A long-established African firm went global, only to find the fastest-growing market was on its doorstep ... ON A Friday evening in Onitsha, as the beer market is closing, a man carefully straps six cases of Hero lager and two cases of Pepsi to the pannier of his moped. Another rolls away his purchases by wheelbarrow. Coaches parked nearby will soon be filled with day-trippers and their cases of booze. Each day a vast quantity of beer is sold from this closely packed warren of stores. It is part of a sprawl of specialist markets in the city, a commercial hub on the Niger river, which draws in traders from across southern Nigeria. ... It was the bustle of Onitsha that persuaded SABMiller, the world’s second-largest beer company, to set up a brewery here. The market takes a slice of SAB’s local production and sells it on to small traders who are otherwise hard to reach. The company had been late in coming to Nigeria. First it acquired a rundown brewery in Port Harcourt in 2009 and then another in Ilesha before it built a brand-new plant in Onitsha in 2012. Already, its capacity is being increased, to slake locals’ ever-growing thirst. ... What might other consumer firms looking to Africa learn from SAB? It is not an easy place to do business and the results are not uniform. Lager sales are booming in Nigeria and Ghana but shrinking in Zimbabwe and South Sudan. And there are few reliable sources of business information: firms have to learn as they go along. ... South African businessfolk have a phrase for it: paying your school fees.
The world is about to experience an unprecedented consumption boom, which presents both challenges and opportunities for investors everywhere. Animal protein consumption, energy, air travel, health care, and education are some of the most relevant sectors involved as the upcoming changes in population and income collide. ... The world in general—and India in particular— is in the midst of a fascinating transition right now. Taking a step back from our day-to-day focus to view the bigger picture can offer a different perspective on the dynamics of various countries in a volatile and uncertain world. Envision a map that is drawn to represent how economists view the world. Imagine a map on which the area occupied by a country as a percentage of total area is equivalent to its percentage of global GDP. Compared with traditional maps, in which country sizes are based on land area, the United States, Europe, and definitely Japan would appear bloated. Other regions would look smaller—for example, Africa or India. Africa especially is quite difficult to see on the economists’ map. ... Now, imagine another map on which land area is proportionate to the country’s percentage of the global population. If the United States is viewed this way, it will be much smaller than on the economists’ map. In the population map, Africa would become relevant and uncertainties about the importance of India and China would disappear. Focusing on the differences in these maps may permit us to realize our biases in viewing the world.
It’s been six years since we first wrote about the coming G-Zero world—a world with no global leader. The underlying shifts in the geopolitical environment have been clear: a US with less interest in assuming leadership responsibilities; US allies, particularly in Europe, that are weaker and looking to hedge bets on US intentions; and two frenemies, Russia and China, seeking to assert themselves as (limited) alternatives to the US—Russia primarily on the security front in its extended backyard, and China primarily on the economic front regionally, and, increasingly, globally. ... These trends have accelerated with the populist revolt against “globalism”—first in the Middle East, then in Europe, and now in the US. Through 2016, you could see the G-Zero picking up speed ... with the shock election of Donald Trump as president of the US, the G-Zero world is now fully upon us.
1. Independent America: Trump rejects the comparative weakness of the presidency, and he wants to more directly project American power in service of US national interests
2. China overreacts: Xi will be extremely sensitive to external challenges to his country’s interests at a time when all eyes are on his leadership
3. A weaker Merkel: Could the Europeans have resolved their financial crises without the Germans forcing a solution?
4. No reform: The reform needle won’t move in 2017. Save for a few bright spots, money won’t know where to flow
5. Technology and the Middle East: Technology, a force for economic growth and efficiency, also exacerbates political instability
6. Central banks get political: In the US, there’s risk of an open conflict between the Federal Reserve and the White House
7. The White House versus Silicon Valley: Technology leaders from California, the major state that voted in largest numbers against Trump in the election, have a bone to pick with the new president
8. Turkey: Ever-fewer checks on executive power will leave the private sector vulnerable to political whims
9. North Korea: It’s making consistent progress on an intercontinental ballistic missile capability that would allow it to hit the West Coast of the US with a nuclear weapon
10. South Africa: South Africa’s political infighting will undermine the country’s traditional role as a force for regional security
Red Herrings: US domestic policy, India versus Pakistan, Brazil