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Mobile Phones, Livelihoods and the Poor in Sub-SaharanAfrica: Review and Prospect

Gina Porter*Durham University

Abstract

This review paper focuses on the potential of widespread access to mobile phones for improvingthe lives of poor people: the opportunities that mobile phones have already provided, or may soonpresent, for enhancing their material well-being. Following a broad review of the diffusion ofmobile phones across Africa, discussion is restricted principally to one key issue, livelihoods, dueto space constraints. Attention is paid to the linkages between virtual and physical mobilitythroughout the paper and the final section reflects specifically on possible interactions betweenexpanded virtual mobility and sustainable transportation in the continent, an issue of considerablesignificance for future development potential in our increasingly carbon-constrained world.

1. Introduction

The expansion of mobile phones in sub-Saharan Africa, particularly over the last fiveyears, has been remarkable in terms of speed of adoption and spatial penetration. By theend of 2008, Africa had an estimated 246 million mobile phone subscribers, comparedwith just 25.3 million in 2001 and c. 82 million in 2005: moreover, numbers are growingfaster than in any other part of the world (Etzo and Collender 2010; International Tele-communication Union (ITU) 2009). Various media reports based on industry assessmentssuggest that the figure had reached 500 million by mid-20101. Even for many very poorpeople in sub-Saharan Africa, including children, the mobile phone is now perceived asan essential requisite: an object of desire and a symbol of success.

This review paper explores the potential of widespread access to mobile phone tech-nology to improve the lives of poor people: the opportunities that mobile phones havealready provided, or may soon present, for enhancing their material well-being. Discus-sion is restricted principally to one key issue, livelihoods, due to space constraints2. Tech-nology transfer to Africa from Western contexts has a long history and its impact inrecipient societies has been varied and complex (e.g. James 2002; Stamp 1989). It maygenerate new forces of production and new social relations, which may be positive ornegative, but it can also transform detailed tasks and activities without changing funda-mental asymmetries and inequalities, notably those associated with gender relations (e.g.Buskens and Webb 2009; Cockburn and Ormrod 1993; Kitetu 2008; Stamp 1989).Among development agencies, the rapid diffusion of mobile phone technology and otherICTs in Africa has been widely perceived as a potentially exciting, increasingly essentialcomponent of development, to the extent that Mercer (2004, 49) refers to the ‘ICTfetishism’ of international donors. However, over time, the possibility of a potentialdown-side to ICTs has gained stronger recognition. Thus, Cline-Cole and Powell (2004)argue that relatively little sustained attention has been paid to ICTs’ potentially highly dif-ferentiated impacts on social relations, Ya’u (2004) emphasizes the potential for capital

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flight (e.g. profit repatriation by Western ICT businesses, direct transfers for purchase ofICT equipment), while Thompson (2004) focuses on the operation of power withinICT, as communities are integrated into wider, uneven global networks increasinglymediated by ICT. In this vein, while IDRC’s ICT4D Research and Capacity Develop-ment Programme for 2007–2011 sets out to ‘empower the poor in Africa and Asia toaddress their key development challenges through effective use of ICT’, concerns aboutpotential negative impacts on poor people are clearly highlighted.3

ICTs encompass a broad range of technologies, each with their own characteristics andrange of potential impacts. In this paper the focus is on mobile phones and verbal andtext messaging communication through them. Only 9.6% of Africa’s population has inter-net access: high speed, high capacity internet access across the continent is currently stillvery poor, though the picture is changing rapidly since companies are now launchingcheaper broadband (associated with recent investments in undersea cables) which willallow faster internet services through mobile phones (Rao 2011). Following a review ofthe diffusion of mobile phones across Africa and their uptake by the poor, discussionfocuses principally on livelihoods. Attention is paid to linkages between virtual and physi-cal mobility throughout the paper and the final section reflects specifically on possibleinteractions between expanded virtual mobility and sustainable transportation, an issue ofconsiderable significance for our increasingly carbon-constrained world.

2. The Diffusion and Use of Mobile Phones among Africa’s Poor

Prior to the development of mobile phone technology, access and usage of land linesacross Africa was restricted by poverty, inadequate infrastructure and widespread corrup-tion in the sector, often seemingly encouraged by unholy alliances of corrupt politicians,state bureaucrats and staff of established commercial providers (as described by Adeoti andAdeoti 2008; Obadare 2006; Smith 2006 in Nigeria, where corruption was probably par-ticularly rife). Because they were considered strategically important, services were initiallystate-run, though privatisation of the telecommunication sectors began in many countriesin the 1980s and 1990s, as externally-imposed structural adjustment programmes requiredliberalisation and reduced state involvement (Shanmugavelan and Warnock 2004, 3).

Despite widespread liberalization, in most locations phone connectivity and postal ser-vices were so poor that the majority of the population was entirely dependent on face-to-face interaction for the conduct of daily business, because public telephones wereremarkably rare (Panos 2004; Shanmugavelan and Warnock 2004 citing ITU Telecom-munications Indicators Database 2001). The communication infrastructure was character-ised by a focus on external, not internal, communication such that it was usually easier tomake a call to Europe than to a town in the same country (or even another district inthe same city) (Shanmugavelan and Warnock 2004, 7).

The hitherto unmet demand for better communication within Africa was evident inthe amazing speed and scale at which the mobile phone ‘revolution’ occurred, followingthe first mobile call in 1987 (Vodafone 2005). Mobile subscriptions first overtook fixed-line connections in Africa in 2001 (Castells et al. 2007, 23). By 2005, mobiles accountedfor at least three-quarters of all telephones in 19 African countries (Castells et al. 2007,23). A more recent survey suggests the figure for Africa as a whole is now about 90%(ITU 2009). Certainly, in many remoter rural areas of Africa, mobile phone networkcoverage remains very poor (an issue foregrounded in Panos 2004). As Buys et al. (2009)observe, network coverage is affected by cell phone tower location, related to population,elevation, slope, distance to the nearest main road and nearest large city, resulting in

242 Mobile Phones, Livelihoods and Africa’s Poor

ª 2012 The Author Geography Compass 6/5 (2012): 241–259, 10.1111/j.1749-8198.2012.00484.xGeography Compass ª 2012 Blackwell Publishing Ltd

‘coverage exclusion for low density rural populations that are off-road and uphill.’4 Thereare also limitations because of the lack of mains electricity to charge phones5 in remoterural sites. Even here, however, the situation continues to change rapidly.

