?Seeing the fizz in the WEF
MGAfrica.com deputy editor Lee Mwiti caught up with Coca-Cola’s president for EuroAsia and Africa, Nathan Kalumbu, at the World Economic Forum (WEF) for an expert view of the African continent, and how his firm is sizing it all up.
M&G Africa: Does the WEF still have fizz?
NK: I think it is a very important forum for getting private sector, civil society and governments in one place to talk about an important subject, which is Africa’s future and how we can accelerate the growth of this great continent. There is a lot of sharing of ideas that comes in, and a lot of insights from what other companies are doing, what governments are doing, what civil society is doing, and then try to cross-pollinate ideas and figure out how other people are solving the problems they face, and also figuring out opportunities. I am glad WEF operates in this regional way, because it allows for focus and brings together the relevant players who make things happen on the continent.
M&G Africa: What new consumption trends are you seeing across Africa?
NK: The biggest is the consumption trend of choice. As people earn more money, they demand different products and as companies we need to be very sensitive to that dynamic. As African consumers are getting more and more wealthy, as they are getting more educated, they are demanding more and more choice.
The other dynamic we are seeing is the impact of social media. This is really changing the way we communicate with consumers. It is a growing phenomenon that is changing the way we go to market, and how we interact with consumers.
M&G Africa: Talking of millennials and the youth bulge, there is the continent’s population boom. How is Coca-Cola anticipating this?
NK: Africa’s population is growing at an average of 2% every year. We are the youngest continent in the world. By 2050 we will have the largest young population in the world.
That’s huge potential for the continent, it is the real strength of Africa, the biggest resource we have. We all need to figure out how we promote their prosperity, especially in the area of employment. There aree 10 to 12 million young people who enter the job market in Africa every year, while jobs that are created for them are six to seven million. The gap creates significant social pressures.
M&G Africa: What are the main challenges that Coca-Cola has encountered operating across the region?
NK: The infrastructure deficit in Africa is significant. But this is improving, though we are still far behind. I have seen estimates that we need to invest double what we are investing today to cover the infrastructural challenge — roads, rail, bridges, communications — and help reduce poverty and firms’ operational costs.
The other area is electricity. You can imagine the impact of improving electricity availability across Africa in the informal sector, and in reducing the cost of doing business. These in my view are the biggest factors.Let me also highlight that sometimes governments across Africa are focusing too much on existing sources of raising revenue instead of focusing on broadening the tax base.
We need to enable existing companies, current contributors to government fiscus to contribute more through growth, rather than through more taxes.