The Prosperity Paradox: Efosa Ojomo on Why Africa Needs Market-Creating Innovation, Not Aid

Efosa Ojomo (Prof) was born in Nigeria and trained as an engineer in the United States. For a time, he followed the familiar trajectory: a comfortable career, a stable life, and a one-way ticket out of Africa.

However, in 2008, a chance encounter with books on global poverty changed everything. “The magnitude of poverty hit me, and I had to do something about it,” he later recalled. A year later, he co-founded Poverty Stops Here, a nonprofit funding primary school education projects and providing microloans to individuals in impoverished Nigerian communities.

His experience, however, revealed a perpetual challenge in development work: well-intentioned projects often fail without sustainable structures. After a decade of operations, the organization ceased activities in September 2019. Ojomo realized that traditional development models, though generous, often provide temporary solutions rather than lasting impact. 

Seeking a new path, he applied to Harvard Business School. There, under the mentorship of the late Clayton Christensen, widely regarded as one of the most influential voices on innovation in the past two decades following the publication of The Innovator’s Dilemma. Ojomo was introduced to the concept of market-creating innovation: turning complex, costly products into simple, affordable solutions that expand access and bring more people into the economy

In January 2019, he co-authored The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty with his former professor Clay Christensen and Karen Dillon. 

Efosa is currently the Director of the Global Prosperity Research Group at the Clayton Christensen Institute for Disruptive Innovation. A persuasive speaker, his TED Talk, “Reducing Corruption Takes a Specific Kind of Investment,” has garnered over 2 million views, while The Prosperity Paradox: Why Most Poverty Programs Fail and How to Fix Them has reached a quarter of a million.

Earlier this August, Efosa was in Addis Ababa for the third Kifiya Knowledge Series as a keynote speaker. He later engaged with Shega’s Assignment Editor Etenat Awol for an exclusive interview discussing market-creating innovations in Africa, how technology can address the struggles of smallholder farmers, the role of governments in enabling innovation, and practical lessons for entrepreneurs seeking to build sustainable solutions in the Ethiopian context.

Shega: You were born in Nigeria and eventually found your way to Harvard, co-authoring The Prosperity Paradox. Could you share a bit about your early life and what shaped your journey? 

Efosa : Growing up in Nigeria, people in my circles saw America and sometimes the UK or Europe as the ultimate destination if you had the chance. That was where you’d get the best education, the best job prospects, the life you aspired to.

After high school, I took the exams, got the opportunity to study in the U.S., and bought a one-way ticket. Honestly, I had no intention of ever moving back to Nigeria or doing anything remotely close to what I do now. I studied engineering, graduated, got a good job, bought a house and a car. Life was comfortable.

Then, in 2008, by pure happenstance, I walked into a bookstore with a friend. He bought a book, and I decided to pick up the same one. That book was The Bottom Billion by economist Paul Collier. I loved it. At the back, Collier recommended a few others, so I bought Jeffrey Sachs’ The End of Poverty and William Easterly’s The White Man’s Burden. I just kept reading. 

It was fascinating that the world of poverty I had always known existed but never really connected with on that level. Most of us know there’s poverty, and we know Africa carries much of that burden, but reading those works made it real to me. I can’t fully explain it, but I knew I had to do something.

I’m a Christian, and part of my faith means you can’t just live comfortably while ignoring such suffering. That’s how I started Poverty Stops Here. But very quickly I realized something was wrong. 

The model was flawed. It was based on asking, essentially begging others for money to help people in need. That approach can work for a disaster or a short-term emergency, but as a development model, it wasn’t sustainable. 

And even beyond the model, the impact was limited. We weren’t really solving the problems. The more I combined those two realizations that the model was broken, and the impact muted the harder it became to keep going. 

I ran the organization for about ten years with the help of incredible volunteers, many of them from my church. But eventually, I knew I needed a different path. That’s when I applied to business school, landed at Harvard, and met Professor Clayton Christensen.

Clay completely reshaped how I think and how I see the world. He made me believe that Africa can truly become prosperous not through charity, but through innovation. Not just any innovation, but what we call market-creating innovations. These are the toughest to build, often the most unlikely, and the ones many don’t believe are possible. But they are the key to lasting prosperity. 

Shega: Let’s go back to Poverty Stops Here. What was the turning point for you in realizing charity alone wasn’t enough? 

Efosa : In the beginning of Poverty Stops Here, there was a lot of passion. Passion is crucial if you want to accomplish anything meaningful, but passion alone led me to make decisions that weren’t always wise. When you’re fueled by so much enthusiasm, it can override sound judgment.

