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Delivering for citizens: How to triple the success rate of government transformations

An increase in the number of successful government transformations could help solve society’s greatest challenges, serve citizens better, and support the more productive use of public resources.

Governments around the world know that to deliver for citizens, they must transform the services they provide.

Aging populations are putting huge pressure on health and social services; educational systems need to equip young people with the skills for a technology-driven world; and the changing shape of cities is creating new demands on infrastructure. Many government services do not meet citizens’ growing expectations. These trends are contributing to public discontent.

Unfortunately, around 80% of government efforts to transform performance don’t fully meet their objectives—a key finding of a survey of nearly 3,000 public officials across 18 countries as part of a new study by the McKinsey Center for Government.

The study also includes insights from 80 case studies, as well as 30 in-depth interviews with leaders who have personally led transformations in government. Between them, these leaders have more than 300 years of collective experience in what it takes to succeed.

The failure rate of government transformations is far too high. It represents a huge missed opportunity to tackle society’s greatest challenges more effectively, to give citizens better experiences with government, and to make more productive use of limited public resources.

If governments around the world matched their most improved counterparts, they could save as much as $3.5 trillion a year by 2021 while maintaining today’s levels of service quality.

Alternatively, they could release substantial funds for the services citizens most care about, while keeping overall government expenditure constant.

Of course, this is easier said than done. Government leaders often have limited political capital, particularly in sensitive services such as education and healthcare, and in instances where ministers serve in a minority or coalition government.

The public sector often has too many priorities: leaders try to reform too much, across too broad a waterfront. Another challenge is a lack of leadership longevity. For example, a review of ministers of health across 23 countries from 1990 to 2009 found that half of them served for less than two years in office.

To grasp the prize, governments can learn from the 20% of transformations that do achieve their goals.

Our study not only shows what that involves but also highlights dozens of real-world success stories. It identifies five disciplines that, together, can more than triple the success rate of government transformations (exhibit).

These disciplines may seem obvious, but our research shows that they are extremely difficult to get right. We call them the five Cs:

Together, five disciplines can more than triple the success rate of government transformations
  • Committed leadership. Transformation leaders must go beyond standard public-sector management routines, committing extraordinary energy to the effort, taking personal responsibility for success or failure, leading by example to facilitate change, and challenging long-established conventions.
  • To inspire the transformation, they must spend substantial time communicating face-to-face with the people affected, listening as much as they talk.
  • Clear purpose and priorities. Successful transformations paint a compelling picture of their destination and make it crystal clear, to public servants and citizens alike, why change is necessary. In setting objectives, less is more: successful efforts keep targets few, specific, and outcome based.
  • One successful educational transformation in our study, for example, had just four major targets, covering enrollment in schools, enrollment in universities, evaluations, and information systems.
  • Cadence and coordination in delivery. Transformations differ markedly from traditional public-sector policy-development and implementation efforts.
  • They require a fast yet steady pace; a flatter hierarchy, with close collaboration among different agencies and functions; and flexibility, so problems are solved as they arise. They also require an empowered, focused transformation team to drive and track progress.
  • Compelling communication. Few governments communicate effectively enough to win hearts and minds. Nearly 90% of the participants in our survey said that the transformation would have been more successful if there had been more engagement with frontline employees.
  • Transformations need well-planned, in-depth, and genuine two-way communication with all the groups affected by change—especially the employees of the organization undergoing the transformation.
  • Capability for change. Although many highly skilled people work for government, they rarely have deep expertise and experience in change management. Reliance on business-as-usual capabilities is a major contributor to the high failure rate of government transformations.
  • Three sets of skills are particularly important: the ability to run complex, large-scale service-delivery organizations; project and program-management smarts; and digital and analytics capabilities.

Our study, looking ahead to the next horizon of government transformations, also draws inspiration from technology-enabled change initiatives in the most advanced public- and private-sector organizations. These pioneers are using the concept of citizen experience to understand the end-to-end customer journey in services such as public transport and business licensing.

They are drawing on design thinking to reconfigure these services in a way that integrates the needs of people, the possibilities of technology, and the requirements of the provider organization. And they are deploying agile practices to design, prototype, and test services—quickly—with users. Governments around the world can apply these innovations to transform their services at a faster pace and lower cost and, most importantly, to create outcomes that truly respond to the priorities of citizens.

