OECD Observer
An e-world apart
Developing the Internet in poor countries can be a difficult business.
africa, city, development, growth, OECD, urban

Stephan-Noël looks anxiously about the hut at the computer terminals. Through the walls of thatch drifts the faint, pervasive scent of vanilla. A girl saunters in, her face painted with the saffron used by Malagasy women both as make-up and protection against the sun. Stephan-Noël exchanges a few words with her, but his mind is on the eventuality of a connection break.

At the computer terminal in the corner, another girl chats into a headset. She is a rarity here; most of the clients are vazaha, the Malagasy term for whites. At 150 ariary per minute, 15 minutes online costs the equivalent of 90 eurocents, a negligible sum for the vazaha, most of whom are tourists. But for the Malagasy in this region, whose average monthly salary is 70,000 ariary, 15 minutes online is a day’s earnings.

“I try to keep the price down,” says Stephan- Noël. The 29-year-old graduate from a technical institute in Mahajanga opened the only cybercafé in Ambatoloaka five weeks ago. The village is located on Nosy Bé, one in a clutch of small islands that form the ragged dorsal of Madagascar’s northwest coast.

Frequent connection breaks mean that customers, for the most part tourists, are unlikely to linger online, and if there is a break, they still have to pay. Fortunately, Ambatoloaka is spared Madagascar’s legendary power cuts. Villagers rely on private generators, candles or nothing at all. At night, families eat dinner in front of their shacks, a single candle illuminating the table; others squat in darkness on the kerb. Most of the generators power Ambatoloaka’s few restaurants and bars.

Running a generator all day adds up. Stephan-Noël spends 14,000 ariary per day for the five litres of fuel necessary to power his six computers. While he admits he could save money by starting the generator only when a customer arrives, customers tend to grow impatient waiting until the computers can be booted, and leave. They may drive–or walk–the 10 kilometres to Hellville, the island capital named after a French admiral. “Hellville has three–no four, I think–cybercafés.” One reason Stephan-Noël set up in Ambatoloaka was the absence of competitors. The cybercafés in Hellville also have wider screens, which customers prefer. “But they’re more expensive,” he says.

At the mention of broadband, he just smiles. “No, it’s not broadband. But there is talk of installing DSL wireless.” There is a hint of resignation in his voice, as if he doesn’t want to get his hopes up.

Stephan-Noël bought his terminals used, for 900,000 ariary (€360) each. Not with his own money–loans are difficult to get–but with that of his German backer. (According to the 2007 OECD African Economic Outlook, credit to the private sector was only 10% of Madagascar’s GDP last year, compared to 14.8% of other low-income countries.) How many investors in Internet are foreign? “All,” he answers, without hesitation. The Malagasy, he says, lack confidence. It is a word he uses often, always in the sense of there not being enough of it.

He has failed to interest local hotels, though the island is a growing tourist destination. “I think the biggest problem is education. Most people here do not know how to use a computer.” Only five in 1,000 Malagasy use the Internet, according to an OECD report on Africa. The figure is unsurprising. A jaunt from Ambatoloaka to Hellville in one of the old Renault 4L’s the Malagasy are adept at keeping on the road, gives little reason to believe that technology has reached this area. Families live on subsistence farming, growing rice, vanilla and ylangylang (used in perfumes); zebu provides both meat and transport.

To entice customers, Stephan-Noël offers free tutoring in computer literacy. He himself counts among the handful of Malagasy to have completed more than secondary education. Compared to other developing countries, Madagascar ranks among the lowest in the world. Just 7% of children are in school by the time they reach the ages of 15-18, and only about four out of 1,000 go on to higher education. Poverty and illness are the chief reasons. A local teacher says that during the rainy season, many children are too sick with diarrhoea and malaria to attend school.

Governance issues have been the biggest deterrent to investment in Madagascar, even more than its lack of infrastructure. Among the 178 countries ranked by the World Bank according to the ease of doing business, Madagascar rates a discouraging 149. Entrepreneurs like Stephan-Noël struggle to revive confidence withered by decades of poor governance and corruption. This business climate has sharpened the traditional prudence of the Malagasy, for whom tsiny–a concept denoting the permanent sense of guilt that imbues Malagasy culture–dictates behaviour. A Malagasy proverb states “When I and another man enter a forest, he is my assurance, and I am his.” Once Stephan-Noël and others like him find that assurance, they will be halfway out of the woods.  LT



  • OECD (2007), African Economic Outlook 2006/2007 (new 2007/2008 edition now available), Paris.

©OECD Observer No 268 June 2008