• Abstract and Figures
• Public Full-text

AFrica INVEstMENT SUMMIT 2012 Cape Town’s business district lights up as dusk falls over the city, November 2, 2009. REUTERS/MIKE HUTCHINGS Reuters Africa Investment Summit 2012 gives insight into continent poised for development Africa has the potential, but is it ready for a business boom? ome to a billion people, dozens of fast-grow- the continent, counting on the growing trade flows ing economies and an emerging middle class, between Asia and resource-rich Africa. While the Hthe world’s poorest continent is increasingly stakes are huge, so are the challenges: the increasing seen as the next big destination for global investment. trend of resource nationalism, a lack of infrastructure After a decade of relative stability in many sub-Sa- and adequate power supply, a shortage of skilled la- haran countries, investors and major multi-nationals bour and, in many countries, an entrenched culture of are betting big on the rise of the African consumer. graft. During closed sessions with Reuters journalists, Rapid growth is also attracting more private equity government officials, leading CEOs and senior ex- firms, including major U.S. heavyweights. Western ecutives discussed these issues, the opportunities and investment banks are angling to do more deals on challenges facing investors in Africa. 1 AFRICA INVESTMENT SUMMIT 2012 Workers package beer at Cervejas de Mocambique, a subsidiary of giant SAB Miller, in Maputo, March 17, 2009. REUTERS/GRANT LEE NEUENBURG SABMiller eyes $2.5 billion in Africa investment BY TIISETSO MOTSOENENG AND est growing, with underlying volumes in the mercial beer consumption per capita could TEBOGO MAHLAELA last three months of 2011 up 11 percent. reach as much as 30 liters over the next 15 JOHANNESBURG, APRIL 16, 2012 Bowman said the London-based brewer, to 20 years in most of its markets in Africa which is also listed in Johannesburg, will use outside South Africa. ABMiller plans to invest up to $2.5 bil- the money to build two to three breweries The world’s second biggest brewer is lion in Africa over the next five years to each year across the continent, where some ratcheting up production of affordable beer Sbuild and revamp breweries, its head for breweries are running at or near full capacity. by using local ingredients such as cassava the region, as it looks to slake rising demand Africa is home to a billion people and, af- and sorghum instead of the more expensive for beer in the fast-growing continent. ter a decade of relative political stability, doz- barley to drive growth. “We are still looking at around 400 to ens of fast-growing economies. Although SABMiller launched the first cassava- 500 million dollars a year ... for the next still poor, it is increasingly seen as the next based beer late last year in Mozambique, three to five years,” Mark Bowman, SAB- big growth market for consumer goods. an affordable beer blend that fetches up to Miller’s managing director for Africa told But average beer consumption, at 8 liters 70 percent of the price of mainstream beer, the Reuters Africa Investment Summit. per person per year, pales when compared thanks to lower taxes. “There’s quite an attractive growth in with about 70 in North America or Europe, “Commercial beer signifies reaching markets outside South Africa so we will be suggesting that few Africans can afford the some sort of level of status as opposed to investing basically to meet and be ahead of beverage, which is seen as a status symbol. drinking a home-brewed beer like chibu- demand,” he said in an interview at Reuters Bowman said if one includes the home ku,” Bowman told the Summit, referring to offices in Johannesburg. brew market -- where the beverage is cheap- a popular sorghum-based brew. SABMiller’s Africa business, which ex- er -- beer consumption on the continent is cludes South Africa, is the group’s biggest just as big as in other developed markets. Additional reporting by Enos Phosa; Editing recipient of capital expenditure and its fast- He said with affordable prices, com- by David Dolan and Jon Loades-Carter 2 AFRICA INVESTMENT SUMMIT 2012 Africa’s demographics: dividend or disaster? BY ED STODDARD “The idea that because there are expand- rica and what we want to do is go down JOHANNESBURG, APRIL 18, 2012 ing consumer markets or more mobile and meet it earlier as opposed to waiting phones in Africa and more people waltzing for it because beer is just too expensive, on anted: Investors for young, hot around in Armani suits, that this is some- balance,” he said. and thirsty continent. Popula- how going to drive the economies out of “So if you can get beer down to a Latin Wtion to double in 40 years. Poor, poverty, is pure fatuous