Subscriber growth in Africa is reportedly the fastest in the world at over 50% p.a.(Singh 2009). The average adoption rate for Africa as a whole is over 33% (Etzo andCollender 2010 citing UNCTAD 2009). UNCTAD (2010) figures for mobile cellularsubscriptions per 100 population range from 2.78 for Eritrea to 109.56 for the Seychelles.The level of mobile phone uptake – unforeseen even by leading investors at the outset –has been all the more remarkable in that it has been an essentially spontaneousdevelopment, firmly embedded, at all levels, in private sector enterprise: large telecom-munications companies provide the basic technology and gain substantially from theirinvestments, but are backed up by an already huge and burgeoning local informal sectorwhich benefits to some degree from selling airtime, ringtones, phones and phone coversand renting out, repairing and charging phones (Etzo and Collender 2010; Pfaff 2010).Fierce price wars between operators in the mobile phone sector (following widespreadmarket liberalization) have been very positive for the poor in terms of incentives (prepaidairtime in low denominations, free off-peak minutes, free ‘please call me’ SMS, etc.). Pre-payment schemes are particularly attractive to operators because they reduce credit riskand the cost of revenue collection (Minges et al. 2010): the majority of people operatepre-paid accounts (Donner 2008). It would thus be naıve to underestimate the benefitsthat the mobile phone boom has brought to international capital, not only as networkproviders but also from other elements such as manufacture of handsets.

Value-added services such as mobile banking are also growing dramatically, thoughthey are still very variable over space. Again, while delivering substantial benefit to sub-scribers, reportedly even among the poor (if not the very poor), they also bring largeprofits to private providers. This is well illustrated by reference to results at Safaricom(part of the Vodafone group), Kenya’s largest company by market value (The Standard,Nairobi, 11 November 2010, Nairobi). In the half-year to 30 September 2010, the com-pany reported pre-tax profits up 14%, despite global economic recession; an expansionattributed principally to surging use of text messages and mobile banking services. M-PESA, Safaricom’s mobile money-transfer service experienced such ‘phenomenal growth’that there were, at this point, 13.5 million users. In total, the company had a marketshare of 76.7%, i.e. 16.7 million customers. However, Kenya is among Africa’s early andprincipal mobile phone adopters to date6.

Country-level adoption and usage rates, anecdotal evidence and observation suggestthat mobile phone use is rapidly becoming an everyday part of life, even in poor house-holds, in many African countries, though detailed data on usage, especially qualitative andethnographic studies, remain relatively sparse (Duncombe and Boateng 2009, citing Jamesand Versteeg 2007; Minges et al. 2010; Pfaff 2010). Such ethnographic studies offer valu-able insights regarding the complexities of phone possession, use and associated transfor-mations (see De Bruijn et al. 2009, 2010).

A recent analysis of data from qualitative research and a survey of young people agedc. 9–18 years (a group which tends to lack access to resources), in Ghana, Malawi andSouth Africa, indicates the remarkably high level of phone usage already achieved in thisgroup (Table 1) and reinforces earlier observations on uptake among African youth byCastells et al. (2007, 138–139); see also Napolitano 2010). This study was focused princi-pally on examining young people’s daily physical mobility and mobility constraints, butpilot field observations suggested the need to consider phone usage and its implicationsfor physical mobility (Porter et al. 2012). Consequently, relevant questions were included

Mobile Phones, Livelihoods and Africa’s Poor 243


in in-depth interviews and group discussions with young people, their parents andteachers, and in a subsequent questionnaire survey (c. 1000 young people per country).The research was conducted in urban, peri-urban, rural and remote rural sites in twoagro-ecological zones per country (24 sites in total). The three countries were selectedbecause of pre-existing research networks in place, but also offered suitably diverse agro-ecological and socio-economic conditions for comparison. Malawi is one of Africa’spoorest countries, ranking 147th in the World Bank world GDP table for 2010, whileGhana now lies 86th (just behind Kenya, and newly classified as lower middle income)and South Africa 28th (though this latter rank disguises enormous within-country incomedisparities7).

Table 1 shows how, in South Africa, young people’s phone usage is substantial, evenin remote rural areas. The vast majority of phones used were mobile phones (only 1.1%of young people surveyed in Ghana reported dependence on land-lines; 4.6% in Malawiand 2.3% in South Africa). Usage does not imply ownership, of course: most of thesecalls are made from mobile phones belonging to family members, friends or at commer-cial phone points: the mobile phone is less a personal instrument and more a communalinstrument in many African contexts (see Tall 2004, 32).

Further analysis of data from this survey of young people offers interesting perspectiveson usage by age and gender. Usage increases with age, as might be expected, while theoverall gender pattern suggests that where phone usage is low and the technology new,male usage predominates (as in all Malawi survey sites and rural Ghana), but as phoneusage grows, girls’ usage starts to predominate (as in urban Ghana sites and all SouthAfrica sites). The authors suggest that this pattern, which accords with established under-standing of gendered technology uptake (whereby males commonly capture new technol-ogy), may be supported by other factors too, such as low network coverage in remoterlow population density (low use) areas, since the combination of girls’ relative time pov-erty and restrictions on their independent mobility may limit their opportunities to usephones, particularly if network access is only available when a journey is made to aremote site some distance from home. As availability of phones and network coverageincreases, female phone use may thus expand considerably. In high-use areas, betterreception will enable women and girls to fit phone use more easily into their busy work-ing days (so commonly tied to the domestic sphere), since they do not have to walk toremote areas to obtain a signal. It is hypothesized that female roles in the maintenance ofdistant family networks through phone contact will become more dominant as the mobilephone becomes a routine tool. In South Africa, the highest-use country, girls’ personalownership of mobile phones was found to be substantially higher than boys’ overall: thedifference between girls’ ownership of phones (23.7%) and boys’ ownership (17.3%) wasstatistically significant8.

