By Guest Author Bruce McNamer
More than one billion people are going hungry on a daily basis, according to the United Nations World Food Programme. On average, that amounts to more than one out of every seven people on the planet. With our global levels of wealth, knowledge and resources, that number is unacceptable to me. The inextricably linked issues of hunger and poverty have been – and continue to be – great challenges. The economic crisis has only exacerbated these problems. Still, a lot has been done already to fight this epidemic. But what really works? How do we close this gap?
Aid is essential, but it must be used effectively. Our experience at TechnoServe shows that private sector development is a viable solution to eradicating poverty and its surrounding issues, helping to create a positive impact on communities in developing nations. Giving a hand up instead of a hand out is essential in helping those in need.
Providing economic opportunities allows for a multitude of benefits including improvements in food security, education, health, business development, safety and overall quality of life. The thriving cashew industry in the small village of Namige, Mozambique demonstrates how identifying high-potential entrepreneurs and giving them the tools to achieve success is a way to locally solve these global issues.
The cumulative impact of decolonization, civil war, misguided policies and natural disasters brought cashew production to a virtual standstill in Mozambique and contributed to the nation’s struggle with poverty. In 2001, TechnoServe linked entrepreneur Antonio Miranda with Shakti Pal, a technical expert in the industry. Pal recalls that Miranda had “no real money, but an idea,” and each man was immediately impressed with the other. In a unified effort to reinvent the local cashew industry, we hired Pal to train Miranda in how to set up and run a cashew processing business.
A do-it-yourself ethic prevailed as Miranda welded, Pal designed, and the factory was built entirely by local workers using local materials. We introduced a job-generating processing model that ensured minimum wage salary, health insurance and child care for all employees – and contributed to economic regeneration.
In 2002, on the opening day of business, more than 1,000 people showed up for 64 jobs at the first factory. Two years later Miranda Caju was operating at a capacity of 1,500 tons and employed more than 400 workers. Miranda’s success proved to be an effective blueprint and within six years of the Namige opening, 24 “new model” factories were in operation throughout Mozambique. TechnoServe also helped several factory owners to form Agribusiness Industries Association (AIA), a private services company that launched the Zambique brand – a quality mark – and managed the export supply chain.
In 2008, Mozambique’s factories combined to process over 23,700 tons of cashews – and TechnoServe ceased direct support. TechnoServe’s 16 client cashew processing plants bought nuts from over one hundred thousand small-scale producers and had total sales revenues of $12 million, employing more than 4,700 employees and paying $1.6 million in wages.
In a sign of modernity and growth, Namige is becoming a market town. Since 2002, the number of vendors in the central market has more than tripled. Approximately 30 operators now conduct business there. The town’s growth has sparked newfound interest among teachers, nurses, government workers and entrepreneurs. Fatima Sualehe, a bar owner from Namialo, for example, spent the May Day holiday visiting her sister-in-law and exploring the types of businesses she might introduce to Namige.
The benefits go beyond workers’ financial gains. Community members almost universally note that life is better since the arrival of the cashew industry. Parents now have money to buy school clothes, supplies and books for their children, materials to build or improve their homes, and an occasional luxury item, like a radio, at one of the town’s several new shops. Moreover, communities are safer – children are now seen outside of their homes in the early evening (before, there streets were nearly deserted by 4 p.m.).
As a result of investing in one entrepreneur’s vision, families in Namige and beyond have transcended hunger and spurred a domino effect of positive developments. I strongly believe in creating self-sustaining industries that continue to thrive long after our business advisors depart and feel that this is the way of the future for improved economic freedom, health and equal opportunity. I commend the United Nations for pledging $58.8 billion to help countries in need to deal with the economic crisis. My only advice is to be vigilant with how this influx of aid is applied.