The Economics of Kenyan Cupcakes

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Sugarpie Cupcakes. Nairobi, Kenya

Nairobi’s first cupcake shop demonstrates the power of a rising consumer class — and teaches a lesson about labor in emerging economies, too.

If anyone needed more evidence that Kenya’s economy is on the rise, a sort of confirmation arrived recently — in buttercream and a half dozen flavors that change daily.

Sugarpie Cupcakes in Nairobi has won plenty of fans and local press, attesting to this city’s changing tastes. The expats tend to favor Belgian chocolate, while the Kenyans prefer chai or red velvet, but overall sales have grown fast since the business launched late last year.
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Running the business is no cakewalk — but its vagaries and workarounds reveal a lot about Nairobi’s consumerist aspirations, and the economics that underlie them. A rising number of middle-upper-income Kenyans sees cupcakes as one of many small luxuries they can afford. And some among Kenya’s large, (non)working class see that as something to aspire to.

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The Map That Could Save Africa a Trillion Dollars

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SIMON DAWSON/BLOOMBERG/GETT

In the 19th century, foreign explorers came to Africa in search of ivory, rubber and slaves. Today, they come for Africa’s minerals — its copper, zinc and tungsten. The developed world needs them for its skyscrapers, cell phones and much in between.

The exchange is sometimes unfair. Often, African governments don’t know the value of the natural resources underground, but mining companies from the West — and, increasingly, China — do. That knowledge asymmetry has cost African countries and their citizens as much as $1.4 trillion over the past 30 years.
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But a more level playing field may be in sight, thanks to a World Bank initiative that aims to compile Africa’s mineral maps into a single, public database: the so-called Billion Dollar Map. The goal is to give African nations as much information as possible about their natural resources so that they can earn a fair price for the minerals they sell, World Bank officials say.

While mineral maps of the African continent exist, most are private or piecemeal. The Billion Dollar Map is crucially different: Its contents will be available to the public. And that, experts hope, will minimize underpricing and corruption, and help governments get a fairer price for their countries’ resources.

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Getting Out of Gridlock, One Text at a Time

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Din Haitao/Xinhua /Landov

Urban Kenyans hate wasting time in traffic as much as you do, and they’re turning to mobile-phone apps to free up the road.

By Jacob Kushner
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Traffic in Nairobi is so mind-numbing it makes L.A.’s Interstate 5 look like the Autobahn. Motorcycles squeeze between cars and trucks that practically park on major boulevards and highways. Street peddlers walk to and fro selling newspapers, flowers, air fresheners and children’s toys to captive audiences. Roundabouts become cartoonishly clogged.

Nairobi is the world’s fourth most congested city, far worse than any in the U.S., according to a 2011 survey. Kenya’s government estimates traffic jams cost Nairobi $600,000 per day in lost productivity and wasted fuel. That’s $219 million per year.

As the number of cars on the road increases, the city’s future holds even more frustration and waste, unless Nairobi can find a different type of solution for its traffic woes. One team at IBM’s headquarters in Nairobi thinks it’s found an answer – and if it works, it could provide relief to millions of commuters throughout the developing world.
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Read the full story at OZY.com or at NPR.