Hi, My Name is Akon

This episode features Akon, the Senegalese rap superstar turned social entrepreneur, with excerpts from my conversation with Professor Paul Collier of Oxford University. We sat down with one of the most exciting entrepreneurs working in developing markets, and perhaps the foremost economist on African development. These are two heavyweights in their field, positioned to speak about how to think and do business in developing markets. We discuss how Akon started a 400 million dollar solar micro-grid company that has expanded into 17 developing countries in just three years,  expanding across Africa. Our next episode will feature more of my conversation with Sir Paul Collier, former director at The World Bank who has written five books including The Bottom Billion, as well as excerpts from my interview with Samba Bathily, the CEO at the helm of Akon Lighting Africa. Our article supplements these fascinating interviews, fleshing out the picture of what is working in Africa, and the new force that is socially minded entrepreneurship in the developing world.

How Akon Set Out to Become an Elon Musk for Africa

‘Hi, my name is Akon. I have done more for the people of Africa than all of the charities in the past 30 years combined, by providing solar energy to 80 million Africans in 14 African countries.’ The meme popped up in my inbox with the face of the Senegalese hip-hop/R&B artist staring into the camera before a field of solar panels. What could the musician, actor, entrepreneur, and the voice artist behind the triple platinum single Smack That have done to impact Africa? Memes are provocateurs, but when I spoke to Akon he told me that it wasn’t 14 countries anymore, today it’s 17. Founded in 2013, Akon Lighting Africa has already invested 400 million dollars in solar micro-grids in African countries. Akon’s excitement over the patchwork he is building across the continent is oddly contagious. While he speaks knowledgeably in the smooth intoxicating style of a voice artist, the substance can be all techno-entrepreneur.  Like Elon Musk, who helped build the largest solar provider in the United States (Solar City), Akon is a member of a new generation of socially conscious renewable energy moguls. Akon Lighting Africa (ALA) is rapidly scaling their business model, which is based on demonstrating commitment by providing solar systems up front, and structuring re-payment. This model allows the company to follow words with rapid action, and avoid much of the endless gridlock that comes with demanding large amounts of money up front. The success of a few companies like ALA comes just as multinationals from Barclays Bank, to Nestle, to Coca Cola have withdrawn from African markets in the face of corruption and a stagnant middle class. This is the unlikely story of how a small team of West Africans built a nimble energy company succeeding in some of most inhospitable developing markets on earth. In doing so, they are creating their own pipeline of skilled, local African workers through the Solar Academy founded in Mali in 2016. Economists agree that jobs and training are pure gold for developing nations, the keys to the elusive stability and growth they so desperately need. In an age when the West is becoming increasingly disenchanted with the power of aid and NGOs to create long term growth, the story of ALA and its operational arm, Solektra International, sheds light on the brave new world of social entrepreneurship creating an impact in the developing world.

The recipe for Akon Lighting Africa was not a single rapper. Akon is joined by two formidable co-founders, both of whom provide the ingredients required for success in a complex and risky undertaking. Thione Niang was one of 28 children born in Senegal. He began working as a busboy when he arrived in the U.S. with only 20 dollars in his pocket, to a U.S. college graduate, to the Obama campaign fundraising division. He is currently the Ambassador to the Ministry of Energy for Minority Energy Entrepreneurs and an ideal political/fundraising agent when Akon brought him on as a cofounder of ALA. His involvement reveals the importance of political support and investor perception for an organization seeking socially minded private dollars.  Mali businessman Samba Bathily is the man Akon chose as CEO of the organization, boasting long experience in the African telecommunications and energy industry that he brings to bear on the project. He started and runs both NGOs and private enterprise from his homeland in the center of the continent. Bathily’s deep roots in Mali is the reason ALA founded The Solar Academy Initiative there in 2016. This endeavor provides skilled, young African technicians, engineers, and entrepreneurs the opportunity to build and maintain the mini-grid systems locally. This represents the evolution of ALA as it goes beyond the installation of micro-grids and into the critical work of creating human infrastructure to expand the undertaking.

Perhaps the greatest roadblock to private sector growth in Africa is that to most companies and entrepreneurs outside of Africa, the continent might as well be Mars. And not the exciting Mars Elon Musk plans to land a Dragon V2 Capsule on in 2020, but a remote dead place, worthy of consideration only by the charitable. In this imagined place, all investments are speculative and morally fraught. African investment has long suffered from the kind of malaise and pessimism from which space exploration suffered after the collapse of the Soviet Union. Paul Collier called it ‘sticky investment rating’: once a bad investment where private companies cannot innovate and profit, always a bad investment.  In his 2009 book The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done, Collier pointed out that, “The problem for the reforming countries of the bottom billion is that the risk ratings take a long time to reflect turnarounds.” So why did an American rapper whose previous investment in Africa was in a diamond mine sell the mine and start a renewable energy company on a desolate continent he left long ago?

