer compensation: depending on the situation, this can be targeted or universal. Successful reforms require measures to raise awareness-of the subsidies and the problems they cause, effective dissemination of the reform to the population, and rapid feedback loops to facilitate mid-course corrections. Digital technology, including for unique identification and payments, as well as general communications, can help build government capacity to undertake such reforms and respond to changes in fuel markets. The paper outlines the use of digital technology, drawing on four country cases. The technology is only a mechanism; it does not, in itself, create the political drive and constituency to push reform forward. However, it can be employed in a number of ways to increase the prospects for successful and sustainable reform.
  • Topic: Climate Change, Energy Policy, Environment, Science and Technology, Reform, Digitalization
  • Political Geography: Africa, Middle East, India, Latin America
  • Author: Njuguna Ndung'u
  • Publication Date: 08-2019
  • Content Type: Research Paper
  • Institution: Center for Global Development
  • Abstract: Following the launch of M-Pesa in 2007, Kenya has emerged as a global leader in the development of mobile money and in increasing rates of financial inclusion. This paper shows how M-Pesa’s success has led to a series of endogenous innovations that have shaped Kenya’s digital space, placing it ahead of other developing economies in the region in the deployment and use of digital technology. It also explains how the mobile financial services revolution enabled the government to implement its e-governance strategy to better provide a range of services and opportunities to beneficiaries of public programs, business, taxpayers and investors, as well as dynamizing the private sector. At the same time, even as it contributes to strengthening state capacity, the digital revolution makes new demands on the state, and the paper outlines several important challenges that Kenya will need to address in order to further consolidate its success. These include improving connectivity across the country, ensuring a fully interoperable mobile payments platform and implementing measures to strengthen consumer protection. Another important focus for the future is to transition to a fully digital identification (e-ID) system. The thrust of the paper is to provide inspiration and guidance for other countries to use Kenya’s achievements as an example.
  • Topic: Science and Technology, Governance, Leadership, Innovation, Digital Policy, Digitalization
  • Political Geography: Kenya, Africa
  • Author: Charles Kenny
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Now that computers are capable of taking the jobs that require brain as well as brawn, it may appear there is little left for humans to do. There are many scary forecasts of the capacity of automation and AI to replace a lot of workers very fast. Self-driving vehicles may wipe out opportunities for taxi driv- ers and truckers, for example. Brynjolfsson, Rock, and Syverson note there are 3.5 million people em- ployed driving vehicles in the US. If automation reduced that to 1.5 million, that alone would increase total US labor productivity by 1.7 percent,1 but it would also leave two million drivers looking for work. In 2013, Oxford economists Carl Frey and Michael Osborne made waves by predicting that 47 percent of US employment was automatable over the next two decades, with a higher estimate for developing countries.2 Erin Winick of Technology Review subsequently produced a summary table of job losses and gains estimations on automation.3 Some of the worldwide figures are in Table 1. There are clearly two sides to the ledger, but some of the predicted job loss numbers at the global level are considerable. The forecasts suggest bad news for Africa in particular, given concentration in types of low-skill jobs that might be easy to automate, rising working age populations, and already far too few good jobs to occupy the existing population. Arntz et al. suggest the share of workers at high risk of automation is 40 percent amongst those with a lower secondary education and above 50 percent for those with primary or less education.4 Advanced manufacturing and AI applications including automated call centers might even reverse the trend towards manufacturing and low-skilled services moving to developing countries. That would imperil a recent run of global income convergence. And there have been cases of impact al- ready: Foxconn replacing 30 percent of its workforce when it introduced robots, and 1,000 lost jobs in Vietnam when Adidas shuttered a factory and moved production to “speed factories” in Germany and the US. If this is the beginning of a trend, it would be harmful to African development prospects.
  • Topic: Development, Science and Technology, Artificial Intelligence, Automation, Emerging Technology
  • Political Geography: Africa