The fastest growing city in Africa

Is the claim of a fascinating new paper on Juba by Richard Grant and Daniel Thompson (HT: Sean Fox).

Juba, the capital of South Sudan, is the fastest growing city in Africa, exhibiting the most rapid urban expansion and growth ever to take place in the region. Despite its explosive demographic and infrastructural expansion, the urban explosion has received virtually no attention from urban scholars.

since 2005 [Juba] recorded spectacular urban expansion: at upwards of 12.5% per annum, the city’s growth is among the fastest rates of urbanization in human history. [Population] has more than doubled in the past seven years to at least 500,000-600,000 by 2012.

On the urban economy:

The sudden and massive influx of development aid and investment drives local property and consumer markets 

Juba functions within a highly unequal cash economy: while Juba can be among the most expensive cities in Africa (for example US$200 for a basic hotel room and seasonal food price hikes); simultaneously, subsistence wild food harvesting is necessary for many food-insecure urbanites.

On urban livelihoods:

the urban poor concentrate on firewood collection, informal construction (digging pit latrines, stone breaking, and mudding traditional dwellings), charcoal making (exacerbating deforestation), petty trade (tea and food selling), motorcycle taxi (boda-boda) driving, and brewing alcohol.

And on rural "land grabs":

analyses showing approximately 5% of total land is under cultivation 

Between 2007 and 2010, 8% of South Sudan’s total land area was acquired by international private interests (firms from the US, Egypt, UAE, and UK are the largest investors)

Getting by in Rwanda

I can't get enough of these vignettes on the lives of the poor. 

Suprian Ndorimana, 12, lives in the outskirts of Kigali. 

I wake up at 4 a.m. and think about what to bring to the market for my customers. My mother goes to the garden every evening and gathers what I carry to the market. 

At around 7 a.m. I arrive at the market and business starts. 

I do not go to school because of the kind of work I am doing. It helps us in the family a great deal. Since I am the first born, I am basically the one in charge of my siblings. 

Even my mother encourages me to keep running this business as opposed to going to school when my young sister is just beginning to go to school. 

This is the business I have been doing for the last two years. Our family has gone from worse to better and my mother is very happy with me. 

I finish preparing the following day’s produce at around 7 p.m. and take supper around 8 p.m., after which I go to bed.

A day in the life of a child market vendor, New Times

Dismus Nsengiyera, 20, is a street vendor, selling items like sweets in Remera, Gasabo district 

I always wake up at 7a.m and take a shower. Ordinarily, since I am not a rich person, I skip breakfast. The money I would have used for breakfast, I save it and add it on what I have for lunch. 

My job is so complicated and it requires some patience. Sometimes, I earn nothing and go back home empty handed. 

At around 10am, I keep on the lookout because police can fix you if you are not careful. Sometimes, I keep running away from the police. We are not allowed to sell in the middle of the streets. 

Once in while, the police confiscates our things. This means, you have to go back home without a single coin. I use Frw3000 every day to buy what I will sell in the day but some times, I end of gaining nothing. 

Before 2pm, my lunch, is over and I start working till 6pm and I retire back home. When I reach home, I head straight to bed. I rarely have supper.

A day in the life of a street hawker, New Times

Agonising over tiny moral problems

I take motorbike taxis to work most days here in Kigali. They are convenient, regularly roaming around the streets so you never have to wait long, they are fun, and they are cheap. A trip around town costs somewhere between 50p and £1, depending on how far you are going and what time of day it is. Which isn't bad compared to the £7 you can pay for a return tube trip in London if you forget your oyster card. It is so cheap I haven't bothered using my transport allowance (though perhaps I am under-pricing the small risk of accidents somewhat).

Most expats I speak to seem to worry about getting "ripped off" by paying a higher price than locals. As there is no set price or meter, you need to haggle. It isn't about the money (perhaps 20p), they say, but about the principle. And perhaps they are right. Perhaps they are all intuitive economists, who understand that it is their consumer surplus, and that the driver is engaging in price discrimination. "Consumer surplus" is the name in economic theory given to the gap between the maximum price that the buyer is willing to pay, and the minimum price that a seller is willing to accept. "Price discrimination" is where a seller tries to charge different prices to different customers (based on their ability to pay), in order to capture some of this surplus. Both phrases - consumer surplus, and price discrimination, suggest that maybe the expats are right to feel aggrieved at being conned out of their 20p. But does economic theory really tell us anything about the ethics of this situation?

