Category: Business

Stepping out in style in harsh economic times

A pair of second-hand, suede, black, six-inch boots arranged on the pavement catches her eye as she walks to the nearby bus stop carrying her mid-month household shopping from the Tusky’s supermarket a few meters away. In the shopping bag she has a packet of baking flour, a kilogram of sugar, four packets of milk and four toilet rolls. She pauses to admire the shoes and the man, sensing an opportunity to make a sale, leaps up to serve her.

A Kenyan vendor sells second-hand clothes, locally known as 'mitumba', at an open-air market in Nairobi. (Pic: AFP)
A Kenyan vendor sells second-hand clothes, locally known as ‘mitumba’, at an open-air market in Nairobi. (Pic: AFP)

Ni size gani? [What size is it?]” she asks.

“Forty shillings,” the street hawker responds.

Kujaribu ni bure [Trying it on is free],” he says.

Before she can resist the hawker has reached out to help. He puts her shopping bags in a safe place and helps her put on the boots she has been admiring. It is a perfect fit.

Ni how much?” she asks as she walks a few paces to get a feel for the shoes.

“It’s 800 shillings ($9).”

“What? That’s so much,” she retorts.

Bei ni ya kuongea [The price is negotiable],” the hawker replies.

The haggling goes on for a while and she finally settles for a price that she can manage. This woman is a reflection of others in Nairobi who rely on second-hand clothing and shoes to ensure they look good despite the harsh economic times.

Escalating prices
The escalating price of commodities is straining the life of the average Kenyan, especially those living in the city, who are already struggling to survive.

Kenya’s GDP growth rate stood at 5.2% during the first quarter of 2013 and the unemployment rate in the country stands at an estimated 40%. The cost of living has also greatly increased. A litre of milk today costs about 90 shillings ($1). Ten years ago the same litre of milk cost about 50 shillings. Mortgages, car loans and food budgets are increasing and many are left with the bare minimum from their monthly salary to cater for expenses, like buying clothes and shoes, that are expected to go with one’s social image.

But at the thriving second-hand businesses, located in open-air markets and small stalls in town, one can haggle over the price of anything, from shoes and clothes of all types to undergarments and bags. The hawkers that sell these items stay open up much later than regular clothing shops. The more adventurous hawkers are known to come to the downtown streets of Nairobi with their wares at night, when the regular businesses have closed and the nightlife is just beginning.

This presents an opportunity for those who work late and do not have an opportunity to shop during the day. It also targets people who did not think they had a budget for clothes or those who suddenly find themselves desperately in need of an item of clothing.

I myself have benefitted from the convenience of a roadside hawker. On one occasion my supervisor sent me to a meeting across town. City traffic in Nairobi can turn a 10-minute walk into a half-hour commute by car, so taking a taxi would not have made sense. Instead I opted to walk there in my impractical high heels. That evening, as I was making the painful 30-minute walk to the bus stop, leaning heavily against a colleague, I came across a hawker selling shoes on the pavement.

There was only one pair of sandals among the many closed shoes and high heels on offer. Without waiting for the hawker to offer to help, I picked up my heels, asked him to pack them into a paper bag for me and slipped my feet into the sandals. I did not waste time haggling, as I desperately needed the sandals. But they were so cheap that I didn’t feel cheated – they cost just 250 shillings ($3).

A boon for women
Second-hand clothes and shoes have been a boon to Kenyan women looking for clothing at an affordable price. Retail shops charge high prices. A blouse at Mr Price, considered to be an upmarket shop in Kenya, may cost up to 2 000 shillings ($24). The same blouse could be had second-hand for 800 shillings ($9). If one is really good at haggling, the prices could be as low as 600 shillings ($7).

Some savvy shoppers have even found ways to capitalise on the demand for second-hand clothing. Twenty-something Akisa Mathenge has made a business out of second-hand clothes shopping. Her unique selection of the clothes from second-hand stalls has many people asking if she could be their personal stylist and buy them second-hand clothes for wear at the office, church or home.

“I really enjoy dressing people up. When I find a client who wants me to buy them second-hand clothes, my first question is always to find out what they like wearing. I also suggest changes to their wardrobe to style them up. When I see a customer happy then I feel fulfilled,” Mathenge adds.

Her service includes bringing the range of clothing that she’s selected, carried in large bags, to her clients homes. But this has become more difficult as her business has expanded. With business picking up, she’s now considering getting her own stall so she can stock more clothes. Even though her paycheck does not always come on the expected day, she is able to meet all her expenses through this side business.