Table 1. 2007–2008 Young people’s usage15 of phones in week prior to survey in Ghana,Malawi and South Africa (n = 2905; from Porter et al. 2012).

Settlement type Remote rural Rural with services Peri-urban Urban

Malawi 0.4% 2.8% 13.1% 21.6%Ghana 3.0% 1.6% 23.8% 35.9%South Africa 43.0% 56.4% 66.8% 67.5%

Phone usage · country P (vhi-square) £ 0.005. Phone usage · settlement type P (chi-square) £ 0.005.



Detailed gender-disaggregated data remain sparse, but other recent research fromUganda (Burrell 2010) suggests that rural women tend to be disproportionately excludedfrom mobile phone (and other ICT) access9. Many rural women in Uganda have to usetheir husband’s phone and, in some cases, when a wife wants to make a call, the husbandinsists on taking charge, so that the wife has no knowledge of phone operation. Burrellemphasizes the need to maintain public phone services, to allow women some autonomyin their communications so they are not limited to informal exchange relations withmen10. In urban contexts, similar problems of women’s phone use being restricted by sus-picious male partners are reported (Abraham 2009 re Zambia).

Many poor people, including children and youth, are already adept at maximizing theirphone usage. SMS messages, for instance, offer an excellent way to keep in touch whenfunds for airtime are limited (for those who are literate). In Ghana in 2009, 85% ofmobile phone users used SMS messages (Audience Scapes cited by UNCTAD 2010).The comment from a 13-year-old boy who lives with his grandmother and mother in arural settlement in North West Province, South Africa, is reflective of a widespread strat-egy: ‘I use it [the cell phone] … to send a ‘Please call me’ [free SMS] to people whohave airtime. My mother calls me … to tell me what I should do before she arriveshome, like cleaning’ (Porter et al. 2012).

Another widespread practice is to make contact with family and friends by calling theperson, letting the phone ring once or twice, then disconnecting. This is known as ‘flash-ing’ or ‘beeping’ (and other local terms): it enables people to remind friends, family andacquaintances of their presence, stay close to them, perhaps track travel progress, or tosay ‘phone me back, I’ve no units’, as Slater and Kwami (2005) and Smith (2006)describe in Ghanaian and Nigerian contexts respectively. Slater and Kwami emphasisethat flashing is a way of maintaining relationships at low cost: it reminds distant call recip-ients of ties and obligations, with minimal effort (see also Donner 2006, 2007; Nyamnjoh2009). Among illiterate people unable to read SMS messages it is a particularly valuablefacility. In Mali it has been likened to ‘tapping someone’s shoulder or winking at them’(Pelckmans 2009, 29).

Beeping is often employed by young ⁄ poorer people as a way of connecting to older ⁄richer people; thus, rural dwellers beep family who have moved to the city (and areassumed to be in possession of more resources). In rural Malawi, for instance, a secondaryschool boy borrowed a cell phone to call his former primary school teacher ‘to find outhow he was faring… I just beeped and I was called [back]’: the return call from the morepowerful ⁄wealthy call recipient is clearly expected protocol (Porter et al. 2012; see alsoPelckmans’ 2009, 29 on how flashing can influence and (re)produce power relationshipsin Mali). Apart from ‘flashing’, in many poor rural households mobile phones seem to beused principally to receive calls, unless family members send airtime.

Phone use in poor communities is focused principally on maintaining social contacts,especially with kin (as in Donner’s 2006 study of phones in Kigali micro-enterprise). Tothis purpose, better-resourced urban families may provide their rural kin with phones:gifting of an older model to a young rural-based sibling, for instance, is quite common(Porter et al. 2012; Brinkman et al. 2009, 83, 88 re Khartoum; Pfaff 2009, 141–142 reZanzibar). Slater and Kwami (2005, 12) suggest that among many urban families inGhana, phone use offers a way of discharging obligations to rural kin, without having tomake a long, difficult and costly journey to remote rural areas: a ‘balancing of acknowl-edgement and avoidance ⁄evasion as well as – perhaps – a ‘‘modern’’ balancing actbetween ‘‘my’’ life and my family’. The same appears to be true in South Africa, wheremobile phone ownership has expanded at a phenomenal rate into even quite remote rural



areas (as indicated in Table 1). Here many children are resident with grandparents whiletheir parents work in distant cities: mobile phones are now a vital communication toolfor these so-called ‘stretched’ households. Phone acquisition is very commonly enabledby urban-based family: ‘their mother bought a cell phone that I keep so that they can talkto her whenever they want to … their mother sends them airtime. The phone is veryimportant because it brings them closer to their mother’. [Grandmother caring for threechildren, remote rural North West Province (Porter et al. 2012)] Such phone contactoften covers a range of issues beyond the explicitly ‘social’, including remittances, trade,education and health (Skuse and Cousins 2005; Slater and Kwami 2005). There is often astrong intermingling of personal and business phone use, along the ‘often- blurred linesbetween personal and economic relationships’, both within and between households(Donner 2008, 148). ‘Mobiles blur the lines between livelihoods and lives…. Around theworld, [people] … are carrying handsets and using them for both productive and personaluses throughout their daily routines. … It can also be difficult to differentiate an eco-nomic call from a social one’ (Donner 2009, 91–92). As Skuse and Cousins (2005, 8)note, phones forge and maintain both economic and emotional ties. Funds derived from(phone) interaction in social networks straddling the rural-urban divide clearly make acrucial contribution to income in many low-income families. In this respect, phone usageseems to closely parallel conditions in other low-income regions: in Jamaica Horst andMiller (2006, 164–165) show that phones can be more about getting than making money.