Download Delivering for citizens: How to triple the success rate of government transformations, the full report on which this article is based (PDF–5.4MB).

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Home demolitions in West Bank on the rise; already 1 home destroyed in 2019

Home demolitions in West Bank on the rise; already 1 home destroyed in 2019

The Sheweiki family’s belongings outside of their demolished home in Qalandia, January 2, 2019. Photo credit: Wadi Hilweh Information Center.

Why would 2019 be any different from 2018? Israeli demolition of Palestinian homes goes on unabated, as though it were a completely legal occurrence. In fact, 2018 saw a 21% increase over 2017.

from Alternative Information Center

On Wednesday, January 2, 2018, Israeli forces demolished a Palestinian-owned home in the Jerusalem district.

The house belonged to the Maghrabi family. It was built five years ago in al-Matar area of the Qalandia neighborhood on the Jerusalem side of the Israeli wall that surrounds the West Bank.

Six members of the Shweiki family lived in the home, reports al-Jazeera. Following the demolition, residents’ belongings were left stacked outside next to the rubble of what used to be their home.

Israeli forces demolish the Mughrabi family’s home in Qalandia, January 2, 2019. Photo credit: Wadi Hilweh Information Center.

Israeli authorities claim that the house lacks construction permits. According to the Wadi Hilweh Information Center, the owner of the house Hamza al-Mughrabi has attempting licensing his house under Israeli law for years.

The Israeli municipality zones only 8 to 13 percent of East Jerusalem for Palestinian residential construction.

As a result, many East Jerusalem residents are forced to build without permits to avoid overcrowding. The Association for Civil Rights in Israel found that 20,000 homes in East Jerusalem – 39 percent of all homes in East Jerusalem – lack Israeli construction permits.

Palestinian neighborhoods in Jerusalem are the target of Israeli settlement plans, which aim to link four concentric circles of settlements, starting with the Old City, followed by the “Holy Basin” (Silwan, Sheikh Jarrah, a-Tur, Mount Zion, and the Kidron Valley), Jerusalem’s annexation border, and finally the West Bank.

The United Nations Office for the Coordination of Humanitarian Affairs in the occupied Palestinian territories reports that Israeli authorities demolished 177 Palestinian-owned structures in Jerusalem in 2018, representing a 25 percent increase compared to 2017. In the West Bank, Israeli authorities demolished 283 Palestinian-owned homes, representing an 18 percent increase compared to 2017.

In total, Israeli authorities demolished 480 Palestinian structures in the West Bank and Jerusalem in 2018, representing a 21 percent increase compared to 2017.


RELATED READING:

The plight and blight of home demolition in Israel and Palestine

A cruel, yet very usual Israeli incident that almost nobody knows about

Israeli Soldiers Demolish A Kindergarten And A Women’s Center Near Jerusalem

Over Two Decades, The Pentagon Has Lost $10 Trillion

And the Defense Department has no idea where it went.

Over a mere two decades, the Pentagon lost track of a mind-numbing $10-trillion — that’s trillion, with a fat, taxpayer-funded “T” — and no one, not even the Department of Defense, really knows where it went or on what it was spent.

Even though audits of all federal agencies became mandatory in 1996, the Pentagon has apparently made itself an exception, and — fully 20 years later — stands obstinately orotund in never having complied.

Because, as defense officials insist — summoning their best impudent adolescent — an audit would take too long and, ironically, cost too much.

“Over the last 20 years, the Pentagon has broken every promise to Congress about when an audit would be completed,” Rafael DeGennaro, director of Audit the Pentagontold the Guardian recently. “Meanwhile, Congress has more than doubled the Pentagon’s budget.”

Worse, President Trump’s newly-proposed budget seeks to toss an additional $54-billion into the evidently bottomless pit that is the U.S. military  — more for interventionist policy, more for resource-plundering, more for proxy fighting, and, of course, more for jets and drones to drop more bombs suspiciously often on civilians.

Because, without the mandated audit, the DoD could be purchasing damned near anything, at any cost, and use, or give, it — to anyone, for any reason.

