Herman Chinery-Hesse — Business vs. Aid & Charity

Software Entrepreneur, Ghana

Only Africans can develop Africa. I don’t know of any country in the world where, once again, a bunch of foreigners came and developed the country.… We have to sink or swim ourselves. And Africa can!

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Herman Chinery-Hesse—Development Capital Right Under His Nose

When Herman Chinery-Hesse returned to his native Ghana in 1990 after studying manufacturing at Texas State University-San Marcos, he quickly realized that while he aspired to start his own company, he had no money to launch a manufacturing enterprise. But sitting around one day he realized, “Hey, wait a minute. My little computer I had here, sitting in front of me, was a factory; it could make software.” He had been dabbling with computer programming for a couple of years as a hobby, and he thought, “I could turn this into my manufacturing business.” So he partnered with an old schoolmate, and they started writing software for the travel industry and selling door to door. “Sometimes we got, ‘Go to hell,’ and sometimes we got, ‘Well, we’re interested.’” It was hand to mouth in the early months, but soon they bought a second computer and hired an employee. “We were programming out of my bedroom, sitting on my bed, and then we evolved from there and grew and grew and grew.” They named the company theSOFTtribe.

Herman Chinery-Hesse—Turning a Problem into an Opportunity

One problem they faced early was the stress put on software throughout much of Africa. “There were heavy, serious power problems in our part of the world; people couldn’t afford expensive software systems; people were not very computer literate.” Chinery-Hesse and his partner turned the problem into an opportunity, becoming pioneers in what they refer to as “tropically tolerant” software. “We created protocols and technologies that made our systems robust, to work well in this environment,” he explains. “You have to be very innovative. I mean, to get the systems to work out here, it was just what we had to do. Everybody builds Rolls Royces, but we’re in Africa; we build Land Rovers. And we got good at it, and our software sold well for that reason.”

Herman Chinery-Hesse—Foreign Aid Undercuts African Business

A second challenge that a fledgling SoftTribe faced was generated, ironically, by the system of international foreign aid. As much as half the Ghanaian economy is run by the government, and as Chinery-Hesse says, “to a large extent our governments have been held captive by the donor agencies—the international donor community—who are not, in my view, particularly interested in seeing the growth of local business.” For evidence he points to firsthand experience: “When we talk to the government, the government says, ‘Hey, we’re not allowed to buy with donor money local products; that’s just the way it is. It’s their money; they decide who gets it.’ And this has been a big dilemma for us.”

Herman Chinery-Hesse—An Entrepreneur’s Entrepreneur

Undaunted, Chinery-Hesse and his partners have continued to grow their business in the private sector. He also has launched a second company, Black Star Line Global (BSL), which works to connect African businesses to international markets through an electronic platform that does many of the things PayPal and EBay do but goes one step further: it’s enhanced by a system of phone-minute cash cards that allow electronic money transfers between even the most basic cell phones, sidestepping the need for personal computers for online commerce. As the company website explains, BSL seeks to empower “everyone from the micro-trader to the industrialist, promoting prosperity, self-reliance and empowerment.” 

  • Chinery-Hesse on Africans Developing Africa

    Only Africans can develop Africa. I don’t know of any country in the world, once again, where a bunch of foreigners came and developed the country. I don’t know one: Japan? Korea? No! No country did that. The U.S. was not developed by Nigerians. I don’t know where that formula is coming from; there’s no precedent… We have to sink or swim ourselves. And Africa can!

  • Chinery-Hesse on Why the World Bank Should Focus on Private Property Rights

    We haven’t got clean title in Ghana. It’s very, very difficult. You buy land, you have to buy it four, five times. Last time I had a meeting in the World Bank, I asked the World Bank officials, ‘Hey, you’ve been working with our government all these years. You know this is at the bottom of our problems, that fundamental unknown, and what are you doing about it? Are you saying for twenty years you just forgot that we have a situation where anybody’s business, anybody’s house can suddenly come into question, and they might just lose their investment and that it wouldn’t encourage people to invest?’ I don’t see that a lot of work has been done there or a lot of progress has been made there.

  • Private Property Rights as Fundamental to an Economy

    The absence of land title absolutely hurts the poorest of the poor. Sixty, seventy percent of our people are farmers. Just imagine, if you have ten million farmers who have no title to the land they are farming on. They can’t take it to the bank to get a loan to get farm implements. Whereas if they were allowed to buy the land, it may take them six years of share cropping to then own the land, then they could take that land out to the bank, get a loan, and get a tractor. Now, if you are stopping them from doing this for generations and generations, it’s chronic poverty. You are creating chronic poverty. They need to own their land and trade their land. The good ones amongst them will become large farmers, the ones that are not so good will become medium sized farmers, and the bad ones will end up working for the large and medium farmers. And they’ll have good jobs that pay them, like America, a good job that pays them a good decent wage every month. Maybe they are not entrepreneurial, but they will get a job.… You can’t start an economy without ownership not being in question. This is my fundamental.

  • Foreign Aid = Foreign Influence

    No, no, no, I’m not ungrateful. I just don’t think that the formula that is required for Africa to develop is what they are implementing. They are implementing, in my view, what will give, the best political influence to Western governments, and therefore, to Western companies. And this has been the formula all along.

  • Advice to Bono

    “Three, four months ago … there was a big fan club around him, and he came in on a particular agenda. It was a World Bank type operation…. For the record, I love Bono. I happen to know Bono, so I love his music and he’s cool. And I was born in Ireland, so we’ve got that in common. Now, I have nothing against Bono, but somebody like Bono can help the process by working with African countries to execute their own agenda, not an imported agenda.

  • Invest in Africa

    Instead of giving it away, it should be put into small business loans, that kind of thing, and tightly managed by professionals, not in a airy-fairy ‘we love Africa’ way. That doesn’t help us. The people here are not stupid. They’re just disconnected from global trade, that’s all.

  • African Politicians Beholden to the World Bank

    The politicians sometimes can be very childish, and they’ll cut their noses off to spite their faces. And they can do this, once again, because they are not depending on tax revenue. They are more interested in a smile on the World Bank country director’s face than the success of my business, because they really are not depending on me as much as they are depending on the World Bank for their livelihood and their survival.

  • The Mixed Agenda of the World Bank

    I think that the World Bank and a lot of the donor organizations have an agenda outside the development of our countries. They bully our governments into positions where our governments are not in a position to make the decisions that are required for the rapid development of our countries. And I don’t blame them. If the World Bank officers—gave us—good advice, we’ll become a developed country. If we become a developed country, then what happens to them? They are out of a job.… You can’t have your moneylender determine for you how you run your business, because he’ll ensure and guarantee that you stay in debt, because he’s living off your interest.

  • The Land Problem in Africa

    We have a serious land problem here. Nobody’s attacking that, as far as I know. I haven’t heard any NGO. I hear them talking about child labor, gay rights, and so on and so forth. Not to say that they aren’t important. But in the scheme of things, when people need money and a livelihood, we need to focus first on things like property rights so that the land tenure problem is solved, so people can take their ancestral land and borrow money against it to set up businesses and pay tax. That’s where we should be going. That’s where our survival is; that’s where our money is; that’s where our progress will come from.