The Sharing Economies of Africa

Alaba Market
The Sharing Economies of Africa
Edozie Ameke reflects on the sharing economies of Africa

The Scottish economist Adam Smith’s Wealth of Nations is one of economic history’s most famous bestsellers. In his book Smith argued that nations all over the world would prosper through the individual pursuit of individual profit. But what about in Africa? 

Adam Smith never journeyed from Edinburgh further than to France and Switzerland, but prior to Smith, Arab lawyer and traveller Ibn Battuta travelled down the east coast of Africa in the 14th century, and found a market in Mogadishu, and wrote about it. 

When merchant ships came to the harbour, he recalled, they weren't allowed to land. Instead they had to drop anchor. Boats came out to them in the harbour, and the locals picked up the merchants and said, ‘You are my guest. I am now your broker.’ If these merchants didn't conduct their business through the broker, they could be taken to court, and any business deal would be cancelled. They also risked being banished from the town. And through this mechanism, everyone prospered. 

We can find examples of this mutual aid economy in modern Nigeria in Alaba International Market, the largest electronics market in West Africa. It has about 10,000 merchants and a turnover of four billion dollars every year. The merchants are ardent apostles of Adam Smith: ‘competition is great,’ they say. ‘We're all in it individually, the government doesn't help us.’ 

This market is governed by a sharing principle. Every merchant, when you ask them, ‘How did you get started in global trade?’ will say, ‘Well, when my master settled me.’ 

So what is this 'settling?' 

‘Settling’ is when you've completed an apprenticeship with someone you work for, who is absolutely required to set you up in business. That means paying your rent for two or three years, and providing you with a cash infusion so you can go out in the world and start trading. That's locally generated venture capital, making the Igbo apprenticeship system governing Alaba International Market the largest business incubator in the world!

Other sharing economies can be found in Africa. There's something called acequias, a Spanish word derived from North African Arabic. Acequias are sharing systems used where water for farming irrigation is scarce. It migrated from North Africa to Spain, and then from Spain to the Spanish colonies, including states in the USA like Texas, where the system still is used today. 

This system shares water by need rather than by who lived there first, and
people in areas where acequia exist have been commonly managing scarce water resources for hundreds of years. They are managed communally, and take care of scarce capital, scarce cash and scarce resources. 

We have two kinds of capitalism in the world today. We have the ‘capitalism of the top up’ where three one-thousandths of one percent of the Nigerian population controls wealth equal to one-fourth of the country’s GDP. In Kenya one one-hundredth of one percent of the population controls wealth equal to 75% of its GDP. Then we have the ‘bottom down economies,’ in sharing models like the Alaba International Market. 

The world’s superpowers have encouraged Africa to develop an industrial and militarised attitude towards the economy. But we don't have to imitate this mindset. If we learn to share wealth in our economies, we can bring infrastructure to everyone to ensure that communities are leading in their own development. Africa can do things differently – and maybe restore some humanity to the world.