Officials with the Government Accountability Office and Office of the Inspector General have cataloged egregious financial disparities at the Pentagon for years — yet the Defense Department grouses the cost and energy necessary to perform an audit in compliance with the law makes it untenable.

Astonishingly, the Pentagon’s own watchdog tacitly approves this technically-illegal workaround — and the legally-gray and, yes, literally, on-the-books-corrupt practices in tandem — to what would incontrovertibly be a most unpleasant audit, indeed.

Take the following of myriad examples, called “plugging,” for which Pentagon bookkeepers are not only encouraged to conjure figures from thin air but, in many cases, they would be physically and administratively incapable of performing the job without doing so — without ever having faced consequences for this brazen cooking of books.

To wit, Reuters reported the results of an investigation into Defense’s magical number-crunching — well over three years ago, on November 18, 2013 — detailing the illicit tasks of 15-year employee, “Linda Woodford [who] spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense’s accounts.”

Woodford, who has since retired, and others like her, act as individual pieces in the amassing chewed gum only appearing to plug a damning mishandling of funds pilfered from the American people to fund wars overseas for resources in the name of U.S. defense.

“Every month until she retired in 2011,” Scot J. Paltrow wrote for Reuters“she says, the day came when the Navy would start dumping numbers on the Cleveland, Ohio, office of the Defense Finance and Accounting Service, the Pentagon’s main accounting agency. Using the data they received, Woodford and her fellow DFAS accountants there set about preparing monthly reports to square the Navy’s books with the U.S. Treasury’s – a balancing-the-checkbook maneuver required of all the military services and other Pentagon agencies.

“And every month, they encountered the same problem. Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from. ‘A lot of times there were issues of numbers being inaccurate,’ Woodford says. ‘We didn’t have the detail … for a lot of it.’”

Where a number of disparities could be corrected through hurried communications, a great deal — thousands each month, for each person on the task — required fictitious figures.

Murkily deemed, “unsubstantiated change actions” — tersely termed, “plugs” — this artificial fix forcing records into an unnatural alignment is common practice at the Pentagon.

Beyond bogus books, the Pentagon likely flushed that $10 trillion in taxes down the toilet of insanity that is unchecked purchasing by inept staff who must be devoid of prior experience in the field of defense.

This tax robbery would eclipse the palatability of blood money — if it weren’t also being wasted on items such as the 7,437 extraneous Humvee front suspensions — purchased in surplus over the inexplicable 14-year supply of 15,000 unnecessary Humvee front suspensions already gathering warehouse-shelf dust.

And there are three items of note on this particular example, of many:

One, the U.S. Department of Defense considers inventory surpassing a three-year supply, “excessive.”

Two, the stupefying additional seven-thousand-something front suspensions arrived, as ordered, during a period of demand reduced by half.

Three, scores of additional items — mostly unaccounted for in inventory — sit untouched and aging in storage, growing not only incapable of being used, but too dangerous to be properly disposed of safely.

Worse, contractors greedily sink hands into lucrative contracts — with all the same supply-based waste at every level, from the abject disaster that is the $1 trillion F-35 fighter program, to the $8,123.50 shelled out for Bell Helicopter Textron helicopter gears with a price tag of $445.06, to the DoD settlement with Boeing for overcharges of a whopping $13.7 million.

The latter included a charge to the Pentagon of $2,286 — spent for an aluminium pin ordinarily costing just $10 — the irony of whose 228.6 percent markup cannot be overstated.

Considering all the cooking of numbers apparently fueled with burning money stateside, you would think Defense channeled its efforts into becoming a paragon of economic efficiency when the military defends the United States. Overseas. From terrorism. And from terrorists. And terrorist-supporting nations.

But this is the Pentagon — and a trickle of telling headlines regularly grace the news, each evincing yet another missing shipment of weapons, unknown allocation of funds, or retrieval of various U.S.-made arms and munitions by some terrorist group deemed politically less acceptable than others by officials naming pawns.

In fact, so many American weapons and supplies lost by the DoD and CIA become the property of actual terrorists — who then use them sadistically against civilians and strategically against our proxies and theirs — it would be negligent not to describe the phenomenon as pattern, whether or not intent exists behind it.

