Sharing economy explained! Africa needs to latch onto this model aggressively…

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Credits: internet images

I like to think that the ‘Sharing Economy’ has always existed in Africa although under different terms. From my early recollection of African history, we were taught about how barter trade was the norm when people needed something they did not have. We were also taught about early African civilisations that had their own form of currency like cowrie shells (East Africa). The term Sharing Economy was first put together in the early 2000’s, so it’s a pretty new term although the concept in itself is old. This Economy model has always existed in business-to-business (B2B) circles.

I strongly believe that Africa would benefit from harnessing such a model at regional, national and global collaboration in a wide range of structures and industries. Africa is not yet fully industrialised but can take advantage of this model at country-to-country level (C2C- my coined up phrase) which is the what I want to expound on today.

What this model is;

Sharing economy is a hybrid market model which refers to peer-to-peer-based-sharing of access to goods and services usually coordinated through community-based online services (Business Dictionary).

This hybrid market model is also sometimes referred to as shareconomy or collaborative consumption. In simple terms one would say the sharing of human, financial and physical resources. These could range from trade, manufacturing, production, services offered, distribution, skilled labour, marketing and shared production (Benita Matosfka,2014).

The sharing economy can take any of these forms:

  • Exchanging, swopping, swapping
  • Collaborative consumption, group purchasing, shared ownership, shared value, co-operatives, collaborative economy
  • Peer-to-peer, wikinomics, peer-to-peer lending
  • Micro financing, micro-entrepreneurship
  • Co-creation, partnerships
  • Recycling, upcycling, trading second hand or used goods, circular economy
  • Renting, borrowing, lending,
  • Pay-as-you-use economy,
  • Open source, open data
  • Social media, social enterprise
  • Crowdfunding, Crowdsourcing
collaborative_info
Collaborative economy explained (credits: Collaborative lab)

The rise of this model has disrupted a couple of industries like the case of Uber causing a ‘scuffle’ in the taxi industry. Some the famous companies based on a sharing economy include Uber, Airbnb, Dogvacay, relayrides, TaskRabbit, Getaround, Liquid, Zaarly, Lyft, Lending club, Fon, Sidecar, Poshmark and Neighborgoods. Of all these, Uber and Airbnb seem to be rising way faster than the others.

Focus on Africa;

Economic development in Africa is failing to pick up mainly because of the inability to focus on growing that particular area of development through supporting local entrepreneurs and businesses. Some of the common problems faced in many African countries include:

  • Limited or no access to credit and funding
  • No access to information
  • Poor taxation systems
  • Red tape, corruption and bribery
  • Border restrictions
  • Unavailable or uneven distribution of skilled labour

Take away for Africa:

Sharing arises because of the need to reduce expenses, the need to connect with others, the need to save time as well as to protect the environment. All the four needs apply to  every African country and form the basis for the Sharing Economy.

A look at the Country-to-country (sharing economy model) will be instrumental in solving many of the problems mentioned above. A collaboration between different countries in Africa with the use of the technology platform will create more access to funding and credit, more distribution of knowledge relevant to development in Africa, access to skilled labour from other African countries that have a surplus (it could even be medical doctors at some point).

My C2C sharing model explained: a manufacturing industry in country A might be thriving and has excess capacity. Country B has agricultural produce that it exports in raw form because of a weak or lack of a manufacturing industry. Country B could instead rent or work with the manufacturing industry in country A to refine its product within the boundaries of Africa hence increasing the market value for that produce without necessarily having to construct a factory. Country B would then also be able to market her finished goods all over Africa because Africa would have remembered to get rid of the colonial borders and unnecessary visas for Africans within the continent.

c2c model
Sharing Economy: country-to-country

Being successful at the sharing economy calls for trust, transparency and innovation. Africa would have to deal with the red tape and corruption for this model to excel. A step towards this would be to create a favourable platform for African leaders that are well rounded and free from the chains of colonial mentality. African leaders that have a heart for the continent and its people… leaders who are ready to front Afrocentric values and ideologies instead of blindly copying ideologies from the western nations (many of these ideologies are meant to keep Africa in clutches i.e the case of Aid).

Sharing Economy pillars:

  1. Culture: promotion of unity through the community structure of the model
  2. Communication: it’s open hence shared information accessible to all
  3. People: they are the basis of the sharing economy
  4. Production: this can happen across borders
  5. Systems of exchange: it’s a hybrid model and therefore can be modelled to conform to that community or the parties involved
  6. Distribution: promotes a fair distribution of resources
  7. Environment: because of models like circular economy, there’s special regard to the impact on the environment
  8. Law: is democratic and protects the interests for all parties involved.
  9. Empowerment: this model empowers parties involved economically and socially
sharing economy africa
Sharing Economy for Africa

So, Africa does not need to follow what other continents have been through. It was predicted that Africa would be left behind in the era of mobile phone technology because by that time the other worlds had adopted that technology, they had landlines in every home which Africa had not done. Fast forward, Africa has even managed to reinvent banking through the mobile telephone.

In a nutshell, sharing makes the economy more efficient and environmentally friendly especially in a world where climate change is a threat with Africa being impacted most yet she has contributed about 2% to the problem.

It would be interesting to see how this model can be adopted to solve some of the problems in Africa.

 

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3 thoughts on “Sharing economy explained! Africa needs to latch onto this model aggressively…

  1. Great post its within African core values to do this. I’m glad there’s someone else who is thinking on these lines for our own people on the motherland and diaspora.

    Like

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