As luxury goods like clothes and shoes becoming more expensive for ordinary Kenyans, the second-hand clothing business is set to thrive for a long time to come.

Mary Itumbi is a journalist based in Nairobi.

Zimbabwe’s coffee farmers struggle amid global boom and political gloom

A misty dawn has not yet given way to daylight in Zimbabwe’s eastern highlands. Lenard Moyo, a coffee farmer near Chipinge town, is prising red arabica beans out of their trees and putting them in his bag – as he does every morning during harvest season. “It’s hard when it’s so cold outside, but we have to pick them early,” he said.

A woman harvests ripe coffee berries. [Pic: Reuters]
A woman harvests ripe coffee berries. [Pic: Reuters]
Zimbabwe’s coffee belt has the perfect growing conditions for the beans: high mountain peaks and cool climates, and the country used to be famous for its “super-high-quality” product, slowly sun-dried, and tasting smooth and fruity. In the 1990s it produced some of the best coffee in the world, alongside South America and Kenya, generating crucial foreign currency and a livelihood for many labourers and small-scale farmers, as well as the big commercial farms.

But today the industry is in decline: many of the mills have been abandoned, farmers are in debt, and Zimbabwe produces just 60 “bags” of coffee beans a year compared with 250 bags in 1988 – with one bag amounting to 60 tonnes of coffee.

Earlier this year the European Union announced €10m (R132-million) in aid to Zimbabwe’s medium and small-scale farmers, in an attempt to revive the industry. But there’s a catch. “Coffee is an important crop and we’ll consider funding requests from small farmers provided the land involved is not in dispute,” Aldo Dell’Ariccia, head of the EU delegation to Zimbabwe, told the CAJ news agency.

Moyo said this caveat disqualified the majority of farmers. “Most of our small coffee plots are on land being contested in court by former white farmers. We’ll simply not qualify,” he said.

The disputes began in 2000, when young militants loyal to the president, Robert Mugabe, stormed white-owned farms to reclaim the land. At the time, Moyo was what was known as an “out-grower” – a black farmer owning a small plot of land next to a large commercial farm, relying on his neighbours for finance, expertise and machinery.

Production plummets
“First, [the militants] pruned down our coffee beans and burned hectares of trees in a week of rage. Coffee drying pens were turned into nurseries for marijuana and wild vegetables,” he said. “The new farm owners wanted instant profit but a coffee tree once planted takes three to five years to mature.”

Production plummeted as the new landowners could not secure bank loans to buy fertilisers or repair ageing infrastructure. Many were new to the business, and lacked the expertise to keep quality high.

In turn, international buyers began to shun Zimbabwean coffee, and in 2010 the Mutare Coffee Mill, considered one of the best in Africa, was forced to shut down. It required at least 4 000 tonnes of coffee to operate profitably but was receiving just 300.

And while Zimbabwean coffee growers struggle, elsewhere the industry is booming. Ten years ago the average cost of a tonne of coffee was $1 400, now it can fetch up to $4,000 (R39 400), according to the International Coffee Organisation.

“Zimbabwe is losing billions of dollars annually as the price of coffee has increased to about $3 per pound, up from $1 per pound in the 90s,” Gifford Trevor, president of Zimbabwe’s Coffee Growers Association, told News24.

Most of the country’s coffee farmers lack cash reserves to support themselves when the crop fails or yields are low, according to World Vision. The charity is training farmers and offering much-needed supplies such as fertilisers, irrigation systems and pesticides. But the farmers are still unable to compete with better organised growers in countries such as Rwanda, Kenya and Malawi.

Suppliers at a disadvantage
The global coffee industry is also stacked against suppliers, with the bulk of the profit going to those further up the chain.

In August, on a sponsored trip to Johannesburg, 39-year-old Moyo tasted his first cappuccino. “I thought it was bitter lemon,” he said. He was particularly horrified to pay $3 for one cup, compared with the $5.30 he receives for a bag of raw coffee beans.

Peter Multz, a former consultant for the Dutch charity SNV, which works with Zimbabwean farmers to improve their business skills, said most of the profit went to shippers, roasters and retailers. He said Zimbabwean farmers also faced particular problems.

“Sometimes the coffee is delayed at border crossings for up to a week, and without proper facilities the beans go bad. Sometimes buyers have to pay a bribe to let their coffee shipments go through,” he said.