While connections to rural kin are important for many urban families, the mobilephone has other significance within the city. For young people, in particular, the mobilephone is an object of desire and ownership a symbol of success, to the degree that theftof phones and theft to maintain phones is widely reported in urban areas Occasionally,this involves violence, particularly in South African cities where mobile phone muggingsare now common (Pfaff 2010; Porter et al. 2012).

3. Mobile Phones, Networks and Livelihoods: The Generation of Economic Growth Capital

Although the research literature on mobile phones in developing countries has grown,studies of their livelihood impact (in terms of whether and how new livelihood configu-rations occur and whether and how the quality of existing ones will be affected) are rare(Manvell 2006). For Africa, one of the first relevant studies examined livelihood impactsin rural Mozambique and Tanzania (Souter et al. 2005). This work found little evidencethat mobile phones were positively influencing livelihoods, except for richer, more edu-cated sections of society: ‘The most substantial value of the telephone in terms of liveli-hoods is in its impact on overall vulnerability, particularly in emergencies [death, sicknessetc.] … because of its immediacy, interactivity and ability to secure assistance from afar’(Souter et al. 2005, 17).

Although detailed evidence regarding the impact of mobile phones on livelihoodsremains limited, it is clear that rapid growth of the mobile phone business across Africa isspawning change. UNCTAD’s October 2010 information economy report, focused onpoverty and livelihoods, comments: ‘The contribution of ICTs to poverty reduction liesin their power to enable poor women and men to build ‘‘livelihood assets’’ or moresecure employment opportunities … new technologies can make a difference, even inthe most remote places. The diffusion of some ICTs – especially mobile phones – hasimproved dramatically, including in regions where many of the world’s poor live andwork. This translates into new micro-enterprises in different sectors, new services andnew ways to market produce and other goods’. The report calls for much more attention



to research and policy analysis in the livelihoods field. This is urgently required since notall change in the phone ⁄ livelihoods nexus is necessarily positive. As poor women innorthern Nigeria observed, household well-being can be negatively impacted when hus-bands or other family members prefer to spend money buying phone top-up credits thangive such money for other household expenses (Comfort and Dada 2009): in many cash-strapped African households, payments associated with mobile phones by individual fam-ily members will add another stress to household budgeting, with pay-offs which maynot justify the outlay made.

Improvements associated with mobile phones are apparent across various aspects of live-lihoods (apart from those crucial income contributions which many poor people derivedirectly from their social networks). Firstly, there are the ‘direct informal employmentopportunities’: even in small villages, kiosks with one or two phones allow the operatorto run a ‘call centre’; other businesses sell airtime, ringtones and phone covers and rentout, repair and charge phones (Etzo and Collender 2010). Young people are particularlyprominent as hawkers of airtime and phone accessories, probably (in the absence of alter-natives) because this requires little entry capital or formal skill. Many urban boys are setup in business through a family member to do this work (Porter et al. 2012):

Some time ago [my uncle] gave me one of his mobile phones to do ‘space to space’ [commercial].[out-of-school boy, 15 years, urban Ghana]

This returns us to the issue of gifting, a common phenomenon in Africa, but in the casewhere the phone is specifically gifted to provide an income for the new owner, Burrell(2010)11 suggests that the phone can be viewed as a measure for handling unpredictabil-ity, an informal form of insurance.

In Buea, Cameroon, Nkwi (2009, 58–) describes how young school drop-outs areemployed in the city’s phone boxes: they present their work as a temporary measure toenable them to garner sufficient funds to resume their education. Paid workers mostlyearn a ‘decent salary’ – i.e. at least the national minimum wage. One of the most positivejob creation stories to date comes from the Gambia, where a mobile telecoms operatorhas given disabled street beggars part-time work selling SIM cards: the beggars reportedlyearn more than a dollar per day commission and can afford their own phones (Ahonen2009, cited in UNCTAD 2010). However, over time, competition in the mobile marketand the move from shared to individual mobile phone ownership, may make for less via-ble enterprises, especially in rural areas (Sey 2008 re Ghana; Burrell 2008 re Uganda).Moreover, financial success in some cases causes intra-household tensions. BantebyaKyomuhendo (2009), in a study of women running mobile payphone businesses inUganda suggests that, although these businesses provided women and their families withimproved incomes and the women themselves with new opportunities, few womenachieved any appreciable improvement in personal empowerment. Husbands were oftenunhappy with their wives’ long absences from home required by business operations and‘‘the dominant thinking among all the women is that social status is derived from mar-riage and how stable that marriage is’’ (Bantebya Kyomuhendo 2009, 68).

Mobile phones can also play an important role in job search, acting as a conduit forlearning about new employment opportunities and contacting potential employers,thereby reducing search costs. In a South Africa phone use survey, 16% of respondentsvolunteered this as an impact and 24% of owners or users said they had made or receiveda call about an employment, business or training opportunity (Samuel et al. 2005). Otherresearch on rural labour market outcomes in South Africa by Klonner and Nolen (2008)(analyzing spatially-coded Vodacom data and annual labour force surveys) found the



introduction of mobile phone coverage was associated with a 15% increase in employ-ment and pro-poor impacts, due mostly to increased employment of women and a signif-icant associated shift away from agriculture. In Uganda, mobile phone network expansionreportedly ‘increases the chance of (rural dwellers) choosing migration to find a job’,especially among people belonging to one of Kampala’s main ethnic groups (Muto 2009).Personal networks are commonly used to obtain information about potential workopportunities and the rapidity of communication now possible means that informationabout potential employment opportunities in the capital is phoned through to rural kinfor immediate action.

Mobile phones also appear to be having a substantial impact in facilitating micro-enterprise(though this is probably still far more a feature of urban than rural locations). A survey inKigali, Rwanda, suggested that mobiles may be allowing micro-entrepreneurs in variousbusinesses to develop new business contacts (Donner 2006), while Jiyane and Mostaert(2010) observed how women vendors in South Africa use mobile phones to make andreceive calls to business partners, product suppliers, retail stores and distributors. In amicro-enterprise context, mobile phones can be particularly critical to profit marginsbecause they lower transaction costs through reducing the need to travel. Transactioncosts arise because of the real resource and time costs involved in striking bargainsbetween buyers and sellers (James 2002, 12): lack of available information is extremelycostly. Phone use may also bring other benefits in this context, ‘around the strengtheningof social and human capital assets (enhancement of skills, increased self-confidence, partic-ipation of women, empowerment, and security against income loss)’ (UNCTAD 2010).