At the time, I didn’t have answers to relatively simple questions. If you build a well in a community, who owns it? Who fixes it when it breaks? Because it will break. Things always break. Roads get potholes, pipes leak, machines wear down. That’s life.

I didn’t have an answer. Driven by passion, I thought, we’ll cross that bridge when we get there. The need was so urgent, we had to act. And when you’re blinded by need and fueled by passion, you can make decisions that feel right but fall short of being the most effective. Nobody criticizes you for spending your money to help others, but that doesn’t mean it’s the smartest approach.

Even from the start, I had questions I couldn’t answer. Over time, reality forced me to confront them. We built wells that broke, and we couldn’t fix them. We raised more money, built another, and it broke too. Those experiences eventually outweighed passion. I couldn’t keep making the same choices without facing the hard questions.

So, we stopped building wells because we had no mechanism to maintain them. We shifted to microloans, which were more manageable, and did some work in primary education. Even then, it took five or six years before I realized this wasn’t a sustainable path. It wasn’t a single moment of clarity, it was a gradual process.

In hindsight, I’m grateful it happened. If the wells hadn’t broken, maybe I would have kept going, convinced this was the right approach to development. Some organizations raise tens of millions for similar efforts, yet success in fundraising can blind you to the failure of the underlying model.

If you compare the time spent raising money and building projects with the actual impact achieved, it often isn’t worth it. There’s a better way. Because the wells broke and the impact was limited, we were forced to confront reality. Had we raised $100 million and built wells everywhere, we might never have realized it.

That’s why I emphasize both the model and the impact. Take USAID, for example. In some ways, it has been hollowed out. When U.S. support shifts, several African health systems are left reeling. The problem is the same: a model built on dependence. The minute the donor pulls back, the system collapses, no matter how strong the initial impact appeared.

That’s why I struggled with aid-driven models. Even if the impact had been greater, the model itself wasn’t sustainable. With innovation and entrepreneurship, however, you can build systems where both the model and the impact work and that, I believe, is the way forward.

Shega: In The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty, you describe market-creating innovation as distinct from traditional interventions, often starting with what you call “non-consumption.” Could you explain this in practical terms and give examples of products that have turned non-consumers into new markets?

Efosa : Sure. I was fortunate to attend business school, where I met Clay and took his course, Building and Sustaining a Successful Enterprise. It introduced theories that help managers make better decisions, and I realized these ideas could unlock many answers to the development puzzle.

After graduating, I secured a research position with Clay. Soon after, he mentioned wanting to co-author a book but had not found the right collaborator. That became the foundation for The Prosperity Paradox. One of Clay’s greatest lessons is that he teaches you how to think, not what to think. At the Christensen Institute, we follow the same philosophy: we don’t hand out ready-made answers; we help people ask the right questions to discover solutions in their own contexts.

In the book, we describe market-creating innovations that transform complex, expensive products into simple, affordable ones, allowing millions more to access them. In other words, they turn non-consumers into consumers.

Non-consumers are people who would benefit from a product or service but cannot access it due to cost, availability, or usability. Life is a series of struggles: you either consume something to overcome it or you don’t. If you consume, the economy records that activity; if not, it rarely does.

GDP, our standard measure of economic output, is largely driven by consumption. But consumption matters not just for growth it helps people solve everyday problems. For example, if you felt lightheaded after this interview, taking Panadol or Tylenol is consumption at work.

In Africa, most people are non-consumers or under-consumers. They face struggles they cannot solve through the market. They fall ill and have to wait or pray because they lack access to insurance, medicine, or credit. Africa is swimming in a sea of non-consumption.

Consider mobile phones. 25 years ago, widespread mobile use across the continent seemed impossible. Today, it is universal. That is the power of market-creating innovation.

To make such innovations succeed, several factors are critical. The first is focus: rather than trying to solve every problem at once, it is essential to target a specific struggle. Effective solutions must also address the barriers that prevent people from consuming a product or service in the first place. Beyond the product itself, innovators need to account for the wider ecosystem, including infrastructure, a skilled workforce, and constructive relationships with government. Finally, they must approach the challenge from the consumer’s perspective, weighing not only cost but also time, convenience, and the learning curve involved.

This approach differs from designing a new gadget. It is about building solutions that make sense in the context where producers and consumers live. It is hard, especially in a continent where even serving existing consumers is challenging, but it is essential.