With a more stable economy and western governments starting to release aid, Zimbabwean farmers hope that the country’s coffee industry will recover. But for Moyo times are still hard: “I can’t even pay my farm workers and coffee pickers properly,” he said. “Sometimes we reward them with milk, soya meals, and clothes after every harvest. As we say here, cash is a crunch.”

Ray Mhondera for the Guardian Africa Network. Mhondera is editor of The Africa Scientist Magazine.

Stretching resources in Kenya’s ‘kadogo’ economy

We Kenyans are always in a rush. Life in this country is an unending quest to make that extra coin or stretch the available one in our booming economy. Consider the situation three years ago when Kenyans were constrained by the rising global prices of fuel and maize, the national staple food. The price of maize flour squeezed hard at the already empty pockets of slum dwellers, who responded in the popular Unga revolution street protests.

A woman waits for customers outside her shop in a Nairobi slum. (Pic: Reuters)
A woman waits for customers outside her shop in a Nairobi slum. (Pic: Reuters)

While urging the government to reduce the price of maize flour from a high of 120 Kenyan shillings (around R12) to 30 shillings (R3), slum dwellers invented the “kadogo – or small – economy to stretch their fast-depleting resources. Not only could they now afford three square meals on less than a dollar a day, but the country’s manufacturing industry followed suit.

In the kadogo economy you get to eat according to the amount of money you have. With one rand, you can slurp on steaming bone soup and a mound of ugali, a cake made of corn. A dish of sardines costs nine shillings (50c) and for the same amount one can afford cooking fat. A spoon of sugar costs a shilling (11c), tea leaves are doled out in ever smaller packs for the same amount. Margarine, detergents, soaps, and candles, are halved and quartered to ever smaller amounts that range from a few grams to a hundred grams. “Fifty bob” – 50 shillings or about R5 – would be enough for three square meals a day. Manufacturers have taken note of the kadogo economy and these days even shops in middle class neighborhoods stock products in medium, large, and tiny packs.

Kenyans also noticed that sending money to friends and relatives using Western Union, MoneyGram, and the national postal service was costly. We skirted around this problem and bought phone credit instead, then sent it to the receiver who would convert the credit into cash from the nearest shopkeeper, who earned a small commission. It’s how the world’s first and most successful mobile money transfer system, Mpesa, was born. Every year billions of dollars are exchanged on the platform.

Judging by the numerous civil servant salary strikes, we have landed on the hard times yet again. In a country blessed with entrepreneurial zeal and ingenuity it came as a surprise when the government last month arrested five officials of a group that had found a solution to its neighborhood’s economic woes. The destitute residents of the sprawling Bangladesh slum near the coastal resort of Mombasa, a place where jobs are scarce and the Kenyan shilling is uncommon, introduced Bangla-Pesa (“Bangla-money”) as an alternative currency.

Informal currency
Bangla-Pesa is a voucher or promissory note, which can be exchanged for cash or services at a later date. The system has been seen as an effort to strengthen the economy of the informal settlement.

For instance, a bicycle operator may have the capacity for 20 customers a day, but in general only has 10. He can give rides to other people in exchange for Bangla-Pesa, which he can trade for goods or services – like tomatoes or a haircut – that another Bangla-Pesa vendor may offer. This increases the overall efficiency of the market and helps the community during tough economic times.

Some 200 businesses have agreed to accept the currency, and in return, each has been awarded a credit of 400 Bangla-Pesa. These credits circulate among registered members only. Bangla-Pesa charges no interest on transactions and its membership comprises 75% women, who live below the poverty line and run their own small businesses. Participating businesses include laundries, tailors, builders, salons, and people providing mechanical, electronic repairs and farming services.

Bangla-Pesa is an informal currency, which can be exchanged for cash or services.
Bangla-Pesa is an informal currency, which can be exchanged for cash or services. (Pic: Koru Kenya)

In June, six members of the initiative found themselves guests of the state, and were held in police cells for three days. They were initially jailed on suspicion of being members of a secessionist group. When this was found not to be the case they were charged by the Central Bank of Kenya with forgery for holding a printed voucher. The penalty? A possible seven years in jail.

One of Africa’s top investment bankers, Jimnah Mbaru, rubbished the accusation, saying on Twitter: “Bangla-Pesa is just a promissory note liquidatable at a later date. It is discountable in the secondary market. It is not illegal.”