For a concrete (and realistic) example, suppose the price for locals is about 50p, but the driver asks me for 70p. We are still a long way from the £2 it costs for that single tube trip in London (with the oyster card). Of the £1.50 consumer surplus, the taxi driver (who earns perhaps £2,000 a year at purchasing power parity - roughly the average income in Kigali*), is conning me out of 20p (13% of the surplus). I'm keeping £1.30 (87% of the surplus).

Is that really in any sense wrong? Or on the contrary am I wrong to keep so much of the surplus? Particularly given that the main reason I earn more than 10 times what the taxi driver does is not that I'm smarter or harder working, but that I was lucky enough to be born in a rich country not a poor one. What are the ethics of that?

Of course haggling can be fun. I often make a mock protest at the price, and then just leave a big tip and round up to £1. Thirty pence seems pretty cheap for a very big grin.

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* Just realised that is average household income, so probably a substantial over-estimate of individual income. 

Exploring the Portaloo Product Jungle

The Great BBC series African Dream profiles entrepreneur Moses Nderitu, who went from being a TV producer to setting up Kenya's first portable toilet rental business almost by accident. He needed to buy a portaloo, but couldn't just ship 1 to Kenya, so had to ship 4. And then slowly started persuading people to rent them from him. And now employs 20 staff in his booming loo rental business.

Which is a lovely illustration of Hidalgo and Hausman's product space theory of economic development. The economy is a bit evolutionary, with lots of random leaps, but some products (and services) are closer together, and so it only takes a small leap (like Nderitu's). Some are much further apart. So the things that an economy can produce tomorrow depend a lot on what you can produce today (learning by doing and path dependence are not new ideas in development economics, but this is a sophisticated new data-driven way of looking at it).

Or as Rodrik puts it

think of the product space as a forest, goods as trees, and entrepreneurs as monkeys. Countries develop as monkeys jump from tree to tree. Trees further away are harder to jump to. Some parts of the forest are denser than others. What trees you have monkeys on today determines where your monkeys will be tomorrow. And it goes from there.

Gettin’ by in Lagos

The BBC documentary, Welcome to Lagos, now on YouTube. This is really really good.

HT: Marginal Revolution

Factory work. Nearly as good as marriage.

Hera is a 45-year-old woman living in a village in Manikganj District, about an hour and a half by road from Dhaka.

This is her life history, as told to IFPRI researchers. (HT: @davidroodman)

Gettin’ by pouring drinks

Meet Dominic Loki.

The business

First, I worked as a Gardener, then a cleaner, before finally becoming a Barman. I only went to school until Senior 4 in Uganda.

The costs

Most hotels provide all the logistics needed for survival - accomodation and food.

Although the costs I encountered in turn on my family are high for me. For my two wives in Torit, I send them 150 pounds [$50] every 2 months. For the one in Juba, I give her 50 pounds per month.

The pay

I earn 25 pounds [$10] in a day … I also make side income from customers who give me tips in appreciation for serving them … My mandate is to save all the salary I make. I usually ask the cashier to pay me at the end of the month.

With [my savings] I have managed to build a small 14 roomed lodge with a bar in Eastern Equatoria. This is another big boost to my income.

Typical day

I am up by 5:30 a.m. each day to count the available drinks and also to clean up bottles and glasses for customers. After a hard working day, I go to bed after serving all my customers. Sometimes at midnight, sometimes at 2 o’clock.

From the South Sudan Business Week, May 31 2010.

The economics of pirating

A basic piracy operation requires a minimum eight to twelve militia prepared to stay at sea for extended periods of time, in the hopes of hijacking a passing vessel. Each team requires a minimum of two attack skiffs, weapons, equipment, provisions, fuel and preferably a supply boat. The costs of the operation are usually borne by investors, some of whom may also be pirates.

To be eligible for employment as a pirate, a volunteer should already possess a firearm for use in the operation. For this ‘contribution’, he receives a ‘class A’ share of any profit. Pirates who provide a skiff or a heavier firearm, like an RPG or a general purpose machine gun, may be entitled to an additional A-share. The first pirate to board a vessel may also be entitled to an extra A-share.