However, a number of studies indicate that such benefits are by no means assured. Insouthern Nigeria, Jagun et al. (2008) examine the impact of mobile phones in the micro-enterprise supply chains of aso oke hand-loom weavers. They show how producers’ use ofphones saves them time and money by substituting for journeys associated with a widerange of value chain operations, but conclude that mobiles show more signs of being atechnology of inequality than of leveling the playing field in this industry: ‘…. Themost-resourced have gained through mobiles in terms of more orders, larger orders, fasterturnaround, and better quality of final product, leading to more customer satisfaction.The least resourced [without access to a mobile] are losing orders’ (Jagun et al. 2008, 62).The potential for loss among the least resourced following the introduction of mobilephones is also observed in Zambia, such that a ‘‘virtual mobile divide’’ is reported forpoor women entrepreneurs that utilized mobile networking in women’s advocacy groups(Abraham 2009): ‘‘Over a period of time, low-income-earning women who are part ofthe women’s empowerment mobile-phone-sustained virtual network begin to lose their‘voice’. They become silent listeners and simply recipients of texts and alerts from morefinancially empowered members … the mobile phone virtual network’s ‘lower classes’ ’’(Abraham 2009, 97).

MOBILE PHONES AND LONG-DISTANCE TRADE NETWORKS

A rapidly expanding literature suggests that mobile phone uptake is now generating eco-nomic growth and offers positive potential developmental impacts in the context of long-distance trade networks (e.g. Chikazunga et al. 2008; Mahmoud 2008; Overa 2006,2008), The benefits that mobile phones bring, in the reduction in information search andtransactions costs and improved two-way communications within supply chains betweentraders and key customers or suppliers, are extremely important, given the difficultiesand dangers of African travel (UNCTAD 2010). Overa (2006) provides an early study



recognising the potential value of mobile phones in informal, long-distance trading con-texts characterized by high risk, low trust and consequent heavy reliance on personal net-works. Traders in Ghana who wish to transport goods from producers to consumers needto cooperate, coordinate and exchange information; prior to the expansion of the mobilephone network this required face-to-face communication or messages sent through inter-mediaries. Poor roads and costly, often unreliable, transportation hampered such move-ments and raised transaction costs substantially. Overa concludes that the introduction ofmobile phones has led to more efficient information exchange and networking amongthose spatially dispersed (and often illiterate) traders who can afford mobile phones.Phones do not remove the need for all face-to-face interactions, but often allow savingson fuel, bus fares, remuneration of intermediaries and their own time: they also enablecommunication on the road, when warning of delay or a call for help in the event of acci-dent, vehicle breakdown, robbery, harassment by rent-seeking officialdom etc. She citesthe case of a yam wholesaler who, by receiving information by phone from her tradingpartners, can now ‘calculate demand, supply, and prices more accurately, which reducesthe risk of losing money and improves her profit potential’ (Overa 2006, 1308–1309).

Overa also draws attention to the potential of phones for initiating new relations withdistantly located customers, citing the case of a young onion wholesaler-retailer. Owner-ship and use of a mobile phone is observed by this dealer to be a symbol of trade success,facilitating the construction of reputation: giving one’s phone number to customers isperceived as an indication of trustworthiness, while obtaining a customer’s number meansit is easier to chase debts. Consequently, he has saved himself ‘several years of gradualreputation building’ and is now ‘one of the most trustworthy onion wholesalers’ in hisAccra market, despite his youth (Overa 2006, 1310).

In the case of the lucrative wholesale fish trade, Overa shows how money transactionsbetween traders and cold storage companies were being facilitated by mobile phone incoastal Ghana, in this case enabling money transfers through the formal banking system:an early money transfer example. Frozen fish is purchased from import ⁄ cold storage com-panies by women wholesalers for whom the mobile phone provides invaluable access toinformation on prices, fish types, quality and delivery times. Most cold storage companiesnow reportedly only accept bank cheques and have introduced a system of payment thatrequires communication by phone with the bank (by both trader and company) to stopembezzlement: this procedure obviates the risk of wholesalers disappearing with fishwithout paying and traders being robbed on the road.

More recently, other studies have expanded our knowledge of the benefits of mobilephone use in long-distance trade. Mobile phones have reportedly improved transactionsin the Kenyan livestock trade, because traders in the north can contact their Nairobicounterparts, friends or kinsmen about market conditions and alert them when animalshave been dispatched by truck (Mahmoud 2008). A quantitative study of grain markets inNiger (Aker 2008) found transaction costs lowered due to a reduction in informationsearch costs. In the case of the perishable produce trade, the advantages of rapid commu-nication are particularly evident. In the South African tomato trade, ownership of amobile phone is a significant factor improving price management (Chikazunga et al.2008), while in Uganda, mobile phone coverage is associated with a 10% increase infarmers’ probability of market participation for (perishable) bananas, but not (less perish-able) maize (Muto and Yamano 2009). Ferris et al. (2008) find rural and travelling tradersin Uganda increasingly accessing market information through mobile phone SMS. Theysuggest this should be promoted among traders, while further training through extensionservices could also make it a more effective tool for farmers. Numerous cases of mobile



phones being used by farmers to access (regularly up-dated) Market Information Systems(MIS) using WAP-enable mobile phones or SMS technology are now reported (e.g.Molony 2008a).

