Out of Africa: Too much of a good thing creates challenge in Tanzania

When I was a small boy I loved chocolate. Cake, ice cream, candy bars — anything blessed with a hefty dose of cocoa and sugar was a whiff of heaven.

Being a child (and somewhat of a glutton), I could never understand why one couldn’t just have chocolate for every meal. It was a question I recall rolling around in my mind in the years before my ninth birthday and the logic at the time was fairly sound. Chocolate is good. It is better to have good things more often than bad. Hence, chocolate should be eaten more often than not.

During one family vacation as a child, I managed to put this logic into action. While my parents were busy with road planning, I casually managed to ensure that every snack and a part of every meal I ate one day included chocolate. The immediate result was my immense satisfaction at having tipped the balance of order in the world to my favour.

However, the following morning I awoke to find myself covered in an immense swath of red and itchy blotches. After a quick trip to the doctor, I was diagnosed with a good, old-fashioned case of the hives. The cause? An allergic reaction from eating too much chocolate.

Needless to say, my logic of the good was altered that day — and changed forever after a week’s worth of oatmeal baths and calamine lotion. Although I still believe that chocolate is good and that it is better to have good things more often than bad, I learned that too much of a good thing can actually make things worse.

What does anything about a nine-year-old Prairie boy gorging on chocolate have to do with life in Tanzania, East Africa? Well, a lot actually.

Although chocolate is something in scarce supply in this neck of the woods (consistent temperatures in the 30 C range, a lack of refrigeration and an economy unable to support luxury food purchases will do that), the reality of an obvious answer contributing to, rather than solving, a problem is somewhat in abundance.

Without a doubt, poverty and unemployment are massive problems in Tanzania. By official estimates, those without work account for 35 per cent of the population — and that includes the under and seasonally employed workforce. Whether it is through government programs or charitable organizations, a consistent response to chronic unemployment and poverty has been to turn to enterprise, especially micro-enterprise, development. In clearer terms, it has meant that a solution to a lack of employment has been to promote self-employment via the opening of one-room shops engaged in retail petty trade or small-scale services (tailoring, carpentry, milling, etc).

The immediate results of the micro-enterprise solution have been tremendous and have undoubtedly helped to lift millions out of poverty. However, a decade later, micro-enterprise in Tanzania is beginning to become like a chocolate binge to a nine-year-old.

Take, for example, the small stationary business a friend of mine started close to 10 years ago. In the first year that he opened his shop in a rural town, about the size of Minnedosa, two other stationary businesses soon emerged.

With a little dose of local competition, all three of the businesses realized a small degree of prosperity. Today, there are 17 stationary shops in the same town — many of them side by side. With an overdose of local competition, their profit margins actually place them below the international poverty line of US$1.25 per day.

At an alarming scale, the story of my friend is not a unique one in Tanzania. It is an identical narrative describing close to every type of business you can imagine here. No market can support an enterprise for every single citizen nor does every citizen want (or have the unique set of skills and savvy) to manage a business.

In reality, some people just want to get up in the morning and go to work. That becomes increasingly challenging when the only way to get a job is opening a shop that realizes enough market share to keep one in, rather than lift one out of, poverty.

More disturbingly, the cumulative result of too much chocolate, I mean micro-enterprise in Tanzania are multiple. No one advertises the price of their products (every sale is bartered to squeeze the most out of each customer); prices actually tend to rise (each business reacts by trying to realize as much profit as possible from every transaction); getting a loan becomes next to impossible (every business is essentially identical and unprofitable) and services actually decline (cheap, imitation products flood the market and means are limited to extend a warranty or offer a repair).

While micro-enterprise can help to solve the poverty problem, it is not the only answer. In East Africa, that translates to supporting the growth of the businesses that are already there to provide real jobs and quality services.

Bringing about the sweet smell of success in Tanzania isn’t going to happen by just adding more chocolate — it will only come by making the chocolate better.

» Josh Sebastian is from Brandon-Westman and is currently working on international development projects in Tanzania, East Africa.

Republished from the Brandon Sun print edition August 20, 2012