Cellphones and Economic Development

Ghana, like most countries in the global South, has a large and vibrant “informal sector,” that is, a sector where people–often for lack of formal employment–buy and sell thinks to make a living. Walking down Barnes Road towards the ocean, and then cutting over to Kwame Nkrumah Ave via Kimbu Road, the sidewalks get more and more crowded by traders until there is barely a foot-wide path left to pass. The wares offered for sale include everything one might need in daily life. Smoked and fresh fish, vegetables of all sorts, poultry (slaughtered and alive), rice and oil dominate, but there the whole array of your usual grocery store is for sale. With one exception: I would venture that the single item being offered most frequently was pre-paid air time for mobile phones.

Given that the airtime prices were fixed, there was really no competition between the various traders on price. So what little competition there was consisted of the nature of the display and the size of the booth. It seemed as if entry into this business was extremely easy and required very little start-up capital. A table–sometimes painted in the colors of one of the companies–was all that was needed. Colorful hand-painted boards advertised the rates and systems available. The more elaborate setups featured enclosed booths. I had a sense that, like the 500ml water sachets, these coupons were spur of the moment purchases driven by the immediate need to recharge. The enormous frequency of sellers clearly was a response to that buying behavior. It was clear that the mobile companies knew their market. Airtime coupons were available for very little money and the cost per minute were rather low. 

I ended up getting a local SIM card for my GSM phone and the Tigo card cost only 3 cedis. After adding 4 cedis of airtime I was set up to call locally and overseas for a pretty large amount of time. Connection quality was great. Phone calls to Germany and the US sounded crystal clear. 

A report in this week’s NY Times magazine highlights the importance of mobile phones in developing countries through the eyes of a “human behavior researcher” working for Nokia, the mobile phone maker. The report repeated some of the things already well know–the importance of SMS texting to stay in touch–but also included new uses to which cell phones are being put including transferring money to relatives via pre-paid airtime coupons. The writer made the point that mobile phones provided a fixed point in a world that for most people was very much in flux. I would second that statement. The mobile phone seemed a crucial communication tool for most people that I met in Ghana. 

Share: Email this to someoneTweet about this on TwitterShare on TumblrShare on FacebookPrint this page
Tagged on: ,