Why are so many companies getting their fingers burnt in Africa?

Corporate Affairs
Why your Corporate Affairs Agenda is Critical for Business Success in Africa

A couple years ago McKinsey’s ‘Lions on the Move’ report about the progress and potential of African economies was the prevailing view. However, is this reality or a pipe dream? So many companies have moved into the Continent and yet so many have had their fingers burnt. Our view is that those who have stumbled have done so because their only objective is profit and they do not have a Corporate Affairs agenda front and centre of their organisation.

Having worked at SABMiller for many years we have seen how a growth strategy premised on shared value makes the difference between success and failure in Africa.

Graham Mackay, the driving force behind SAB’s expansion strategy, said at the World Economic Forum: “If there was more of Africa, we would be investing in it.” SAB and then SABMiller saw phenomenal growth in Africa and the secret to this success was the full integration – across the entire value chain – of shared value philosophies. They understood that everything they did, including their purchasing decisions, had an economic, social and environmental impact that stretched around the world.

This strategic decision, which took some doing to implement, gained the Group inestimable reputational capital which opened doors for them and enabled efficient lobbying and partnerships with governments, civil society and local communities. In so doing they were able to successfully address the challenges associated with multi-currency operations and rigorous tax landscapes, working capital, complex inventories and long supply chains linked to multi-modal shipments as well as the regulatory headwinds around liquor legislation.

By making their Corporate Affairs agenda central to their business model they became the partner of choice in the countries in which they operated. Where many companies have struggled with all the teething issues linked to creating a footprint in Africa, SABMiller was effectively structured for growth and all stakeholders benefited from this.

Shared Value principles aren’t new, but many companies are still stuck in the philanthropic paradigm implementing ‘tick box’ CSI initiatives rather than embedding a positive social impact ethos alongside their business strategy.

Africa Value Consulting can help you on this journey and give you the benefit of the legacy and learnings from the SABMiller success story. Let us help you drive growth in Africa through shared value.

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