At least 12 other volunteers are recruited as militiamen to provide protection on land of a ship is hijacked, In addition, each member of the pirate team may bring a partner or relative to be part of this land-based force. Militiamen must possess their own weapon, and receive a ‘class B’ share — usually a fixed amount equivalent to approximately US$15,000.

If a ship is successfully hijacked and brought to anchor, the pirates and the militiamen require food, drink, qaad, fresh clothes, cell phones, air time, etc. The captured crew must also be cared for. In most cases, these services are provided by one or more suppliers, who advance the costs in anticipation of reimbursement, with a significant margin of profit, when ransom is eventually paid.

When ransom is received, fixed costs are the first to be paid out. These are typically:

• Reimbursement of supplier(s)

• Financier(s) and/or investor(s): 30% of the ransom

• Local elders: 5 to 10 %of the ransom (anchoring rights)

• Class B shares (approx. $15,000 each): militiamen, interpreters etc.

The remaining sum — the profit — is divided between class-A shareholders.

From the UN Security Council via UN Dispatch via the Browser

Barely getting by

Walking through the markets of Juba, women selling vegetables, tea and managing local food outlets catch your eyes most.  We do not do these odd jobs because they are our favourite, said Elizabeth Wani, a tea seller. “This is the only way we can find an income since we are illiterate,”.  Ms. Wani like most of her colleagues makes a living of less than 15 Sudanese pounds (5$) per day.

 

Betty Nyadeng, a 15 year old serving in a local hotel makes 10 Sudanese pounds (3$) in a day which caters for her two daughters and four siblings. “If I had an education, I would be earning more for my siblings,” she said upon tears. She added that her eldest sister passed away while giving birth early this year due to the hard times she went though while pregnant.

From SudanVotes.com

The SSCCSE are killing me, I can’t wait to see some published household survey data.

HELLISH JOURNEY TO JOB YOU DESPISE TO COST MORE MONEY THAN EVER

I’ve got nothing to say today. I have a strange chronic fatigue, perhaps heat-related, which doesn’t seem to be abated by sleep. So Here’s the Daily Mash.

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THE horrific, soul-destroying journey you make every morning to the job that makes you want to die will soon cost a record breaking amount of money.

Yes, you can

Something called the AA said that by the end of the week the price of turning the only life you have into an empty, meaningless process of breathing in and out, interspersed with the joyless consumption of shaped meat will reach a new high of £1.20 a litre.

They said you would be angry about it because the price of the thing they use to make the stuff that goes into the machine you use to get to the place you hate had gone down, in what you described as a spectacular example of completely missing the point.

Tom Logan, who endures roughly 220 minutes of hell a day between Grantham and Peterborough so that he can do something that does not involve music or art or spaceships, said: "What do I care about the price of the thing they use to make the stuff?

"I don't want to be here. Do you understand that? If the price of the thing was linked to the price of the stuff would I be able to spend all day designing spaceships, playing the bongos and baking lovely pies in the comfort of my own shed? I suspected as much.

"So instead of spaceships and bongos and pies I'll be spending slightly longer at my desk so that I can continue to afford the journey to get to my desk.

"You see, on the one hand you're asking me whether something must be done about the price of the thing in relation to the price of the stuff and on the other hand I'm saying that everything about the way we live our lives is completely and utterly wrong in every conceivable way."

He added: "I'm not even sure what I do here. I think it might be something to do with mobile phone tariffs."

Gettin’ by cooking chapattis

 

(Photo credit: Christopher Lindahl)

One of my favourite Juba lunches is from the Ugandan chapatti guys next to the De-Mining Commission. For about $1 you get a big plate full of eggs and beans with either rice or chapattis.

I always wondered what brought these guys to Juba, and whether they really earned so much more than they did in Uganda.

Lo and behold, the South Sudan Business Week provides the answer (I’m trying to persuade the editor to start a website - you can too - email him at badru dot mulumba at gmail dot com).

Serunkuma had listened to a million stories of how there as a lot of money in Juba; having heard and seen several people return home with a lot to show.

So he spent $10 to spend a week riding on top of a beer truck from Kampala to Juba (saving $15 on the 1-day bus trip).

After an abortive dabble in the construction business, Serunkuma decided to be self employed.

“With my 140 pounds ($50), I decided to start a chapatti business.” In Jebel market, Serunkuma bought a frying pan for $10, paid rent for $4, bought a few packets of wheat flour and salt and he was ready to roll.