Since practically the moment of nationalist President Donald Trump’s inauguration, the ceaselessly belligerent of the military-industrial machine have been granted a new head cheerleader with a bullhorn so powerful as to render calls to apply the brakes effectively, if not unpatriotically, moot.

Sans any optimistic indication thus far lacking from the Trump administration it would reverse course and move toward, rather than against, transparency, the painstaking audit imperative to DoD accountability remains only a theory — while the Pentagon’s $10 trillion sits as the world’s largest elephant in apathetic America’s living room.

For now, we know generally where our money is going: war. Which aspect of war — compared to the power of your outrage about its callous and reckless execution in your name — matters little.

Note: I posted an article on that subject on my blog a few years ago

#1 in a small market…

The trick is how to defeat Mass ennui: focused passion is the answer every time.

By Seth Godin

#1 in a small market is way more interesting, more fruitful and more fun than being number three in a larger market.

When you’re the market leader, you set the agenda, you attract the leading customers and you are the one who gets targeted, picked on and singled out. The stakes are higher and so is your impact.

The easiest way to become #1 is to redefine your focus and the way you serve your customers sufficiently that you redefine the market.

Harley Davidson isn’t #1 in the market for motorcycles, but they are certainly #1 in the market for the kind of motorcycle that they sell. The other bikes may have two wheels, but they’re for different customers with different needs.

Mass ennui is defeated by focused passion every time.

Tattoo thinking

A tattoo is basically forever.

You should think pretty hard before you get one, because it’s largely an irreversible decision.

Just about every choice you make with your project and your career, though, doesn’t last forever.

And the benefit of taking a risk is significantly higher than it is with a tattoo. A landing page, a pricing move, a bit of copy–they don’t last much more than a day, never mind a lifetime. Higher benefits, lower risk, what are you waiting for?

So go ahead and act as if your decisions are temporary. Because they are.

Be bold, make mistakes, learn a lesson and fix what doesn’t work. No sweat, no need to hyperventilate.

 

How Digital Platforms are Shaping Africa’s Informal Economy

A new digital generation of informal African entrepreneurs have adopted and adapted gig economy tools and digital platforms to meet their needs for a flexible and negotiable digital marketplace.

Apps that can drive demand and scale reach affordably are transforming African markets, opening up new opportunities for young Africans.

photo by Jeeva Rajgopal Wiego Informal Sector https://www.africancentreforcities.net/wp-content/uploads/2016/10/Seminar-input-24-Aug-Final.pdf

With contribution from Niti Bhan

When people think about the informal economy, this is the picture that often comes to mind.

What is often forgotten, is that the next generation of informal economy actors – mama mbogas, boda boda okada riders, wakulima farmers, traders, taxi drivers, matatu touts, drivers et cetera in Kenya and East Africa will be vastly different from the women depicted here.

The coming generation of Africa’s informal economy are today’s millennial digital natives – hungry, educated, exposed to global trends, with all the tools available to them like everyone else anywhere in the world.

Only with No prospects of formal employment on the horizon.

‘Informal’ is no longer synonymous to the streets, associated with the roadside, automatically defaulting to the marginalized or vulnerable – it is not a disease to recover from. The informal economy is an equal opportunity, organized and commercial operating environment offering Africans the chance to achieve their aspirations.

Africa’s prosperous future will only be realized by embracing the informal. This is not a choice.

While my thoughts are presented in the context of East Africa, I believe it resonates with the broader, global ‘gig’ economy. So perhaps my 60,000 ft view from Nairobi, East Africa rings true for the rest of the world.

Allow me to paint a picture for you using one of the sectors of the informal economy – trade.

Informal 1.0 : The Origins of Africa’s Informal Economy

Close to 80% of Africa’s human capital works and earns in the informal economy contributing between 35% to as high as 60% of Africa’s economies.

Pick a country anywhere in Sub Saharan Africa and you’ll find this to be true, be it Kenya, Uganda, Senegal, Zimbabwe, or Nigeria.

Despite this glaringly significant contribution, there is still a gulf between the mindset of people who play god in our economies and the informally employed.

The implicit biases of decision makers get amplified in the real economy at the expense of real people, hindering meaningful economic development for African people.

What do I mean by the informal economy?

