Former Nigerian finance minister emphasizes the importance of technology in the fight against global poverty
With civil conflicts, climate change, and the number of displaced people all on the rise, the fight against poverty is likely to become more difficult in the coming years.
But that bleak message — delivered by Nigeria’s former finance minister during the launch of the Stanford Center on Global Poverty and Development —was countered with anecdotes and evidence that simple applications of technology can play a big role in curbing global poverty.
“Technology can solve real world problems in low resource places,” Ngozi Okonjo-Iweala told the packed audience, which included three former Stanford presidents. She noted that context can matter in unexpected ways for the success and failure of technological "fixes." To illustrate her point, she shared several examples of cases where technology worked well, as well as instances when proposed solutions did not work out quite as anticipated.
The simplest and most prevalent technology she returned to time and again was the mobile phone – a device owned by nearly all Africans.
The ubiquity of the technology has led to some unexpected — but important — impact. Hamstrung for the past three decades by a corrupt system where unscrupulous middlemen were driving up fertilizer prices, farmers can now use their mobile phone and electronic payment systems to buy products directly from legitimate fertilizer dealers.
This change in doing business has led to a doubling of rice yields and a savings of over 160 million dollars a year.
Okonjo-Iweala encouraged the students, faculty, and researchers in the audience to get to know the people they want to help, before they simply show up with a solution they think might fix a problem. A place like new Center on Global Poverty and Development, she said, “represents precisely the multi disciplinary approaches needed to fight poverty.”
The Center, a joint venture between the Stanford Institute for Economic Policy Research and the Stanford Institute for Innovation in Developing Economies, known as Stanford Seed, encourages new initiatives and collaboration across the university.
Directed by Grant Miller, the Center’s goal is to support research that can help alleviate global poverty, while also energizing graduate and undergraduate students and fostering collaborations with thought leaders to make a real-world impact.
In his opening remarks, Miller emphasized the Center’s aim to contribute to the “insights and ideas that translate into real world results in world development.”
Despite the overwhelming challenges, however, Okonjo-Iweala, who is now Chair of the Board of Gavi, the Global Alliance for Vaccines and Immunization, contended that collaborative thinking and careful attention to context can make deep, long-lasting impacts in the fight against poverty.
Prefacing this sentiment was Stanford President Marc Tessier-Lavigne. The Center, he said, “will enable Stanford’s efforts to make a difference in lives and communities around the world. And if we can make a difference, we must, and with all of you, we will.”
And Okonjo-Iweala’s keynote address, “Enabling Development: When Can Technology be Effective?” centered on the importance of contextualizing the technologies — big and small — that can make a significant impact on the lives of the poor around the world.
Okonjo-Iweala, who served two terms as Nigeria’s finance minister and was also the Managing Director of the World Bank, stressed that mobile phones and internet access have connected the developed world and those living in even the poorest, most remote of places.
Young people all over the world can now see the safety and economic opportunity that others have and they do not. “They see inequality in their lives,” Okonjo-Iweala said, adding that “Nobody wants to live in poverty.”
Moving forward, Okonjo-Iweala said, technology has to be part of finding ways to improve the conditions that are now driving people from their homes.
As an example of how to achieve this, Okonjo-Iweala pointed to how mobile phones have become a tool in improving teacher absenteeism in Liberia.
Traditionally teachers have had to travel significant distances in order to receive and deposit their paychecks, spending up to 15 percent of their earnings on the trip. This travel time meant missed days in the classroom, leading to decreased learning for their students. However, mobile phone banking now allows direct deposit to their accounts, dramatically cutting down both the time and money cost of receiving their pay.
Okonjo-Iweala looked back on her own experience as Finance Minister in Nigeria for an example of how applying technology in the right context, in this case government procurement, made a huge impact.
Worldwide, 15 percent of global GDP is spent on government procurement, amounting to over 9 trillion dollars. In Nigeria, the cash-based financial system was being abused to cover 60,000 “ghost workers and pensioners,” bleeding money out of the economy, she said.
In order to curb this, Okonjo-Iweala was part of a decade-long effort to introduce the Government Integrated Financial Management System. Using technology to keep track of payments made to government employees eventually led to a savings of 1.2 billion dollars, and perhaps even more importantly, it was a step to “restore trust in the government.”
Following her keynote address, Okonjo-Iweala engaged in conversation with Pascaline Dupas, Associate Professor of Economics at Stanford and Center faculty affiliate, before taking questions from the packed audience.
Please note that prior to May 2019, the Stanford King Center on Global Development was known as the Stanford Center on Global Poverty and Development.