Thursday, September 22, 2011

Cassava Beer, Nigerian Guinness, and Western Companies

This first appeared on "Africa in Transition."

The day before last, I attended an on-the-record discussion with two African heads of state here at the CFR. One talking point was a pitch for foreign investment in their countries. This brings us back to the debate over “Africa’s untapped potential,” and the costs and benefits of doing business on the continent. Responding to a previous posting on this topic, a blog reader commented tongue-in-cheek “Africa may not be a ready market for Western businesses because the West produces mainly higher added value products. But from where I type in Enugu, Nigeria, it is a goldmine for Chinese and Indian manufacturers,” whose products are much cheaper.

A recent Financial Times article suggests that Africa is, indeed, ready for products produced by Western companies—and that they should be thinking hard about ways to make their businesses on the continent work. The author quotes NestlĂ©’s head of emerging markets that there are three hundred million to four hundred people in Africa who can already afford his companies products, and within a few years that could increase to six hundred million.

The many challenges of doing business in Africa—underdeveloped infrastructure and supply networks, political and financial constraints, not enough skilled workers—do not lend themselves to conventional business models. However, motivated companies have begun to find innovative solutions.

Food and drink companies that already have significant operations in Africa–Heineken, Nestle, Unilever, SABMiller, and Diageo (Guinness)—for example, are overcoming sourcing problems by purchasing from local farmers and, in exchange, providing training and a guaranteed price for the finished product. In some cases, the company will also provide seeds, fertilizers and even microfinance.
SABMiller is trying to create new products with locally available crops. For example, the company is using locally produced cassava in beer that will sell for seventy percent less than other types. Nestle has responded to supply network and transport issues by setting up smaller and cheaper “finishing” factories close to customers, which gives Nestle the flexibility to increase production when demand rises.

Who knows? Perhaps we will see cassava beer on the shelves in the United States before too long—or even Nigerian-brewed Guinness, which I’ve heard has acquired something of a cult following in the UK

Thursday, September 15, 2011

Dalai Lama Visa Issues for Desmond Tutu’s Eightieth?

This first appeared on John Campbell's "Africa in Transition."
The Dalai Lama has applied for a South Africa visa to attend iconic anti-apartheid activist and preeminent religious leader archbishop Desmond Tutu’s eightieth birthday celebration on October 7. Denying him a visa, as the South African government did in 2009 to avoid offending China, would likely generate unwanted negative attention. It would be another incident among a series of controversial actions that have generated harmful domestic and international press, such as President Jacob Zuma’s contentious appointment of Mogoeng Mogoeng as Supreme Court chief justice and his government’s opposition to the Libyan transitional government as well as ANC youth league leader Julius Malema’s inflammatory comments on overthrowing the Botswana government, land redistribution, mine nationalization, and “economic war” on whites.
Already, public government comments have raised uncertainty about his visa and attracted media attention, prompting Archbishop Tutu to comment:
“I mean it’s so sad to think that we have had a kind of experience of repression that we have had, in that we should want to kowtow to a hugely repressive regime that can dictate to us about freedom and things of that kind.”
Further, the Dalai Lama is not, at least publicly, seeking a meeting with representatives of the South Africa government. He is no longer head of the Tibetan government in exile, though, like Archbishop Tutu, he has enormous moral authority.

Wednesday, September 14, 2011

Zuma's Opposition to the Libyan NTC

This first appeared on John Campbell's "Africa in Transition."

The day before an African Union meeting in Pretoria to discuss Libya, Zuma reminded the South African National Assembly that the AU does not recognize the Libyan transitional government, despite the fact that Qaddafi is gone. These statements are part of what has been Zuma’s consistent opposition to intervention in Libya, including the NATO airstrikes and unfreezing Libyan assets for the NTC. (South Africa ultimately agreed to the later, but only after pressure).

This is curious given that twenty African governments have recognized the NTC, including, Nigeria, Ghana, Ethiopia, and even Sudan. Or maybe not all that curious.

South Africa commentator Greg Mills explains Zuma’s quixotic stance, one that, as some commentators have noted, risks undermining South African credibility and effectiveness as a regional leader on foreign policy. Mills identifies six “drivers”: “a visceral rejection of external involvement,” which, he notes, likely has a racial dimension considering NATO’s role in Qaddafi’s fall; that South Africa is trying to reestablish its “radical credentials,” which were damaged by South Africa’s initial support for the UN resolution that brought NATO into the fray. This approach, Mills argues, is a low cost way of doing so, at least domestically. (Internationally, South Africa has likely diminished its political capital).
Mills’ third driver is the impact of the Israel-Palestinian conflict on South Africa’s Middle East policy, and its perceived similarities in South Africa with apartheid. Number four is “a predilection to replicate the South Africa negotiated solution,” which Mill’s argues the success of has been “distorted and mythologized”; and number 5 is the “misplaced notion” of a global power shift east.”

Finally, and perhaps most damningly, is Qaddafi’s proclivity for “spraying money around the continent and at its politicians,” implying that at least some of the former Libyan leader’s support has been purchased.

Read his article here.

Monday, September 12, 2011

Boko Haram, International Terrorism, and the Obama Administration

This first appeared on John Campbell's "Africa in Transition."
John Campbell has a piece today on where he discusses Boko Haram, that shadowy Islamic terrorist group based in northern Nigeria that has claimed responsibility for the UN headquarters bombing in Abuja two weeks ago. As he argued in previous blog posts, a security centric solution, particularly when implemented by a poorly trained and trigger happy military and police insensitive to civilians, does not address the conditions that motivate Boko Haram. Instead, political solutions that reduce northern alienation are needed. The United States should encourage the Nigerian government to reach out to the North while deepening its own ties to the North by means such as opening a consulate in Kano.

Read the whole oped here.

In another recent oped, Nigeria expert Jean Herskovits raises questions about the credibility of Boko Haram’s claim of responsibility for the bombing and argues that close association with the Jonathan administration could actually lead to stronger ties between Boko Haram and international terrorist groups, which are currently weak at most. Read her oped here.

More indepth background on Boko Haram can be found via CFR  here and the International Crisis Group here.