nonsense,” he said. American type earning profile where with- but less than it was. Interested parties must But retailers are not discouraged and Actis in 30 minutes of work you have enough think long term. sees pent up consumer desires to be tapped. money to buy a beer, from the 3 to 4 hours Africa’s demographic profile could make “If you look at Nigeria for example, a so- it takes currently, we would significantly in- it a dream for retailers if spending power phisticated retail model there is actually non- crease the opportunity for our sales.” continues to rise - or an unfolding disaster existent. The bulk of trade still happens in But the big worry is those who cannot for everyone if the labor market fails to ab- informal markets,” he said. “But as people be- afford to buy any sort of drink as youth sorb its swelling ranks of young people. come more affluent they become aspirational.” unemployment rises in many parts of the Top business executives at the Reuters continent, fuelling resentment against the Africa Investment summit see potential. The idea that because there expanding elites and potential social unrest. They expect ever higher numbers of child- are expanding consumer markets “Youth underemployment and unem- less young people to enter the labor market or more mobile phones in Africa ployment is a major source of concern to and earn money that they can spend or save. our government,” Zimbabwe’s youth min- The latest U.N. figures project that Africa’s and more people waltzing ister, Saviour Kasukuwere, told the summit population will double over the next four de- around in Armani suits, that this in Johannesburg. cades to almost 2 billion. To give just one ex- is somehow going to drive the “If you have young people who are rest- ample, 46 percent of Zambians are below 15. economies out of poverty, is pure less and they have nothing to occupy them “We are going to benefit from a demo- fatuous nonsense then the sure way will be the Egyptian kind graphic dividend. You are going to have this of uprising,” he said, referring to the upris- significant increase in consumers,” said John Author Duncan Clarke ing that toppled President Hosni Mubarak van Wyk, who co-heads the Africa business last year. of private equity firm Actis, which has $1.5 That was also the watchword for Mark There has been no sign yet of North Afri- billion under management in Africa. Bowman, brewer SABMiller’s managing can style revolts spreading south of the Sahara. A 2010 study by the McKinsey Global director for Africa. And Zimbabwe is a particular case af- Institute projected the number of Afri- SABMiller’s Africa business, not count- ter losing more than a decade of growth can households with discretionary income ing South Africa, is the group’s fastest to what detractors say were disastrous eco- earning over $5,000 would rise to 128 mil- growing. Underlying volumes in the last nomic policies. lion by 2020 from 85 million. three months of 2011 were up 11 percent But Zimbabwe’s demography is not Credit Suisse estimates African household on the year before. unique to the continent. According to the wealth grew at 19 percent in 2010-2011 - “Beer is highly aspirational. As the World Bank, about 40 percent of its popula- outpaced only by India and Latin America. economies improve and the legal drinking tion is below the age of 15 and estimates of its Some argue that hype around Africa is populations grow the prospects are very unemployment rate run as high as 80 percent. overdone and that concentrating on the big positive for beer and soft drinks,” he said. “In 1900 there were only 110 million macroeconomic numbers gives a mislead- SABMiller plans to invest up to $2.5 people in Africa, now there are over a bil- ing picture on a continent where most trade billion in Africa over the next 5 years. lion. In 2050 Africa is going to have 2 bil- remains informal. The strategy with Africa’s income lev- lion. So there will still be huge problems of “(It) doesn’t tell you about the peas- els and demographics, he said, was simple: poverty, of income scarcity, and most im- ants, it doesn’t tell you about the urban make beer affordable by cutting the price. portantly of unemployment,” said Clarke. slums,” author Duncan Clarke told Re- “You have this natural increase in wealth uters this month. slowly but surely and inexorably across Af- Editing by Matthew Tostevin 3 AFRICA INVESTMENT SUMMIT 2012 Zimbabwe’s “Tyson” goes the distance with foreign firms BY MacDONALD DZIRUtwE AND DaVID DOLAN His reputation for being tough on for- HARARE/JOHANNESBURG, APRIL 16, 2012 eign firms was burnished by a public spat with Implats CEO David Brown, which icknamed “Tyson”, Zimbabwe Em- dragged on for months.

Load more

  17

Copy Link