Having started with just a few packets of flour now Serunkuma bakes 8 packets and serves chapatti with beans. “I know earn 100 pounds ($30) a day. This is the money I used to earn in two months in Uganda when I used to work at a shop back in the city.

With a total saving of at least $120 a month, Serunkuma has been able to set up a poultry farm back home; and now employs 5 people to work on it.

…

“While in Uganda, I just couldn’t do certain jobs because the neighbourhood is at watch and wants to know what each neighbour’s son is doing for a living. And when it’s a crappy job, they will laugh at your parents. But here, nobody knows me and in fact, my hard work is people’s happiness.”

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See also Gettin’by with a Senke here, and Myles Estey’s series on Gettin’ by in Liberia.

Gettin' by with a Senke

The idea blatantly stolen from Miles Estey's "Gettin' By" series, here are the economics of riding a Senke (cheap Chinese motorbike) boda-boda (motorbike taxi) for a living in Juba (taken from the South Sudan Business Week).

"Meet Senke Rider Who Out Earns GOSS (Government) Staff"

John Modi started borrowing a Senke to earn a few Sudanese Pounds after arriving back in Juba from a Ugandan refugee camp, and failing to find a job. After 6 months he had saved $750, enough to buy his own Senke.

"I am out of the house by 7am to drop my first client to work… I end my work at 8pm, take my supper and relax with my boys in our hood."

Modi has 3 regular customers who he takes to work and back every day, giving him something of a regular wage. The rest depends on the day, and whether it is raining or not.

"The income from a Senke is not regular … the tricky part of being self-employed is how to save the money. Income that comes in drips is hard to save. If one is not careful that money slips through the fingers."

A standard fare in Juba is $2. Modi tries to save the money from the first 10 trips ($20), and use anything on top of that to cover his daily expenses, such as lunch ($2.50), breakfast ($2) and a "White Bull" beer at the end of the day ($1). He also gets another $20 a day from his 3 regulars, paid in a lump sum at the end of the month.

"It also helps that compared to Senke business in neighbouring Uganda, in South Sudan, the costs are lower."

These costs amount to just under a dollar per day for insurance, plus the one-off cost of $115 for a licence plate, and some occasional $5 fines from the traffic police.

"If I had taken up a job in my management profession in Uganda, I wouldn't be earning half of this money."

There is of course, unmentioned in the article, a reasonable risk of death or injury. I see a smashed-up motorbike on the tarmac on a weekly basis, and it is only getting worse as more and more roads are paved in Juba. Bumpy dirt roads at least impose something of a speed limit. Still, I'm betting that $40-$50 a day puts you pretty high in the income distribution in Southern Sudan.

(Photo Credit: White African on the Rise of the Motorcycle Taxi in Africa)

More jigy-jigy

According to Google Analytics THIS is my most visited post. You filthy people.

Anyway I've been meaning to post a follow-up since I was sent this story by a friend about a new Steve Levitt paper based on

"detailed and real-time transaction data for over 2,200 tricks performed by about 160 prostitutes in three Chicago neighborhoods that the authors collected with the help of pimps and prostitutes."

She suggests that Juba's "unmarried businesswomen" could learn from it how to reach a more realistic price per ejaculation / night. Well economics works in Juba too, according to the Khartoum Monitor. It's only $2 if you want to have "jigi jigi" with the ugly girls, but of you want a moderate girl it'll cost you $4, and for the beautiful ones it's a whole $8.

Office Hawkers

A couple of years ago I spent the summer working in the office of a Microfinance firm in Uganda. One of the great features of office life there was the lady who would come by once a week with shoes or accessories to show to the women in the office. I was very jealous that I don't like ladies shoes or accessories.

In Juba the newspaper guy is pretty regular which is nice, the only trouble being that the writing isn't exactly going to be winning any prizes anytime soon. Today though, I did my first proper office-based shopping, a guy came round selling flash drives just when I've lost both of mine and I'm too busy to make it into the shops in town.

Jigy Jigy

A solution to the budget crisis from a friend at UNDP. Go Dutch and start taxing the East African "unmarried business women" who are undercutting the locals for "Jigy Jigy."

Pity the poor "undercover" journalists who wrote this piece.

My friend also suggests we might need some "hookers without borders" to advise these ladies on their pricing strategies. $5 for one ejaculation and $10 for the whole night!