One definition focuses on the enterprise, whereby the informal economy comprises economic activities which are beyond the purview of the state because they lie outside its framework of laws, regulations and protections.

A small proportion of these activities are illegal, but mostly they are activities which are simply not covered or partly covered by the state’s rules and regulations.

Another definition focuses on the nature of employment rather than characteristic of the enterprise.

The informal economy is seen as comprised of all forms of ‘informal employment’ – that is, employment without secure contracts, worker benefits, or social protection, both inside and outside informal enterprises, including self-employment in informal enterprises (small unregistered or unincorporated enterprises), and comprising of employers, own account operators, and unpaid family workers in informal enterprises.

Ravi Kanbur, a University Professor at Cornell University, attributes the current policy mindset on informality to two main historical sources —the academic and the administrative.

The academic theory  views informality as a symbol of under-development, a nuisance to be swept away and kept out of sight in the modernizing path of the national economy. The theory follows that as a modern economy grows, the size of the informal diminishes in favor of the formal.

The administrative mindset on the other hand traces its origins from the colonialist regimes that made a distinction between those activities that fell under the purview of colonial rules and regulations, and those activities that were beyond the legal and administrative reach of the colonial government.

Whenever you see Nairobi’s hawkers fleeing police and city council officials, it is these laws still in force today.

Both of these prevailing attitudes have meant that for a long time, the informal has been viewed as something to get rid of – frowned upon, pitied, viewed as native, perceived to be chaotic, disorganized, teeming with criminal elements. Informal employees were viewed as rejects who ended up in the informal economy for lack of choice.

Some of it is true.

In the past, as far back as the 80s, the people who ended up in the informal employment were the formally uneducated, who for one reason or another lacked school training and relevant skills or knowledge required for the formal economy.

Like my two dear Aunts from my father’s side now in their late 60s. They were not fortunate to study up to University level due to lack of means.

In the 80s and 90s they managed to carve out a place for themselves as biashara traders in the informal economy: Aunt Wangari in the mitumba (second hand clothes) trading sector while my aunt Njeri traded at Nairobi’s Marikiti: Kenya’s largest wholesale fresh produce market. It is what they did all their lives, and brought up 7 kids over that period until they retired.

But since my Aunts’ heydays, 30 years ago, the dynamics of the informal economy have changed and assumptions about people like my aunt and their operating environment have been unpacked. Niti Bhan Blog documents the changes over a decade.

As part of the  Borderland Biashara: Mapping the cross border, national and regional trade in the East African informal economy project, we discovered that a lot of prior academic work had, sadly, mischaracterized the informal economy. We found that

The lack of formal education was not a hindrance. You could start from scratch, learn and work your way up

There is a hidden class of informal sector workers that is not accurately captured by economic statisticians both in size and quality ( TED Talk )

Learning was through hands on practice, enabled by mentorship and apprenticeship. You learnt on the job

Contracts in the informal economy were built on trust and reputation

Marketing was by building strong relationships and word of mouth

Your social and trade networks was your greatest strength

The number of formally educated people was surprisingly high and on the rise

The sectors in the informal economy were innovative out of necessity to make up for gaps

There was no time or resources to waste. Every tool was thoroughly assessed for ROI

The impact of digital tools on these factors was magnitudinal

So the informal economy was not broken and did not require fixing.

Yet, old attitudes persist; the narratives that shape our media; policy recommendations by the McKinsey’s of this world; even the technologists are still in the mindset of the colonials. And, the unproductive friction between state agencies and the informal economy rages on.

Just look at some recent headlines from Kenya, Zimbabwe and Nigeria:

  • New City Hall team promises to restore sanity to Central Business District – Business Daily
  • How Zimbabwe’s Street Vendors Are Responding To Threats of Government Action – Ventures Africa
  • Ban on Street trading goes full throttle in Lagos – The Guardian

Informal Economy 2.0: How Mobile Phones Shaped the Informal Economy

A shift to a second generation of informal economy unfolded as East Africa’s rising literacy levels converged with the rise of telecommunication networks and sprawl of mobile phones, Aspirational, formally educated and able bodied men and women joined the informal economy.

