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(originally published by Booz & Company)


Executives without Borders

A commodities exchange is already being proposed for Ethiopia. But without a strong structural and governance framework, any commodity exchange established in the region will quickly fall prey to corruption and speculation. The ESF could play a critical role by putting the necessary checks and balances into place. The ultimate aim would be to teach local traders and business leaders how to run an exchange on their own.

Using such a system, the Sahel could monetize medicinal herbs and plants endemic to the region, a US$65 billion worldwide market that has barely made a dent in the Sahara. Some plants, such as gum arabic, which purportedly soothes inflammation of the throat and stomach, are already harvested to a degree in the Sahel, but there is no formal mechanism to bring gum arabic to market, despite the fact that it generates $90 million in international sales.

Although some businesses have tinkered with sending salaried consultants to developing countries on pro bono projects, such projects tend to be temporary and focused at the higher levels of government. The ESF, however, would be far more adventurous, appealing to executives’ altruistic instincts while giving them an opportunity to apply real business learning in exciting, uncharted settings. ESF would target mid-career managers with experience, drive, and a sense of joie de vivre. There could also be an opportunity for companies to get involved directly; for example, FedEx might donate 15 employees a year, who would each serve four years with ESF while remaining on FedEx’s payroll.

ESF could also work with an increasing number of business-focused NGOs, such as Technoserve, which aims to improve technological development in poor regions — for instance, implementing tracking systems to record the handling and packaging of medicinal plants in Chad. Together these groups could create plans for illiterate and remote communities to make best use of new technologies. One initiative could be centered on solar power. With the introduction of solar panels, villages could become energy self-sufficient and nearly carbon neutral, which could generate additional subsidies.

Industrial-scale projects might follow: The sun-scorched Sahel is an ideal location for a solar farm, which could provide electricity to the region. Another could be the introduction of innovative new stoves, such as solar cookers that use foil to concentrate sunlight and collect heat, greatly reducing the need for firewood to cook food, or mobile phone text-messaging services that help herders find the best market price for meat and milk.

There is no quick fix to the problems facing the Sahel. But although poverty will continue to dominate the region for the foreseeable future, it can be alleviated somewhat. With the assistance of an organization such as ESF, the local population can become more independent and begin to improve the quality of life. Something new must be attempted in the Sahel that promotes local rather than centralized control of commercial activities — something that encourages the development of small and midsized business in the informal community sector, rather than larger businesses in the much smaller formal sector.

Author Profiles:

Jonathan Ledgard ([email protected]), Africa correspondent for the Economist and a contributor to the Atlantic Monthly, writes about politics, business, war, and environmental issues. His case study on Skoda, the Czech car maker, appeared in the Fall 2005 issue of strategy+business. His novel, Giraffe (Penguin Press, 2006), was named Library Journal Book of the Year.
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  1. John D.H. Lambert, Per A. Ryden, and Enos E. Esikuri, “Capitalizing on the Bio-Economic Value of Multi-Purpose Medicinal Plants for the Rehabilitation of Drylands in Sub-Saharan Africa” (The World Bank Global Environment Facility Program, 2005): A study on the potential value that medicinal herbs and plants could have for Sub-Saharan Africa. PDF Download.
  2. George Obulutsa, “Ethiopia Plans Commodity Exchange by End 2007,” Reuters, June 7, 2007: Recent article about the efforts in place to build an Ethiopian commodities exchange. Click here.
  3. Médecins Sans Frontières Web site : Nonprofit organization that offers emergency medical aid to the countries around the world that need it most. Click here.
  4. Solar Cookers International Web site: Nonprofit organization that provides information about solar cookers and the technology to set up the cookers in developing regions. Click here.
  5. Technoserve Web site: Nonprofit organization focused on growing businesses in developing countries. Click here.
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