Profiting from poverty: Do some companies benefit from twisted images of Africa?

Tuesday, July 15, 2014

Today, Africa’s investment and business potential is making headlines, with McKinsey’s statistics of growing consumer spending power commonly quoted alongside the fact that the continent is home to six of the world’s 10 fastest growing economies. With this narrative shift comes the view that Africa needs trade, not aid, to prosper, as the former results in sustainable development, while the latter leads to dependency on handouts.

According to Nigerian-American journalist and author, Dayo Olopade, the perception that Africa needs western assistance to survive is often exploited by profit-seeking businesses.

Olopade is the author of The Bright Continent: Breaking rules and making change in modern Africa, a book she spent three years researching whilst travelling across the continent. She says a key goal of her work is narrative correction concerning Africa.

In a recent interview with How we made it in Africa, Olopade explains that some for-profit western companies reinforce and leverage the existence of poverty as a clever marketing tactic and brand differentiator. She uses the example of US shoe company, Toms Shoes, which has trademarked the slogan “One for One” where for every pair of shoes the company sells, a pair of new shoes is given to a needy child.

“The fact that they leverage the existence of people without shoes, or more specifically the perception that there are people without shoes, is kind of dishonest… Not only are there shoes available across many parts of sub-Saharan Africa for local purchase, there are people who are making shoes in Africa who are employing people, creating capacity, creating skills and training, and steady income and formal sector employment,” argues Olopade.

She adds that companies like Toms, which seem charitable in their donations, are actually depressing the local economy and “reinforcing the incorrect perception that people in poor countries can’t afford anything”.

Source: HowWeMadeItInAfrica (link opens in a new window)

Categories
Entrepreneurship, Impact Assessment
Tags
Base of the Pyramid, poverty, profits, social entrepreneurship, social impact