Wednesday, June 17, 2015

Africa Rising – The Reality

For a number of years the spin has been that Africa possessed a blossoming middle-class to boost consumer spending and this would result in booming economic growth. But that is not the way Nestle, the world’s biggest food company, views it. It is to cut 15% of its workforce in sub-Saharan Africa. Nestle will reduce its product line by 50% and may close some of its 15 warehouses before September.

“We thought this would be the next Asia, but we have realised the middle class here in the region is extremely small and it is not really growing,” Cornel Krummenacher, chief executive officer of Nestle’s equatorial Africa (as sub-Saharan Africa is sometimes called) unit, was citedas saying by the Financial Times. Krummenacher also told the newspaper that Nestle would be lucky to reach yearly 10% sales growth in the region in coming years.

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