Bottom up economic model is not a new invention. The million dollar question is how you choose to practise it. First things first – corruption will kill bottom-up economic model and any other model for that matter. When banks were busy closing branches in late 90s ostensibly to get rid of unprofitable banks in smaller towns, one bank was quietly taking their place and that bank was none other than Equity Bank Kenya. It’s simple law of science, no vacuum is left.
When mobile telephone companies were licensed in Kenya, Kencell (now Airtel) was quick off the starting block and mobile lines were going for Ksh200,000 and it became a status symbol. Bar waiters and barmen had to provide an extra glass for the phone owner to show the world that he, indeed, owned a mobile phone. This was real not some urban tales. We had true ninjas then.
When scratch cards were introduced it was in Ksh1,000 denomination because the poor Kenyan was not in the equation . How can mama mboga or a shoe shiner own a mobile phone? They were considered then too poor to own a mobile phone .
For banks, the NARC government decided they won’t compete with Wanjiku to borrow from banks and that happened as soon as Kibaki took office in 2003. Banks were now left with ordinary Kenyans and remember Dr James Mwangi had already positioned Equity in all the small towns where other bigger banks had fled because a client in muddy farm gumboots or some sweaty wakulima trader was not a cool customer.
On the mobile telephony side, Safaricom PLC was hived off that dinosaur KPTC hence their slow entry, but again how many recall that when we accuse Safaricom of being a dominant player. It’s natural to criticize when a firm does well but Safaricom worked hard to get where it is.
Safaricom invented M-Pesa and guess who worked hard 24/7 to stop them? Same banks who quit the so-called small towns but glad that then acting Finance Minister, John Michuki, and CBK Governor Prof. Njuguna Ndung’u waved play on.
Many banks had to struggle to try and get their old premises back and it was a common phenomenon to see banks setting up tents at bus stops pleading to the same small man they left high and dry to come back and reopen a bank account; on Sunday, Wanjiku had many suitors.
On the other hand, Safaricom decided to offer scratch card as low as Ksh100 then Ksh50 then Ksh20 then known as blue, Bamba 10 & 5 and, finally, Okoa Jahazi was born. Mr Michael Joseph and late Bob Collymore truly practised what it means trading with the folks at the bottom of the pyramid and by empowering them, that is nothing but bottom-up economy.
At government level bottom-up economy is already in place, what with Huduma centre? Where the masses can access most services on the digital platform and in addition to the centers the e-Citizen where from the comfort of home I can access most services. Renewing my driving licence without stepping out of my office is indeed amazing.
Even a more powerful indicator is about public funds. When you allocate Ksh140 million per MP per constituency per year, Ksh700 million in five years and Ksh1.4 billion in 10 years. Folks Ksh140 million that is a cool $1.3 million a year which is a lot of money. I have seen what my MP Mohammed Ali has been able to achieve in under three years or look at what Late Kibra MP delivered in his very short stint.
Each woman rep is also getting on average Ksh7 million per constituency so in a county like Nairobi the women rep gets more than an MP who runs CDF while some Governors handle Ksh11 billion-plus a year and then, of course, the national government.
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CK Prahald in his book “The fortune at the bottom of the pyramid” delves deep on how you can trade with the citizens at the bottom of the pyramid and in the process eradicate poverty and even make profits.
Safaricom has not been made successful by post-paid subscribers but by prepaid subscribers. Last stats were that 85% of their subscribers were indeed pre-paid so when Bob Collymore was spending more time in the slums and working with artists he knew what he was doing and in the process empowering the man and woman at the bottom of the pyramid.
When Safaricom decided to pick the lady lamenting about the floods in western Kenya in one of their ads they knew she was the face of the bottom of the pyramid who in turn help push the economy from the bottom. They stood with her not through handout but turning her into one of their brand ambassadors.
While the rest of Kenyans found the plight of the lady hilarious and funny, Safaricom were seeing their customer in distress and in the process she ended up on billboards and she was a guest in our homes on our TV sets just before prime time news. Give it to Safaricom; they know how to connect with the man or woman at the bottom of the pyramid.
Bottom up model in private sector is very much alive and kicking, even the consumer goods packed in smaller quantities so-called kadogo economy is bottom-up model and trading with the folks at the bottom of the pyramid.
Our political class SHOULD study Equity and Safaricom models, but MUST drop the corruption gown.
The bad news is that bottom up in public sector won’t work as long as we are unable to slay the corruption dragon and our wasteful habits. It is one thing to shout bottom-up economic model but you must choose to walk Equity’s or Safaricom’s path to make it happen.
As a start, please begin with your local MP shouting himself or herself hoarse “bottom up” on how they have utilised the half a billion shillings in the last four years or even Ksh1 billion for those who are serving a second term.
To Equity Bank, Safaricom PLC and My MP Mohammed Ali, I salute you for making it happen right at the bottom of the pyramid. Our political class must study Equity and Safaricom models but, as they do so, they must drop the corruption gown at the door.
Well as always I choose to remain an optimist.
Great article