In 2010 Aliaume Damala Badara Akon Thiam returned to his Grandmother’s house in a village in Senegal where he spent large parts of his childhood. The son of a jazz musician who bounced back and forth between the U.S. and Senegal, Akon returned a national hero with the simple aim of buying a new house for the woman who helped raise him, ideally one with electricity. Shortly thereafter, Akon hit his first roadblock. “She didn’t want to leave the house that she had pretty much raised all of us in. You know, grandparents are really stubborn,” Akon recalls as he reminisces upon that first failed enterprise: moving an old women to a new house. The village to which Akon traveled in 2010 lay 65 miles from the nearest major population center, one of so many parts of rural Africa too far afield, and too poor for utilities to reach. Akon first tried to bring power to the village by meeting with his friend the Senegalese President Abdoulaye Wade. President Wade told Akon that such a major infrastructure project was, at that time, beyond the means of Senegal. So Akon traveled to The Middle East looking for energy investors to support the project. This was the moment when the entrepreneur explores the old broken way of doing business before he or she is forced to innovate. Like Elon Musk who went to Russia looking to buy rockets for Space-X before he built his own, Akon went to Saudi Arabia looking to build power plants. He found energy investors to the north of Senegal willing to fund the construction of several plants. Akon returned to Senegal to get the body politic on board with the project. “I ran into a lot of politics, and I realized wow, I’m in a business that creates wars. So this definitely is not as easy as I expected.” The political infighting Akon encountered hamstrings investment and discourages investors in places where regulations are agonizingly cumbersome, and politicians obstinate.  Large scale infrastructure projects relying on major outside investment quickly become politicized, as the beneficiaries fight for money that must come in part from leaders and constituents who will receive nothing. Akon remembers how, “He [President Wade] said listen son, I know you’re trying to do great things for your country, and this and that, but I think you have to find a different solution.”

That different solution became a company better suited to circumnavigate intractable political infighting. It is the kind of nimble company that is filling the void in African markets abandoned by multinational corporations. “I was riding down the street and I saw this light bulb. I saw this solar panel light bulb that someone was selling on the side of the road. And that’s when it hit me. Wow, that’s the solution, because when you think about it, Africa has an abundance of sun, and it’s our biggest resource.” To explore solar as a potential solution, Akon then traveled to Guangzhou, China to meet with the largest Chinese solar manufacturers. The moment that Akon chose to explore the potential of solar energy was perfectly timed. The U.S. levied tariffs as high as 165% on imported Chinese solar cells to protect American manufacturers, and Akon found massive underutilized solar manufacturing capacity meant to serve markets in the United States and Europe.  In the case of solar, China is a tech leader, having spent the last decade snapping up US solar technology out of the practical necessity of combatting horrendous pollution.  “We found so much stuff that wasn’t even on the market yet,” Akon remembers. When he left China, he did so with a 1 billion dollar line of credit with which to bring solar to Africa, and to provide the upfront investment that would make Akon Lighting Africa a success. The biggest challenge for ALA became convincing African leaders of the superiority of Chinese solar systems over the alternatives, a job that continues today as the company quickly establishes itself across the continent.

Akon’s story echoes other success stories in African business today, most often from companies creating markets and focusing on self-reliance in defiance of obstacles and gaps in infrastructure. One example is the Taloram Company which sells 20 cent packets of noodles in Nigeria. In Africa’s New Generation of Innovators from the January 2017 issue of The Harvard Business Review, the authors note that Taloram controls 95% of production inputs, and makes 1 billion dollars in revenue annually. Selling 20 cent noodle packets to working class Nigerians is not so different from electrifying villages for $75,000 a piece on average. The village by village solar panel model is the ‘20 cent package of noodles’ solution for infrastructure development where millions of dollars and heavy involvement by the government is the norm. The middle class in Africa remains stagnant in many countries. Addressing the needs of that ‘bottom billion’ that Western companies tend to ignore in favor of more affluent markets is the recipe for building the success that Akon and a few others are harnessing successfully.

The emergence of ALA comes at an auspicious moment for solar technology that promises growth to those companies positioned to capture market share in the next few decades. Innovation in the solar industry is occurring at a breakneck pace. Solar modules cost $300 per watt in 1956, $50 per watt in the 1970s, $10 in the 90s, and around $1.00 a watt today including installation, modules, and electronics. Pinpointing exact prices including the variable ‘soft costs’ (installation) of solar can be difficult. Those ‘soft costs’ decrease slower than the price of the cells themselves, but evidently the current state is poised at a threshold past which solar will compete on price anywhere in the world. To gain perspective on the maturation and proliferation that this technology will enjoy in the next few decades, consider the U.S. Department of Energy’s SunShot Vision Study which projects 10% of American energy coming from solar by 2025 (100x the current 0.1% market share) and 14% coming from solar by 2035, 140x the current market share. This in-progress explosion in the United States where installation and manufacturing costs are comparatively high, is good for news for a company using Africans to install solar panels in Africa. The current effective cost of solar is around nine cents a kilowatt hour, a price point that is already competitive with traditional energy generation costing around 12 cents an hour. Yet over one-third of photovoltaic cells currently in use  are in Germany, also the world’s largest photovoltaic manufacturer, but a country about as sunny as Alaska. China expects to surpass Germany in production of photovoltaics by the end of the decade as German plants close due to market competition and flagging government enthusiasm for subsidies. However, the move of the industry South and East into poorer, sunnier markets may be a natural evolution as Germany is on track to achieve 60% renewable energy for themselves by 2035.  “We’re going into Latin America, Brazil,” says Akon. “All the emerging markets. And of course we’re going into India too. But that’s the beauty of it. Emerging markets aren’t just in Africa, they’re everywhere.” This is how we should think of companies like ALA, as experts at surviving in emerging markets.