Unlike their predecessors like my Aunt, they now had access to technology tools like the handy nokia 1110 for storing contacts, calls and SMSs coupled with the rise of Mpesa which introduced the ability to send and receive money remotely.

The image above is an illustration of Alice and her network, one of the many actors in this second generation enabled by the mobile phone.

Alice is a 43 year old informal cross border trade from Malaba – the borderland of Kenya and Uganda. She runs three lines of business: new leather shoes and bags, mitumba curtains, and school children’s accessories, operating out of a tiny physical store at Malaba. Her trade spans across Kenya, Uganda and Rwanda.

⇒On the demand side,

Alice mentors a network of traders including her sister who helps out at the store. She takes in both men and women looking for opportunities through referrals, mentors them on the trade, and incorporates them as retailers or sub-wholesalers under her wholesale business.

This network forms her sales and distribution network and she is able to manage everything by mobile phone since they are spread across the Western region of Kenya and other countries in Rwanda and Uganda.

⇒On the supply side

Alice is in touch with a supplier from Nairobi’s bustling Eastleigh area for her shoe business. She brings in raw leather material and outsources the stitching work to a cobbler in Malaba before stocking up her store.

For her curtains and mitumba (second hand clothes) business, she has a supplier from Kampala, Uganda. After meeting in person severally, they established a relationship that is now maintained by mobile phone. Sometimes she will take the trip to Kampala, sometimes she will delegate to her sister while the rest of the time they will communicate via mobile phone.

Like many other actors in the informal economy, a relationship with informal matatu, bus and boda boda system is necessary to handle the logistical nightmares.

Alice’s husband is a clearing and forwarding agent at the Kenya Uganda border cross at Malaba and helps out with the paperwork at the border crossing.

When she got started, Alice got the initial funding to kickstart her biashara from her parents and has since paid it back in full. She now sources financing from her chama savings group and Equity Bank and equally, supports her network with funding when necessary.

Her sister is gradually learning the ‘best practices’ of this informal sector from Alice and can now manage part of the biashara.

The second generation, like Alice, used all the tried and tested traditional offline methods of Biashara applied by my Aunts in the past: cultivating trust, building a network, establishing a rock solid reputation and spreading word of her business via word of mouth.

But, with an education and a bevy of tools available to her like mobile phones and mobile money Mpesa, they could amplify all the methods to scale across borders, no longer limited to her immediate physical environment.

In a lot of ways, Alice is a template of men and women in the informal economy. They could be in one of many trade and services in the informal economy and this description would still hold true, whether they sell vegetables, or mitumba bales or carpets imported from turkey; whether offline or online; whether in Kenya or Burundi.

What they are all looking to establish is multiple lines of business and move from retail to wholesale. These are the documented Biashara growth strategies we uncovered during our fieldwork at the borderland.

Informal 3.0: How Internet Platforms Are Shaping Africa’s Informal Economy

Ravi Kanbur attributes the persistence of informality in the face of economic growth in the last quarter century to fundamental trends in technology and trade which have smothered the employment intensity of growth in the formal sector.

Africa’s economies cannot generate enough formal jobs for all the young people born in the post 90s era. Less than 20% of East Africa’s human capital is employed in the formal sector. With not enough formal jobs to absorb the armies of youth churned out into the economy every year, the young men and women of Africa turn to opportunities in the informal economy.

Even the few employed in the formal sector either have gigs on the side and or are increasingly looking outwards for opportunities in the informal sector.

Simultaneously, in the last decade, the number of smartphones, prepaid mobile phone subscribers, mobile money and mobile internet users has dramatically escalated, converging with a global tide of web platforms. Young Africans have grown up in a post digital era where Mpesa, whatsapp and facebook are the norm.

Now, everything about Africa’s informal economy has been amplified by today’s electronic media.

Jane MitumbaThe 3rd generation informal traders are women like Mukami pictured here, who, while educated, could not find a job placement in the formal economy. She is one of many young Kenyans who fled to Bahrain and Middle East to scout opportunities. After a bad experience, Mukami returned home to set up shop.

Mukami is 33 years old, a mother of 2 kids and sells bales of mitumba out of her 5X5 square store on the ground floor of Tumani building in Gikomba.

