Graham Mackay, CEO of SABMiller, on the water, food and energy challenges that need to be addressed to ensure Africa’s future. He is participating in the Annual Meeting session, De-risking Africa.
There are currently 2 billion middle-class consumers in the world and the number is projected to reach 5 billion by 2030. Much of the increase will come from developing markets.
This growth is an exciting opportunity for the many people whose lives and livelihoods will improve; but it will place further demands on the world’s finite resources such as water, energy and agricultural inputs, leading to potential tension and conflict as countries seek to maximize their opportunity for growth.
Effectively addressing the world’s resource challenges requires collaboration and multistakeholder partnerships, with business and government both critical participants. Recognizing the crucial role that water in particular plays as a catalyst for both economic growth and social development, the World Economic Forum formed the 2030 Water Resources Group (WRG) to research water resource scarcity. In October 2009, WRG published a landmark report, Charting Our Water Future, which analysed the water supply-demand gap, predicting that, if no action is taken, the global demand for water will exceed current supply by 40% by 2030. However, the report also identified measures that could close the water resource gap and even achieve savings in some sectors.
The issue of resource depletion and scarcity is not new – oil, rainforests, water and minerals have all, at times, been the focus of scarcity concerns and action. What has changed is the realization that these issues can no longer be treated individually and that water, energy and agricultural food production are all connected – what many call the water-food-energy nexus. A paradigm shift in thinking is now required to manage them in the context of this interconnectivity.
Resilient growth particularly in Africa is dependent upon an integrated approach to resource management and policy-making which, historically, governments have not appreciated. For example, an agriculture department might commit to doubling land under irrigation to maintain food security, while the water department determines there is no more water available for irrigation. The energy department seeks to promote significant investment in new biofuel plantations that need irrigation and, at the same time, climate change will mean there is less water available overall. All of these things cannot happen at once.
Rather than work in such silos, with water, food and energy policy set with little regard for one another, through initiatives such as the Water Resources Group we need to bring government departments together with private sector partners, so they are more connected and formulate policies that apply nexus thinking, to help manage the trade-offs between scarce resources and account for their real value.
Foreign investment into Africa is now five times what it was a decade ago and it stands at twice the level of official development aid. Businesses and countries across the world are keen to have a stake in Africa’s future and a role in its growth. But at the heart of ensuring that growth is truly resilient are multistakeholder partnerships and a new, integrated approach to resources.
Image: Customers sit on the veranda of a branch of Nairobi Java House in Nairobi. REUTERS/Noor Khamis