Clearly, it would be dangerous to overstate the positive improvements which mobilephone use can make in a trade context: for instance, Molony (2008a) observed thataccessing a Market Information System and buying outside established customer relation-ships can jeopardize farmers’ access to credit (which is commonly obtained through thedealer to whom they sell regularly), unless an alternative credit source is available12. InTanzania he suggests that potato and tomato farmer benefits associated with mobile phoneaccess may be limited (principally to supply and demand information), because they areoften still tied to traders for credit supply. Mobile phone communication does not signifi-cantly alter the trust relationship between these small farmers and their wholesale buyers:face-to-face interaction is often important at the inception of business relations, evenwhen trusted neighbours have vouched for the middleman’s reliability, but it will cer-tainly be required by the farmer at a later stage when he wishes to obtain credit from hisbuyer (see also Molony 2007, 2008b, 2009a,b; Porter et al. 2007). Personalised relation-ships, cemented by face-to-face contact, remain an important element of local, nationaland even inter-regional trade here, as elsewhere across Africa (see also Jagun et al. 2008;Souter et al. 2005). As Overa (2006, 1313) points out, communication by mobile phoneis not a trust-building mechanism in itself, but rather ‘a tool to make already existingtrust-building mechanisms – exchange of information, observation of behavior and sanc-tions against dishonest action, and contract fulfillment – more efficient’. Aker and Mbiti(2010) caution that, while mobile phones can strengthen people’s business networksthrough increased communication and may enable them to extend their networks intonew markets, they have the potential to weaken local networks if individuals move toaccess credit and services from new sources.

Nonetheless in certain areas, particularly remittance oversight, use of mobile phones isalready impressive, in connection with both intra- and international transfers. In Ghana,for instance, mobile phones facilitate Liberian refugees’ collection of remittances fromfamily and friends overseas (via Western Union, a global money transfer company). Suchremittances play a crucial role in support of many refugee families at the Buduburam ref-ugee camp, though they are also a regular source of envy and dispute among fellow refu-gees and, where used to buy consumption goods (especially expensive mobile phones), asource of host population envy (Porter et al. 2008). Even very small amounts of moneyare increasingly transferred by phone to friends and relations. In northern Nigeria,women send pocket and travel money to their children at (secondary) school in distantlocations by buying airtime and sending a code that can be redeemed for cash at a road-side phone kiosk (Comfort and Dada 2009).

As the 2010 UNCTAD report observes, mobile money ⁄banking services are of partic-ular importance for entrepreneurs that are operating in locations with limited bankingservices (as in much of Africa). Moreover, they have been found to be far cheaper thanboth formal banks and informal options, especially for low-value transactions. M-banking,such as Safaricom’s M-PESA and Orange’s iko pesa in Kenya, and WIZZIT in SouthAfrica, is now developing rapidly, especially where national regulatory regimes are flexi-ble (Duncombe and Boateng 2009; Bankable Frontier Associates and Wishart 2006). Theexpansion of M-PESA (literally, Mobile-Cash), has been particularly remarkable. The ini-tial support of the Kenyan government and Kenya’s Central Bank (i.e. expressed commit-ment to instituting legal and regulatory changes to support new technology-basedproducts and services and enable increased outreach) was a significant benefit (http://



www.cgap.org/gm/document-1.9.2321/Kenya-Notes-On-Regulation-Branchless-Bank-ing-2007.pdf). Only launched in 2007 (with support from the UK’s Department forInternational Development), M-PESA now has more than 13.5 million users. It allowsindividuals to make cheap money transfers quickly and securely to another mobile phoneuser, without having a bank account, so long as they register with Safaricom for anM-PESA account (Hughes and Lonie 2007; see also Morawczynski and Miscione 2008).By April 2010, there were 18,000 M-PESA agents in Kenya, some of whom earned con-siderable incomes from their work, especially in urban areas (Eijkman et al. 2010).

A useful review of research papers on mobile phones as a delivery mechanism forfinancial services for the poor in developing countries by Duncombe and Boateng (2009)indicated a shortage of in-depth qualitative case studies but notes some key features,including the fact that most (if not all) m-finance initiatives are at least in part commer-cially driven. This is likely to have implications regarding their spread to the poorest Afri-can countries and populations. Duncombe and Boateng suggest that, in the absence of astrong evidence base, the potential of m-finance applications for poor users may havebeen overstated by the ‘mobile industry donor nexus’ (p.1253). They draw on studieswhich show that the overall pace of m-finance adoption was relatively low at least to startwith: for instance, a South African urban study where Brown et al. (2003) found 91% of162 respondents owned a mobile phone, but only 6% had used mobile banking. Users, asin the case of the South African WIZZIT (which utilizes an innovative agent-based ser-vice), are found to be low income with some education, not the poorest (citing Ivaturyand Pickens 2006). The development of non-text designs for promoting m-bankingamong non-literate and semi-literate populations (supported by research in India, seeMedhi et al. 2009) may improve this picture.

Donner (2009, 97) observes that among the unbanked, ‘early research suggests thatmost transactions are between family members – domestic remittances rather than com-mercial transactions’. However, this does not entirely remove the potential for positivelivelihoods impacts among the poor, as one detailed ethnographic study of M-PESA usein Kenya (where M-PESA is now well established) illustrates (Morawczynski 2009).Many urbanites in the informal Nairobi settlement of Kibera now send money home reg-ularly to their rural relatives through M-PESA, rather than through family and friends orby bus, matatu or the post office, as previously, because it is speedy, secure and relativelylow-cost. M-PESA was observed to have reduced vulnerability among users both in ruraland – perhaps more surprisingly – urban areas. In Kenya’s 2007 ⁄8 post-election crisis per-iod, mobile phone credit went from rural to urban areas as urban migrants looked to thevillage for support to buy food and water. Moreover, some women in Kibera use M-PESA to store savings, as they are then less likely to be found and stolen by husbands.However, the constant demands of rural relatives have encouraged some urbanites toleave the system, while rural dwellers receive fewer visits from their urban relatives (whono longer have to travel home with money) and may become over-dependent on urbanremittances to the detriment of rural economic activity. Nonetheless, Samuel et al. (2005)report that in Tanzania and South Africa, although friends and relatives often nowphoned rather than visited, only a very small number of those interviewed in their sur-veys reported deterioration in these relationships.

