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Last Updated: Monday, 26 May, 2003, 23:07 GMT 00:07 UK
Powering the global village

By Briony Hale
BBC News Online business reporter, Accra, Ghana

Few Americans will appreciate that some of their sports socks have journeyed more than 10,000 miles to Africa and back in order to acquire a seam across the toe.

But such is the nature of the global economy.

Lady sewing socks in Tema
Sewing: $13/hour in US, $3/day in Ghana
Sophisticated US factories turn cotton into socks, but the developing world provides the cheap labour for the finishing touches.

Ghanaian entrepreneur Sam Adabla and Ken Winston, a veteran of the US hosiery industry, chat over the internet for several hours a day coordinating the shipping, sewing and packaging of up to 750,000 pairs of socks a week.

And almost 500 workers - none of whom wears socks - are busy at work in an old cocoa bean warehouse in Ghana's industrial town of Tema - 24 hours a day, seven days a week - surrounded by mountains of socks.

"It's technology that allows the global village to happen," says Mr Adabla. "The phone bill would be too expensive - without the internet we couldn't do it."

False hope?

Mr Winston agrees that the internet - and instant messaging programs in particular - makes all the difference in allowing his cross-continent business to run smoothly.

Sock factory at Tema
3,600 pairs of socks are processed in eight hours
But neither party believes the promise that technology can create more of these opportunities and help African countries achieve the long standing goal of greater participation in the global economy.

Sub-Saharan Africa has for years failed to win a greater share of foreign trade and investment, while Asia has steamed ahead as the centre for cheap manufacturing.

And African countries have repeatedly been advised that building better information and communication highways will allow them to gain a slice of the action and help alleviate poverty.

Ghana's sock-seaming factory is a shining example of an African business in the world economy. But it is a rarity.

No money

Indeed, it is so unusual that it merited a visit earlier this year from Ghana's President Kufuor, who said he hoped more such international business would spring up for Ghanaian companies.

Sock factory at Tema
More than 1,000 people queued for a job
Ordinary Ghanaians are also desperate for more of it. More than 1,000 would-be workers queued for 160 jobs when the factory first opened.

But technology and improved communications seem unlikely to be able to overcome the more fundamental problems preventing an expansion.

"Sourcing capital is the biggest problem," says Mr Adabla.

The African Growth and Opportunities Act (AGOA) on trade gave Africa the opportunity to export textiles tax-free to the US, but there isn't any money here to build factories in the first place, he says.

AGOA was introduced in May 2000, but when Ghana's sock factory started shipping socks in November 2002, it was the first West African country to take advantage of the legislation.

The power of perception

Then there's the problem of trust or, in business parlance, investor confidence.

Sock factory at Tema
A 40ft container of socks is turned around in one week
There was originally much hype about the power of the internet to match-make business partners at opposite ends of the world.

But both Mr Adabla and Mr Winston say such business relationships can never be forged without personal contact, a theory backed up by recent research.

The 74-year-old Mr Winston has had a personal interest in West Africa's cotton business for more than 15 years and he met the US-educated Mr Adabla through embassy contacts.

A gamble?

"We've been lucky and met the right people who are willing to gamble by leaving their raw materials with us," said Mr Adabla.

Sock factory at Tema
Workers are paid according to how fast they finish socks
"We need to find the missing link, someone to let go of their products and give us the chance to prove what we can do."

Mr Winston's enthusiasm dries up when asked why more American firms are not following his example.

Africa, he finally admits, is perceived to be backward.

"The investors are looking but they're not comfortable yet, they need to see more living examples," Mr Adabla concludes.

It is people prepared to invest in Africa that are the missing link in this chain, not the technology that is already powering the global village.


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