In fact no one has ever been arrested for using Bangla-Pesa’s predecessor, Eco-Pesa, which was formed in Kongowea in 2010, to help clean up trash in the crammed settlement whose dense population lacks the infrastructure to dispose of trash and sewage. Local youths were paid five Eco-Pesa for each trash bag they filled and deposited at the nearest landfill. They then spent this cash at local businesses to buy goods and services from other local sellers or exchanged it for shillings. After three months of using Eco-Pesa, the monthly income of businesses in Kongowea rose by 22%, and the settlement rid itself of 20 tonnes of trash.

Now tongues are wagging among Nairobi’s chattering class that the financial institutions are leaning heavily on the government to come down hard on the Bangla-Pesa founders and members because they fear the alternative currency may appeal to the masses who are daily looking for a way to escape the excruciating high interest rates charged by banks.

In August, the director of public prosecutions dropped all charges against the Bangla-Pesa group members on the basis that they have not broken any Kenyan laws. They are currently waiting for the Central Bank to release their confiscated vouchers and for the government to officially recognise the programme.

In the meanwhile, the 12 000 inhabitants of the Bangladesh slum will have to continue hustling, hoping for an opportunity to make an extra coin or to stretch the ones they have.

Munene Kilongi is a freelance writer and videographer. He blogs at The Peculiar Penguin.

Ghana’s first farmers’ market: ‘We need more like this’

There are some things about public gatherings in Ghana’s capital Accra that are guaranteed. A certain amount of dust and Atlantic spray on the breeze, a sound system blaring Azonto – a local music sensation – just a bit too loud, fearless children lining up to show off their moves, and an orderly row of canopies where the hot and the tired sit down on plastic chairs and take stock.

But if you looked a little closer at the fair in Ako Adjei park on Saturday, you would have found that what appeared a typical Accra event was quietly masking something quite unusual: a farmers’ market. The dozen or so small-scale producers selling their wares at The Accra Green Market were busily making history as participants in Ghana’s first ever fair for locally grown, sustainable, organic produce.

A fruit seller holds six-day old egg plants from Ghana.
A fruit seller holds six-day old eggplants from Ghana. (Pic: AFP)

“This is a great way to give exposure to organic, local products,” says Jeffrey Mouganie, 22, founder of Moco Foods, an organic company that produces local forest honey and fiery chilli sauce, guaranteeing a traceable supply chain and hiring workers with disabilities. “The only space we usually get to market our products are at the bazaars of international schools, where we sell to a lot of expats,” he says. “But we need more markets like this – the best feedback we have had for our products is from Ghanaians.”

Moco’s Savannah Honey, on sale here for 10 Ghana cedis – approximately £3 (R45) – is being exported to the UK where it will go on sale at Harrods and Selfridges for what the producers expect to be around five times that price. Also on sale, organic mushroom wine – said to be a treatment for practically every medical condition from sclerosis to high blood pressure, asthma and “sexual weakness” – pak choi, gloriously frothy-leaved heads of broccoli, watermelon, small, knobbly carrots, and tough-skinned, tangy nectarines full of seeds and sweet-sour juice.

The organisers of the market believe they are part of a new trend towards sustainable, organic and local food, which they say goes hand in hand with the growth of Ghana’s new middle class. “Things in Ghana are changing – it is no longer a poor country but a middle-income country. And because of that, people are more interested in what they eat,” says Edison Gwenda Abe, 29, founder of Agripro – a mobile application company that provides farmers with access to marketplaces and which organised the Accra Green Market. “In East Africa, farmers’ markets are already really popular, but in West Africa, there is nothing like this. We plan to take it to different locations in Ghana, and we have had interest from Nigeria too.”

New interest in organic food
Constance Korkoi Tengey, founder of Immaculate Gold Beads, Mushrooms and Snails, is typical of the kind of small-scale grower whose products the market is designed to showcase. An energetic 62-year-old who carefully dishes out mushroom sandwiches, mushroom salad and mushroom gari foto – a veggie version of a popular Ghanaian dish made from cassava tubers – Tengey began growing mushrooms in her back garden seven years ago and says sales are on the rise.

“I eat a lot of mushrooms as a substitute for meat, and I’ve noticed that I don’t gain as much weight, and it keeps me looking younger,” Tengey says. “People in Ghana are becoming more health-conscious these days, they are really showing an interest in my products. It’s a profitable business for me.”

But it’s not only shoppers who are fuelling Ghana’s new interest in organic food. The city’s ever expanding directory of hotels, restaurants and cafes has an insatiable appetite for local products and high quality produce. “There are a lot of new eateries bringing in foreign chefs, and as a result the quality is getting higher,” says Sadiq Banda, an organic grower in Accra who supplies some of the city’s five-star hotels.

