Herman Chinery-Hesse is Ghanian and runs SOFTtribe, one of Africa’s largest software companies, and he is not a happy camper. In a must read interview with Kernel Mag if you are interested in African software, he details the woes that his business is facing in winning government contracts. Highlights:
All too often, the Ghananian software entrepreneur says, key public sector contracts go not to local African companies, but to first-world suppliers recommended by development agencies or their Western government backers. Even African governments are turning their back on local firms, in favour of the established multinationals, he says. And the results are stifling African enterprise.
SOFTtribe makes heavy duty software, workaday tools, think POS systems, payrolls, ERP and capital management systems and they have done well in the private industry but not in government because
African governments are, he suggests, more likely to place technology contracts with firms in Germany, France, the UK or the US, than with one in Accra.
The problem as Herman put it, is that what works for Paul definitely does not work for Peter:
“Our area of expertise is Land Rovers, not the Rolls Royce,” he says. “We make Third World stuff, and most people don’t know how to do that,” he says. “The [aid] organisations keep getting our governments to buy Rolls Royces, but they are not suited to our environment. They are vulnerable to our environment. I’m not saying that Africans are sharper than anyone else, but we know our market.”
This brings about in its wake another issue:
Local African companies are also losing contracts they held with the local operations of multi-nationals, as those companies try to consolidate their software around global standards. These companies often waste their money, Chinery-Hesse argues, on trying to install complex software on top of more basic African infrastructure – trying to drive the Rolls Royce down a dirt road. They would be better off integrating local software with their global back-office systems, or using a version of international software customised to environments where bandwidth, and sometimes power, are uncertain commodities.
Herman argues that, kind of counterintuitively to modern perception, that the Internet is actually driving business away from local companies because when there was no Internet, local business had to deal with the local software companies, which will make the field tougher for upcoming startups. This has transformed Chinery-Hesse into an African entrepreneurship advocate with a slogan of:
Enterprise, not Aid
I like. And Chinery-Hesse knows where the problem is coming from, both large companies making good profits, and aid agencies being satisfied with the status quo:
“Large companies around the world, in conjunction with the aid agencies, are creating debt,” he says. “They are selling us stuff they can’t sell in Europe… it stifles local industry.”
Aid agencies and donor organisations are too comfortable with the status quo, reluctant to take risks, and reluctant to bring about change […]
Chinery -Hess just wants a level playing field, and I definitely agree.