Shega: Africa has a large non-consumer population, and much of the economy is dominated by rural agricultural labor. In Ethiopia, about 64 percent of the labor force works in agriculture. At the recent Kifiya event where we met, we learned about their efforts to build an AI-based credit scoring system to support small businesses and smallholder farmers. My question is: what do market-creating innovations look like in economies dominated by agriculture? 

Efosa: The starting point should always be the struggle, not the technology. In Ethiopia, for example, there is limited access to mechanization and basic inputs that could raise productivity. For the average Ethiopian household, food can account for roughly 50 percent of income. In contrast, in the United States, that figure is closer to 10 or 11 percent. That gap shows the scale of the challenge.

When you start with the struggle food, you quickly see that this is not just a farming problem. Credit access for farmers is critical, and Kifiya’s AI-based scoring system is valuable here. Technology and advanced data tools can extend credit to people often overlooked by the financial system. Credit matters because it converts capital and trust into productive economic activity. But credit alone is not enough.

If the goal is to increase food consumption, you must consider the entire system. How does food get from farms to households? Are there reliable roads? Skilled engineers to build and maintain infrastructure? Warehouses and logistics networks to prevent spoilage? Without these, even farmers with credit may never reach consumers. Market-creating innovation requires this holistic approach.

A good example is EthioChicken. The company has increased chicken and egg consumption in Ethiopia by building an end-to-end value chain. They support smallholder farmers, manage offtake, and distribute products widely, improving nutrition and health outcomes. In contrast, a company focused only on exporting frozen chicken follows a production-driven model. EthioChicken’s consumption-driven approach serves domestic non-consumers and makes food more affordable.

Kifiya is solving one critical piece of this puzzle by expanding credit access for small farmers. But without infrastructure and logistics, credit alone cannot unlock consumption. That is why holistic thinking is essential.

Shega: You’ve spoken about the importance of patient capital, infrastructure, and policy. But in practical terms, do Ethiopia or other African countries have the governments, capital, and investors required to increase consumption?

Efosa: Too often, we frame governments only as obstacles corrupt, inefficient, or restrictive. I see it differently. Many African governments are trying to lead countries that are severely under-resourced. If you look at revenue per person, it is strikingly low.

In such conditions, human nature takes over. When resources are scarce, people tend to prioritize themselves and their families. Many officials act based on self-interest, and it is difficult to expect otherwise. That is why innovators must ask: how can I align my work so a government official sees it in their immediate interest to cooperate? Not abstractly, for the Ethiopian people or the economy, but for their own personal stake.

This mindset is uncomfortable for many, who argue governments should simply do their jobs. But reality does not always work that way. It’s like facing a serious illness: you can insist it’s unfair, or you can take the treatment available. In Africa, we spend too much time saying what governments should do and not enough asking how to align their interests with ours.

Of course, you won’t succeed with every government, maybe not even most. But when innovators approach governments with alignment in mind, they are more likely to succeed than we are today. And right now, we are not succeeding.

Africa’s economic record underscores this: GDP per capita has barely improved across the continent in 30 years. That is deeply troubling and shows that current approaches are not working. We need to do things differently.

Shega: Back to your book, the Celtel story of airtime-by-the-minute is a favorite. What can emerging economists in Africa, including Ethiopia, learn from such examples about designing products that fit local realities?

Efosa : The Celtel airtime story is a classic example of market-creating innovation. Twenty-five years ago, most mobile phone plans in Africa copied Western models: fixed monthly payments of $20–$50, which excluded the majority of people. Mo Ibrahim, Celtel’s founder, focused on the struggle how to make mobile phones accessible to non-consumers.

He introduced scratch cards, allowing users to pay only for the minutes they actually used, even by the second. For distribution, he leveraged local habits, selling through roadside vendors rather than formal retail. 

Celtel also built a full ecosystem: engineers, customer service, and even clinics for staff. This shows that market-creating innovation is about more than the product; it’s about the system, the people it serves, and the local context.

For tech founders today, the lesson is clear: connect technology to real struggles, go beyond your expertise if needed, and don’t rely solely on government infrastructure. Align with governments where possible but take ownership of building solutions that Africans can actually use and benefit from. Market-creating innovation is hard, but it can transform lives.

Shega: You worked closely with the late Professor Christensen. What’s the most important lesson you took from him?

Efosa : When Clay passed away, I received countless messages of gratitude and condolences from people around the world. That experience crystallized the most important lesson he taught me: in life, the greatest purpose is helping others become better people.

We are all on a journey. For some, life can feel meaningless; for others, it is everything. Wherever we find ourselves, we are navigating this journey together, and our impact is measured not just by what we achieve, but by the growth we inspire in those around us.