4. Interactions Between Virtual and Physical Mobility in Africa

In the context of an increasingly carbon-constrained world and the search for moresustainable transportation, potential interactions between the expanded virtual mobility



facilitated by mobile phones and physical transport services are of great importance. InWestern contexts, where there has been considerable interest in examining the interactionsbetween expanded phone (and other ICT) use and trip-making behaviour, Kwan 2006suggests that, while travel patterns may to some extent be reconfigured in time and space,or at least ‘lubricated’ (Line et al. 2011, 9), there is likely to be no reduction in travel, andindeed there may even be an increase, because people need to spend less time at homeperforming activities or making arrangements that can now be conducted on the move(see also Hjorthol 2008; Line et al. 2011; Nobis and Lenz 2009). The potential for substi-tuting travel to work with tele-working from home (using a variety of ICTs) has beenseen as a means of reducing urban traffic congestion in Western contexts but appears unli-kely to live up to early predictions of travel reduction, not least because face-to-face inter-action remains so important in a business context (Line et al. 2011).

Face-to-face interaction is of even greater significance in Africa, where personalisedrelationships are crucial in business. However, when the value attached to personalizedrelationships is balanced against factors of widespread poverty and irregular, sometimesvery dangerous transport, the potential for some mobile substitution for travel may begreater than in Western contexts. Firm evidence is sparse, but when respondents wereasked about any perceived linkages between phone use and personal travel in the childmobility study (Porter et al. 2012), many of those questioned, particularly in rural loca-tions, suggested that mobile phones were already – or would in the future – reduce theirneed to undertake journeys. The cost differential between a phone call and travel wasobserved by many respondents, though there were also references to other benefits: savedtime, effort and avoidance of potential travel dangers. Better distance managementthrough phone use can be expected to be particularly closely associated with populationswith very low disposable incomes, and ⁄or whose physical mobility is limited (for instanceby disability or infirmity)13. Earlier research by Samuel et al. (2005) in South Africa andTanzania also suggests that phones are substituting for travel. They found particularly sub-stantial impact in Tanzania (related to its many poor roads and limited public transport),such that 91% of those surveyed (N = 223) said that the phone had impacted on thembecause they could call rather than travelling to family and friends (compared to 77% inSouth Africa, where N = 252). But even in South Africa, only 4 out of the 10 commu-nities surveyed had a regular bus service to the nearest town: the round-trip journey costabout R15, compared to a typical pre-paid voice call of R5. In Tanzania, 67% reckonedthat phone use had made a large saving in travel time and 65% a large saving in travelcost, while in South Africa 52% reporting large time savings and 58% large cost savings.

Similar transport savings have been observed among aso oke weavers using mobilephones in Nigeria. Journeys and face-to-face interactions have not disappeared entirely,but perceived savings are expressed in terms of comparing call costs with transport costs(i.e. not including the capital cost of the phone), such that a call rate of N50 ($0.40) perminute is cheaper than a taxi cost for an average journey of, say, N1000 ($8), since callsare normally completed in less than 5 minutes (Jagun et al., 2008; also cited in UNC-TAD 2010). In Niger, an average trip to a market 65 kilometers distant will involve agrain trader in a 2–4 hour round-trip, as compared to a 2-minute call. Based on a localdaily wage of 500 CFA francs ($1) per agricultural labourer, a mobile phone will reducesearch costs by 50 percent as compared with personal travel (Aker and Mbiti 2010). Inrural Kenya, M-PESA’s wide agent network and presence in rural areas is also reportedlyhelping to reduce travel (Morawczynski 2009). In some cases, respondents in this studyobserved that, prior to the advent of M-PESA, the travel cost to obtain their cash hadamounted to nearly one third of the total sum remitted.



The literature cited above concerning the use of mobile phones in trading and moneytransfer contexts suggests that travel is made more efficient – phones were observed to cuttravel costs and time, reducing the number of long, potentially hazardous road journeyson poor roads in badly maintained vehicles, in regions with among the world’s highestaccident rates and where highway robbery and other types of harassment associated withtravel are widespread. Moreover, from observation and anecdotal evidence, mobilephones are also starting to help improve transport service operations in some locations.Samuel et al. (2005) cite the example of taxi drivers in Tanzania, who used their mobilesto request additional taxis when there were many people waiting for transport, thusreducing customers’ waiting time and increasing their own income. The potential fordeveloping more efficient transport systems through integration of transport with mobilephone communication in Africa is substantial.

5. Conclusion

Meyrowitz’s 1985 observation that telephones burst into places, sundering their bounds(cited in Hillis 1998), is extremely apposite in a sub-Saharan context, where mobilephones have already demonstrated their potential to improve access even in quite remotelocations: a major developmental innovation whose impacts on livelihoods (positive andnegative) are still emerging and evolving. The picture continues to change rapidly, so thatliterature on mobile phones in Africa only a few years old is already out of date – hencethe principal focus on recent material in this review. As Aker and Mbiti (2010, 3)observe, mobile phones in Africa are evolving from simple communication tools into ser-vice delivery platforms: ‘This has shifted the development paradigm surrounding mobilephones from one that simply reduces communication and coordination costs to one thatcould transform lives through innovative applications and services’. However, as thematerial presented here emphasizes, it would be unwise to envisage mobile phone tech-nology as a ‘‘silver bullet’’ for African development (Aker and Mbiti 2010, 1).

While phone users have benefitted from operator competition, and we see even verypoor young children now regularly accessing phones (in some cases to their substantialperceived benefit), the long-term impacts of mobile phone use on livelihoods, patterns ofeconomic inequality and broader well-being across Africa remain uncertain. Usage andpotential impact patterns of mobile phones are often difficult to interpret and measurebecause of the way usage is extended by their operation as a communal (not personal)instrument, also because of the way that mobiles blur the lines between livelihoods andlives (Donner 2009). Nonetheless, there is substantial evidence that phones can enable thepoor to build livelihood assets and take up employment opportunities, not only throughdirect employment or job-search benefits, but also through the critical support they canbring to small businesses in terms of expanded profit margins. In both micro-enterpriseand more substantial trading businesses, especially those involving organizationally com-plex, geographically dispersed commodity chains, mobile phones often now play a criticalrole. Phones cannot build the personalized trust which is so essential in an African busi-ness context (where formal legal contracts cannot generally be enforced by the legalsystem) but, as Overa reflects, they can make already existing trust-building mechanisms– exchange of information; observation of behavior and sanctions against dishonest action;contract fulfillment – more efficient. M-finance further supports the micro-enterprise andtrading environment, albeit still used principally for family remittance transfers. In oil-deficit countries the use of phones to reduce travel demand and maximize the efficiencyof the transport system is likely to grow substantially as fuel prices increase.