“Chefs are always looking for the best produce, and there is a great need for more local food producers to supply them. The Ghanaian middle class is growing too, and becoming more interested in quality. But Ghanaians are still mainly interested in conspicuous consumption – they do not tend to spend money on high-quality things unless other people can see them doing it, and fresh produce is not yet a priority.”

Ghana may still have some way to go in grasping the concept of organic, whole foods. Alongside the organic avocados on one stall were tins of corned beef, canned sardines and mayonnaise, where young women were zealously composing “salad” – a concoction of oily, processed products with a dash of fresh vegetable to top it off. And Ghana being Ghana, there is a strong affection for the deep-fried. My taste award went to Tengey’s “Kentucky Fried Mushrooms” – not blessed with a name that conjures up all things fresh, small-scale and local, but they tasted quite simply amazing.

Afua Hirsch for the Guardian Africa Network

Bringing coffee culture to Khayelitsha

Department of Coffee sits in the middle of the chaos of Khayelitsha Mall and the train station. This up-and-coming coffee spot prides itself on being the only one that operates in Khayelitsha, one of the largest townships in South Africa. Three years ago, a trio of young entrepreneurs – Wongani Baleni, Vusumzi Mamile and Vuyile Msaku – who hail from the community approached the Ministry of Service Delivery, an investment vehicle that supports social entrepreneurs, to make their dreams of opening a coffee shop come true. They secured a loan from the organisation and set to work on the building, branding and development of what is now a promising enterprise.

Department of Coffee opened its doors in July 2012. To celebrate its first anniversary, the owners recently hosted a coffee-tasting event for the public. Baristas effortlessly kept four different kinds of cappuccinos flowing, while we tasters sipped on each and cast a vote for the one we preferred most. The excellent green cappuccino earned my vote.

Owners Vuyile Sweetness, Vusumzi Mamile and Wongama Baleni outside Department of Coffee. (Pic: Facebook)
Owners Vuyile Msaku, Vusumzi Mamile and Wongama Baleni outside Department of Coffee. (Pic: Department of Coffee’s Facebook page)

Near the staircase, an architectural drawing of the coffee shop’s future hangs on the wall, slightly skewed. Once the building expansion plans are complete, Department of Coffee will have a covered seating area facing Ntlazane Street while the current seating in front of the shop will be barricaded. This is great news –  sitting outside with the chaos of people walking through the row of tables, smoke from the women braaing chicken feet next door and the cacophony of the train station is a little distracting.

(Pic: Facebook)
Plans are in place to develop a covered seating area outside the coffee shop. (Pic: Department of Coffee’s Facebook page)

Department of Coffee has a lively, bustling vibe compared to the quiet energy of the coffee shops in the CBD where the loudest thing you hear is a spoon dancing inside a cup. The ground floor is literally a stage to showcase local talent every last Saturday of the month. Local artists perform for an often packed and excited crowd.

There are also crafters, their heads bowed, all at work, some weaving beads and some carving wood into human faces. Mgadi, a local artist, carves his signature shacks onto an A4-size canvas. “I have clients in Sweden, Denmark, Netherlands and for those I make large-sized artwork,” he tells me.

Baristas prepare customers' orders. (Pic: Facebook)
Baristas prepare customers’ orders. (Pic: Department of Coffee’s Facebook page)

Baleni, Mamile and Msaku are determined to convince Capetonians in the city that Department of Coffee is the place to escape to. However, the other challenge apart from attracting a wider customer base is to carve one from the society in which they are located. Just 14 months on, they appear to be doing this really well. They sell an average of 200 cups of coffee a day at an affordable R8.50 each. This is a lot cheaper than coffee shops in the city, where you can expect to fork out up to R20 for a cuppa.

I am at Department of Coffee every other day, not just for their coffee but for the convenience and the vibe. The location is perfect for me –  it is in the marrow of the township, allowing me to absorb the energy of the streets and the people in between sips of my cappuccino. Across from where I sit, the ladies selling braaied corn, cow intestines and chicken feet fling me back to my childhood in the remote Transkei village of Zikhovane. And for these 20 minutes, I exist contently in two worlds at once.

Department of Coffee is located at 158 Ntlazane Street, Khayelitsha. Opening hours: Monday – Friday 5am to 6pm; Saturday 8am to 3pm.

Dudumalingani Mqombothi is a film school graduate who loves reading, writing, taking walks and photography. He plans to write a novel when his thoughts stop scaring him.