Unilever does good business in Africa. It manufactures in 18 African countries and sells a range of products in home and personal care and foods across the continent, generating a turnover of some €2bn a year. The African presence has been established over time, with Lever Brothers having first started to supply soap to South Africa more than 100 years ago. But strategic decisions made year-on-year as a competitive international company are not cast in historical precedent – they are influenced by what is happening on the ground in Africa and by the prospects that it is generating for itself.
So the steps being made across Africa to deliver increased economic growth should be applauded. There is no doubt that this is the most sustainable way of lifting the poor out of poverty. And it can only be done effectively by involving the private sector, with governments providing clear parameters for private enterprise, namely an open, fair and accountable regulatory environment.
Level playing field
This is, of course, easier to describe than to deliver, and even some developed countries do not manage it very well. But the greater the challenges, the more important it is that the essential principles are held onto. No one needs reminding of the downside of when things go wrong.
Two of Unilever’s African country business operations, for example, have suffered in recent times as the system for proper accountable trade has come under serious threat. This has damaged business but, even more so, the livelihoods of the people living in that country triggering wider socio-economic consequences for the sub-region.
Fortunately, however, such examples are not now the norm in Africa. Increasingly we find professional competence at the heart of African governments and institutions, underpinned by an understanding of what is required to thrive in a globalised marketplace. Measures to share best practice across governments, such as the African Peer Review Mechanism, further build confidence that African countries can be better and more accountably managed.
Identifying what needs doing is not the same as doing it. It is a significant that the days of business, government and civil society all pursuing different visions of society seem to be over.
Business has a role within civil society. Unilever has a large social as well as economic footprint in Africa. It employs 40,000 people across the continent, providing economic livelihoods for many more times that number through its extensive local supply and distribution chains. The customer base is the population at large.
Unilever has always sought to build up local managerial capacity (over 90% of the 1000 managers on the continent are African) and it has worked with a range of non-governmental organisations, the United Nations and community partners to deliver wider developmental benefits.
But 2006 presents a particular opportunity. Last year, attention was focused on Africa through the Commission for Africa report and the G8 Summit in Gleneagles which led to commitments on debt relief and increased aid. Business too responded, with the formation of Business Action for Africa (www.businessactionforafrica.org), which is now pursuing practical work-streams under the six headings of: governance, investment climate, human development, trade promotion, enterprise promotion, and positive perceptions.
Regional trade zones
These are all important, but to the banking community the promotion of the investment climate may resonate most strongly. This is part regulatory and part trade promotion. Unilever welcomes the steps African governments are taking to create regional trade zones. This has to be a key driver of growth and complementary to support for developments on the widerWorld Trade Organisation front. Unilever is one of the lead companies to sign up to the Investment Climate Facility, a public-private partnership under the auspices of the New Partnership for Africa’s Development (NEPAD), which aims to provide practical ways of improving the conditions for doing business.
These actions by governments, development partners, business and banking can help shift the emphasis from poverty alleviation to wealth creation, from aid and charity to the provision of jobs and sustainable development. It is a vital process. In Africa, every job has extra value in terms of its indirect support to the wider family and community.
Patrick Cescau is CEO of Unilever.