However, there is also a growing evidence base regarding the down-side of mobilephones in Africa. At the local level, the least-resourced micro-entrepreneurs will loseout, particularly if they cannot afford a phone: income inequalities can consequently beexpected to expand, not decline. Detailed gender-disaggregated data on phone use arestill sparse, but the evidence available suggests that for many women, phone access islimited by male control (often shaped by suspicions of women’s usage); this will impacton their potential to use the phone for employment, job search and diverse entrepre-neurial ventures. The mobile phone is also a lure used by men to obtain sexualfavours. Where women do have access to phones, they can present a valuable incomesource, but women’s business success may also create significant intra-family gendertensions. A related issue – only touched on in this paper – is the potential of mobilephones to disrupt livelihoods, not only through violence sometimes associated withfamily discord or phone theft, but also more broadly through the role of mobilephones in highway robbery and conflict perpetration (for instance organizationof attacks in the Kenyan post-election violence as observed by Shrum et al. 2011)14.Finally, the dominant role played by Western ICT business, which draws states andcommunities ever further into existing highly uneven global networks of power(increasingly mediated by ICT), forms a back-drop to this debate which cannot beignored: the consequences of deepening engagement in these networks may not yet befully apparent.

To conclude, the mobile phone has brought new opportunities in a livelihood context,but also new hazards and new forms of appropriation, at diverse scales from the local tothe global. This mirrors earlier experiences of technology transfer to Africa from Westerncontexts, where impacts in recipient societies have been varied and complex, often trans-forming detailed tasks and activities in the everyday, but without changing fundamentalasymmetries and inequalities (including those associated with gender relations). The latestinnovation wave currently working its way across the continent – high speed, highcapacity internet access through mobile phones – will bring a new set of opportunitiesand challenges. UNCTAD’s (2010) call for much more attention to research and policyanalysis regarding mobile phone use in the livelihoods field is clearly apposite and suchwork urgently needed as this new phase of innovation takes hold.

Short Biography

Gina Porter is senior research fellow in the Department of Anthropology, Durham Uni-versity. She has worked on diverse aspects of African development, mainly in West andsouthern Africa. Her interest in mobile phones in Africa stems from a broader, long-standing interest in mobility and transport issues.

Notes

* Correspondence address: Gina Porter, Durham University, Durham DHL 3HE, UK. E-mail: [email protected] [Online]. Retrieved on 13 July 2011 from: http://www.africantelecomsnews.com/Africa_Subscriber_Data.html.2 There is insufficient space to consider the growing literature on mobile phone usage and impact in areas likehealth and education services and in conflict management, which have massive potential implications for the livesand livelihoods of diverse social categories.3 Project URL: http://www.idrc.ca/EN/Programs/Information_and_Communication_Technologies_for_Develop-ment/Pages/default.aspx.4 During field work in remote rural locations in Ghana and Malawi, the few people with mobile phones wereoften observed walking to particular points (often a hilltop) where they could obtain a signal.



5 Solar and wind up phone chargers are not yet widespread so rural mobile phone owners resort to charging theirphones (for a fee) intermittently at [sometimes distant] settlements which have electricity supply (see Samuel et al.2005 re Tanzania).6 Mobile banking has been slower to take off elsewhere. In Tanzania, for instance (where Vodacom launched M-PESA in 2008), progress has been much slower, a fact attributed to important differences in Tanzania’s demograph-ics, its mobile phone market structure (and a poor preliminary marketing strategy; Rotman 2009).7 World Development Indicators database, World Bank, 1 July 2011. [Online]. 22 July 2011 from: http://sitere-sources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf8 Which raises some important questions around how girls obtain phone ownership (Porter et al. 2010)9 An early study of gender impacts of mobile and fixed line phone use among the poor in Ghana, Uganda andBotswana (Scott et al. 2004) shows less evidence of clear gender distinctions in phone use, though women werefound to use services less than men in Uganda and to use less SMS than men in Botswana. The research was under-taken before mobile phones had taken off in Ghana.10 Burrell notes how public phones are threatened in Uganda by pricing schemes which now benefit individualconsumers but make the phone as a business investment less profitable.11 Albeit in the context of husbands gifting to wives in Uganda, rather than as a gift to youth. Burrell also consid-ers the phone as lure (a widespread concern in numerous contexts, but especially where sugar daddies seekingcross-generational relationships with young girls are concerned: see Porter et al. 2012.)12 Price setting, in any case, is a complex business in which customer relations can play a significant role andchanges can occur extremely rapidly even within one market day, depending on supply conditions and other factors(Porter et al. 2007).13 There are various other interesting age and gender perspectives on the relationship between mobile phone useand independent travel. In Western contexts, the role of mobile phones in increasing women’s personal travel safetyhas been observed (Katz and Aakhus 2002; Line et al. 2011), but there is little evidence regarding improvements towomen’s safety through access to a phone in Africa. Indeed, to the contrary (as observed above), in remote ruralareas, the need to walk to a remote location in order to access a phone network may put women and girls in dan-ger, while in urban areas girls who visibly carry and talk on their phones report danger of attack and theft.14 The growing role of mobile phones in the field of governance, conflict management and conflict survival isworthy of detailed examination in a separate review.15 Usage data were obtained from the following survey question: When was the last time that you used a phone? –In the last week ⁄ in the last month ⁄ more than a month ago?

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