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Africa Economic Summit - impact, resources and the growing middle class

10 May 2012

It's been an energetic few days here at the Africa Economic Summit in Addis Ababa, Ethiopia. It's the first time the meeting has been held in Addis, and the warmth of the welcome hasn't been dampened by the heavy rains of the first couple of days. One of the major events was the launch of Grow Africa, where presidents, prime ministers and agriculture ministers spent a whole day working with business leaders to encourage greater investment in African agriculture, with a particular focus on smallholder farmers. I was able to share SABMiller's experience of building a new supply chain with smallholder cassava farmers in Mozambique, creating the world's first lager based on the crop, and five months in already working with 1,000 farmers, with further expansion on the agenda. It's part of our growing commitment to local sourcing in Africa, through our Farming Better Futures programme.

SABMiller held a breakfast session with Business Action for Africa focused on measuring the impact that business has on development, including the importance of agricultural jobs. New research by Professor Ethan Kapstein of INSEAD business school revealed that SABMiller supports around 89,000 direct farming jobs in sub Saharan Africa (excluding South Africa), which in turn support further indirect rural jobs leading to a total of 317,000. As we expand our local sourcing through barley in Zambia, cassava in Southern Sudan and sorghum in Ghana, we will increase those numbers.   

One of the reasons increasing agricultural output is so important is the growing population and increasing wealth of Africa. The session on the growing African middle class discussed the difference between ‘spenders' and ‘strivers' - the former are relatively wealthy and have been buying major goods  such as cars for some time, whilst the latter group is growing rapidly and beginning to regularly purchase day to day branded consumer products for the first time. Coming to Addis also gave a me a chance to try one of those accessible branded consumer products in the form of Ambo, our bottled mineral water in Ethiopia, which has just been launched in a range of new fruit flavours - certainly welcome after a long session in the dark plenary room here.

The middle class in Africa is certainly a theme which will grow and grow - Kofi Annan spoke with clarity on the fact that this emerging group should not just think of themselves as consumers, but also as citizens, becoming more engaged in local governance on school boards, local councils and volunteering. There is, however, another very important challenge: we can't meet the needs of that middle class without dramatic improvements in addressing water stress and resource challenges.

That's where the work of the resource nexus - how water, food and energy supplies can be managed in a connected way to underpin growth - becomes so important. I was a guest speaker at the session on resource partnerships, where we discussed the Strategic Water Partners Network of South Africa, which SAB Pty Ltd leads with the Ministry of Water and Environmental Affairs. The Network already has a range of government agencies and major companies on board, and will focus on practical projects to improve water efficiency, reduce water leakage, improve water use in agriculture and ensure wastewater is properly treated. And all of that will only work if basic access to water is delivered for all.

Africa still faces a lot of poverty, but it's important that the perception of Africa also includes a sense of hope. I'm encouraged with a vision of Africa of growing consumer wealth, active citizens and improved environmental management - very different from the ‘Live Aid' pictures of Ethiopia which still dominates the perception for many people around the world.

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