High hopes for Africa
“Population growth plus GDP growth plus political stability equals an almost limitless rise in beer consumption.” For several years now, international brewers have used this simple yet memorable equation to sweet-talk analysts into believing that their investments in Africa would pay off and lucratively so. One word conspicuously absent from brewers’ soft soap has been “risk”. Heineken, SABMiller and Diageo, through words and deeds, have certainly succeeded in giving Africa a good reputation. But does this mean that the so-called “risks” in investing in Africa are more perception (read prejudice) than reality? Yet, what if risks become fact and affect industries adversely? Do these industries only have themselves to blame – like the extractors, notorious for their disregard of local concerns and the environmental impact of their commercial decisions? It would be foolish to downplay political risks in Africa. In their wider sense they range from worker strikes and sudden changes in taxation to recent events in Mali and Algeria. Political risks don’t discriminate. They just affect businesses in different ways.
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