Like Alice, she too is a cross border biashara seller with clients spanning Naivasha, Narok, Kitui, Mombasa, Kampala in Uganda, even as far south as Botswana.

Just like my Aunt in the late 80s and early 90s, she uses all the traditional methods of offline trust building, referrals reputation and word mouth. Just like Alice too, she has mobile phones and mpesa at her disposable for scaling.

But over and on top of my Aunts and Alice, the internet penetration and explosion of web platforms has opened up new opportunities to make use of Facebook, Whatsapp and Instagram to grow and scale her biashara networks unlike her predecessors.

⇒On the demand side

Mukami manages a facebook group of 198,000 people and 4,000 followers on instagram, mostly women from across Kenya and broader Africa.

Some followers are looking to become traders and she is happy to take them under her wing and nurture them as a mentor.  She teaches them all the tricks of identifying fashion trends and spot fake mitumba bales. As soon as they are ready, she furnishes them with full bales, that they can open and resell as single items on retail.

She will even recommend them on her group and let them sell to other members of the group.  This forms her sale and distribution network.

Once in awhile she will share pictures of models and mannequins draped in some of her clothes – this is how you match this trench coat with a pair of heels – generating engagement in form of comments from buyers from different countries.

Most of her leads will first interact with her online via comments, then facebook messages, followed by connecting on whatsapp and phone before eventually following up with a visit at her store in Gikomba. Other leads stem from referrals from satisfied clients. Every lead is nurtured, and a relationship cultivated via her platform pipeline.

Mukami attributes 80% of her new leads to her customized Facebook group.

Her supportive team includes her husband, who helps out with managing the facebook group as co-admin so that one of them is always available to quell customer anxiety. She also has employed two assistants, Alfred, a 23 year old who is taking the opportunity to learn the ropes, because he too, one day wants to join the trade and rise up the ranks. Wafula is the delivery guy and takes care of errands.

Across town, one of Mukami’s long time mentees, a 27 year old Wanjiku quit her formal job to get into selling mitumba handbags full time.

While working at a law firm, Wanjiku quietly dabbled in the mitumba trade as a side gig, sourcing designer handbags from Mukami, cleaning them up, taking pictures and sharing with her whatsapp, instagram and her facebook page. In the last 2 years, it has grown large enough that she is now ready to quit her formal office desk job, and join Mukami as a full time biashara trade.

This new generation of the informal economy is opting out of “formal” economy because it makes sense to do so.

Our research concludes that because this 3rd generation is educated and digitally native, they will leverage all the new emerging platforms to scale because the roadside is no longer restricted to next to the street; the street has been scaled to whatsapp and SMS and calls and facebook groups.

The long tail of industrialization and globalization

Today, in Kenya, you can open the business papers and immediately spot three stories of entrepreneurs who are involved in different types of manufacturing – charcoal briquettes; fortified flour; paper bags – at different scales of operation. Yet all three would tell you that the bulk of their business enquiries and sales come from online platforms and social media.

All are university educated and see themselves as micro-entrepreneurs and employers. That is, there’ s a whole new demographic of value creation taking place at the grassroots of the Kenyan economy that straddles the challenges of the real world in which they must make their goods and deliver them to customers; and the online world which is where they build a brand and promote their products, generating new business leads and sales.

These hidden value creators are the new generation of tech savvy, young, educated entrepreneurs who toil unseen to put food on the table, not only for their own families, but also for their entire networks of suppliers and service providers.

We can trace their supply chains stretching invisibly from the east coast of Africa all the way to the Pearl river delta of east Asia.

This network includes merchants, traders, wholesalers, retailers, transporters, and a host of intermediaries involved in lowering the barriers to the flows of value being exchanged along the line. Now, the entire supply chain can run on mPesa, as Safaricom – Kenya’s leading telcom giant – ties up with Chinese payment solutions, and with Western Union, to span the globe or Kenya’s Family Bank, which recently partnered with SimbaPay to launch instant transfers to China’s WeChat

This economic ecosystem may never resemble the conventional models of industrialization and globalization, nor the textbook diagrams of linear, hierarchical supply chains. But it is flexible, digital, decentralized, and responsive to rapid changes in consumer taste and market demands. This is the foundation of Informal 4.0, the recognizable reality of the transforming African economy harnessing the power of connectivity, communications, and commerce on the phone.

