Nestle, the world's biggest food group, said on Thursday it would invest 1 billion Swiss francs expanding capacity in Africa over the next two years.
Chief Executive Paul Bulcke made the comments at the opening of a 12 billion naira factory to produce Maggi seasoning cubes in the southwestern state of Ogun in Nigeria, sub-Saharan Africa's second-biggest economy.
"This latest investment is proof of our commitment to Africa in which we will invest 1 billion Swiss francs over the next two years," Bulcke said.
Nestle has operated in Nigeria for five decades. The new factory in Ogun is its 27th in Africa.
Several global brands in the fast-moving consumer goods sector have announced investment in Nigeria in recent weeks, including the world's largest Coke bottler Coca-Cola Hellenic (CCH) and British soap and shampoo maker PZ Cussons.
Cause Integration's Reaction:
Nestle's investment of $1 billion in Africa is noteworthy because of the demonstration of confidence in the growth of the developing African market. Africa is home to millions of impoverished individuals, with 80.5% of the sub-Saharan African population subsisting on less than $2.50 per day, based on 2008 statistics. A billion dollar investment such as Nestle's suggests that big business is showing an increased willingness to stake future profits on this area of the developing world that is desirous of capital in order to shore up much-needed basic services and provide infrastructure for health, education, food, water, and the empowerment of women.
As capitalism spreads to the African continent, my hope is that open markets lead to improved quality of life for citizens of the continent who subsist with so little and need support from private institutions to build the infrastructure to support that improved quality of life for Africa's more than one billion citizens. Much as the United States' investment in the interstate highway system led to economic growth for cities near highway offramps, the investment of a multi-national corporation like Nestle can signal to other large corporations that large investments in Africa can make sense, leading to the kinds of infrastructure improvements that will lead to improved economic, and ultimately, human outcomes.