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rk Bowman, Managing Director, SABMiller Africa
Despite many of the gloomy predictions about how the financial crisis and global economic downturn will impact Africa’s development, we remain optimistic and excited by the potential of the region. Whilst the impacts of the downturn are being felt in different ways across different sectors and countries, there is now an overarching sense of forward momentum developing across the continent, evidenced by greater political stability, a strengthening investment climate and improving infrastructure.
Although we are undoubtedly experiencing difficult and uncertain times, it is critical that all those with a stake in Africa’s future continue to work hard to protect these hard won gains and continue to advance progress towards the MDGs. Business needs to continue to play a central role, especially at a time when local governments and development partners come under increasing domestic pressure. More than ever before, sustainable development will need to be at the heart of successful business.
Despite the economic uncertainty, we continue to explore new business opportunities and to invest in our communities for the long-term, albeit with a relentless focus on disciplined decision making. By focusing on core business fundamentals, we are better positioned to generate the most effective and sustainable contribution to Africa’s economic and social development. It is this approach that has enabled us to continue to build new capacity and expand our operations in Angola, Mozambique, Tanzania and South Sudan.
By maximising our business linkages in the countries where we do business we can create economic opportunity and improve livelihoods by sourcing from, distributing through or selling to small enterprises and farmers. We can also play a key role in transferring skills, technologies and standards along our value chains. Strengthening our local supply chain is becoming an increasingly important business priority for us, especially as we seek to mitigate against volatility in commodity prices by ensuring a more predictable and secure local source of supply of key raw materials like sorghum and barley.
We currently buy raw materials from around 12,000 smallholder farmers in Africa, but are exploring additional indigenous crops as raw materials for brewing which would allow us to increase our local sourcing to include much larger numbers. Trials are currently taking place with cassava, which will initially be introduced as an ingredient in Angolan beers, with longer term plans to extend its use in all countries where it grows successfully. Combined with new projects to grow sorghum and barley in countries such as Tanzania and Ghana, this will increase the number of local farmers to approximately 44,000 by 2012.
In some cases these linkages can be made viable in the short-term, in others funding, ongoing support and local capacity building will be required. A key challenge is how we continue to upscale our existing efforts in a difficult economic climate, especially in areas that require the provision of technical and financial assistance, and the fostering of innovation. Growing concerns over the impact of climate change adds a greater urgency.
Overcoming these challenges will require a new type of relationship with our development partners, built around deeper, longer-term and more strategic relationships and a greater willingness to share financial resources and the risks associated with entering relatively un-chartered territory. As a company with strong roots in Africa, we are familiar with managing these challenges and deeply committed to playing a leadership role in the region’s future.
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