This essay was inspired by this twitter thread

Much thanks to Niti Bhan for her thoughts, contribution and 4 years of inspiration.

Recommended readings

Rethinking the informal economy  – Martha Alter Chen

Borderland Biashara: Mapping the cross border, national and regional trade in the East African informal economy – Emerging Futures Lab

The hidden opportunities of Africa’s informal economy  – Niti Bhan

It’s time to drop meaningless formal-informal economic model – David Ndii

Mindsets, Trends and the Informal Economy –  Ravi Kabur

CEDRE Reform Program: Learning from Paris III

November 27, 2018 | English |

By Sami Atallah, Mounir Mahmalat and Sami Zoughaib

Lebanon’s poor track record of implementing past ‘Paris’ reform programs looms large over the recent CEDRE conference.

In order to make CEDRE a success and avoid past mistakes, policymakers, international donors, and civil society must understand why previous reform programs failed.

By analyzing the design of the Paris III reform agenda, this policy brief derives guidelines for the formulation of the CEDRE reform program to increase its feasibility and thereby its likelihood of success.

We provide a framework to assess a reform program based on institutional requirements, which categorizes a reform measure according to the degree of involvement of political actors from different parties and institutions.

Applying the framework to the Paris III reform agenda shows that it was poorly designed by failing to reflect the capacity of the Lebanese state to enact reform.

More than half of all reform measures exhibited high requirements and necessitated approval from a parliament that, at the time in 2007, was paralyzed and sidelined over mounting political tensions.

Several measures for fiscal consolidation and privatization were unrealistic and prone to institutional bottlenecks, such as parliamentary paralysis, which could be used by the government to justify inaction.

In total, the government enacted only 14% of all high-requirement and about half of the low requirement reform measures.

For CEDRE, the international community’s approach to designing the reform program must reflect the low capacity of the Lebanese state to enact reforms by focusing on enhancing administrative capacity in public service delivery in order to increase the likelihood of success.

How Lebanon is systematically looted and “legally”? First case: the Parliament expenses

Do Lebanese know that our deputies write on paper and send letters for $9 million? That the deputies read enough books and magazine for another $9 million? Another $9 million for upkeep of an exclusive library?

How about $300 million for clothes and another $300 million for cleaning the perimeter?

Do you know that our 124 deputies are allocated $9 Billion as compensation Not related to their monthly salary?

This totally unproductive Parliament rob the people of 60 billion LP each year

Read on the budget that demonstrates how the Lebanese citizens are robbed “legally”

: *مصاريف مجلس النواب 😗

*١٢٠ مليون ليرة قرطاسية*
*١٢٠ مليون ليرة للكتب والصحف*
*١٠٠ مليون ليرة لوازم مكتبية* 
*٤٠٠ مليون للملابس و ربّك عليم لمين هالملابس ومين بيلبسها*
*٧٠٠ مليون محروقات لوسائل النقل*
*٣٠٠ مليون لصيانة وسائل النقل*
*١٥٠ مليون لاستئجار سيارات وآليات*
*٤٠٠ مليون لنفقات الخدمة والتنظيفات*
*12 مليار و386 مليوناً مخصصات للنواب هيدي بس مخصّصات ما خصها بمعاشاتن*
*١٥ مليار للموظفين الدائمين*
*و ٤٥٠ مليون للمتعادين و ١٧٥ مليون للأجراء*
*٣٥ مليون تعويضات عن أعمال إضافية*
*و ٥٠٠ مليون تعويض عن نقل مؤقت*
*١٥٠ مليون تعويضات لنفقات اجتماعية*
*و١٠٠ مليون تخصّص للمكافآت*
*و مليار ومئة مليون ليرة على الوفود والمؤتمرات في الداخل*
*ومليار و٢٠٠ مليون على الوفود والمؤتمرات في الخارج*
*و٥٠٠ مليون على الدراسات*
*يعني ميزانية مجلس النواب ٦٠ مليار و٣٢٤ مليون ليرة*
*يعني ٤٠ مليون دولار دولار بالسنة*

*دولة منهوبة وبطريقتهم القانونية*


adonis49

adonis49

adonis49

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