If you are like many Westerners raised on stories of African famine and AIDS epidemics, right now you aren’t sure how you feel about a company charging villagers for solar panels. When partaking in business in Africa, the scarcity of private sector dollars does not go unnoticed, and the word ‘donation’ is more familiar than investment when it follows a discussion of the continent. Yet in Dead Aid: Why Aid is Not Working and Why There Is a Better Way for Africa, author Dambisa Moyo notes that the transfer of 1 trillion dollars to Africa in the form of aid in the last 50 years put the recipients in a worse-off position than if they had not received it in the first place. Professor Paul Collier at Oxford is in relative agreement with Moyo, testifying to the destabilizing effect that aid can have on political and economic systems. The classic example Moyo uses is the donation of 1 million mosquito nets to a malarial region of Africa that puts every local mosquito net manufacturer and repairman out of business. Aid is in practice simply less reliable over time, and that makes all the difference. Most critically, aid fails to produce pipelines of skilled labor and jobs, the makings of long-term stability. “The way I see it, aid is only beneficial when there is a natural disaster,” says Akon, “but if there’s no natural disaster you’re handicapping people. It becomes a natural disaster because now you’re handicapping them, you’re putting them in a position to get fed, not to feed themselves. It never worked.” The voice of a self-made Senegalese immigrant joins an increasing number of modern development theorists pulling few punches as they point to business, not aid, as the critical ingredient for Africa’s health and growth.

Though Solektra International emerged to treat African energy problems, Akon and Samba Bathily understand that with any luck, they created a model that provides services to emerging markets everywhere. At their best, companies of this type allow countries to leapfrog stages of development. In 2000 around 1 in 10 Africans had cell phones. Today between 64% (Uganda) and 86% (South Africa with the same percentage as the US) of African countries have cell phones. Telecommunications matured and proliferated, and that will both drive and hopefully be the track of other maturing technologies like solar energy. Only 5% of the population owns smartphones in Uganda, 34% in South Africa, and it is here that we can glimpse what energy and access to technology means for developing a globally competitive African populace. "To connect people living in remote regions, traditional connectivity infrastructure is often difficult and inefficient, so we need to invent new technologies,” said Facebook CEO Mark Zuckerberg talking about, which plans to launch satellites to provide affordable internet in Africa. Imagining a future when a child in a remote African village uses a solar powered cell phone and satellite internet to teach himself algebra online is achievable in our lifetime.  The value of such access cannot be undervalued on a continent of young strivers, but it is not everything. Security, a stable job, food, and water require more than energy acess. But energy is a big deal when it comes to creating opportunities for an Africa that has median age of 19.

Like any good visionary, Akon has grand ambitions. “Stage three is Akon Food in Africa. Which is where we’re now going to start going into all of the agriculture, taking full advantage of the rich soil out there, and making agriculture cool. And that’s the biggest challenge. What young kid under 21 wants to get into agriculture? How are you going to survive if you can’t make your own food? I already figured out the plan to make agriculture cool. I think it’s really African solutions for Africans.” Perhaps a rapper is the perfect person to understand the role of both African and Western perception in the success of ambitious African enterprises. Sierra Leone imports over 100 million dollars worth of rice annually, even as 56% of the population is actively engaged in subsistence agriculture. One cannot mechanize an activity that over half a country currently performs by hand without waging a public perception campaign. In fact, the term ‘mechanized African agriculture’ makes knowledgeable people nervous. That being said, when I asked Professor Collier about the subject, he said he favors the long term mechanization of agriculture in Africa. Though potentially a painful process, Professor Collier compared it to the transformation that began in Bangladesh with the arrival of a single foreign garment manufacturer. The company was quickly mimicked by Bangladesh owned companies and it eventually led to 20 billion dollars in annual clothing exports a year today. Revolutions like this are rife with ugly problems, but they generally do more good than harm by creating opportunities and raising the standard of living exponentially in just a few generations. It is worth noting that the man with all the optimism in the world for his own potential to create change in Africa spent three years behind bars in American prisons. Akon would be the first to remind us, “the past does not determine the future.” This African chameleon, who has himself transformed many times, should be one of Africa’s transformation architects. When I asked Akon who his hero was, he spoke with great admiration of a fellow African native. “The one person that I really love, and I love what he’s doing is Elon Musk. He’s the one guy I’ve been watching for the last five years, and I’m saying to myself he clearly gets it. I know his vision is solid, and I can feel it, and he can feel it, and that’s why he’s relentless. I love love love how he’s moving.”