Last month on this site, we profiled the prolific work of Professor Ethan Kapstein and his quest to tell the story of business’ contribution to development through hard data. For all those who have worked in this field for a while, and who have come to crave more than anecdotes and stories, the significance of this will be immediately apparent. While there remains debate over the relative strengths of the different approaches to measuring impact (still summed up best in this note by Caroline Ashley, who now works on these issues over at the Business Innovation Facility), there is real strength in the clarity of Kapstein’s work.
In his latest report, published today, Kapstein explores the impact of SABMiller in Ghana. The headline of his analysis is that Accra Brewery Ltd (ABL) – the subsidiary of the African-originated, multinational brewer – contributes directly and indirectly around US$117m value add to the local economy (0.4% of GDP), including US$46 million in tax (1.1% of the country’s total tax income). This value add is nearly 80 times the amount ActionAid claims SABMiller avoids in annual tax bills, and helps keep that discussion in perspective (I have blogged on that topic elsewhere).
Kapstein also finds that ABL supports at least 17,600 jobs throughout the economy – around 0.2% of the total labour force – in addition to providing a secure livelihood to local farmers through guaranteed prices for raw materials. In an interesting counter-factual, Kapstein estimates the loss to the economy if SABMiller were to import the raw materials that it currently sources locally: a loss of US$22m in value added and 5,100 in lost jobs.
As with all of his reports, Kapstein says that the purpose is to “enable both the company’s management and its many stakeholders to analyse the broad socio-economic impacts of its business decisions and to discuss these decisions based on facts and a realistic interpretation of them”. He has some ideas of his own for how the business and government could further increase the positive impact of ABI, and business more generally. For business, he calls for an increase in local agriculture sourcing, and for government, he calls for policies that promote a conducive investment climate.