While (Porter, 1990) might have ignored or downplayed the role that multinational activities play in driving development and competitiveness in his single diamond model, (Rugman, 1993) catered for this in his double diamond model approach. In essence the double diamond model acknowledges and proposes that asides domestic activities, multinational activities could also contribute to the competitiveness and development of any nation. The value of these multinational activities can be measured in terms of inward and outward foreign direct investments.
The transition of countries like South Korea and Singapore from newly industrialized countries in the 1970s and 1980s to advanced economies that they are today hinges heavily on the impact of multinational activities. In the case of both countries, inward FDI offered a shot at huge capital and technology inflow, while outward FDI enabled the two countries to seek cheap labor and natural resources from the international community. Today with an economy supported by a conscious investment in the pharmaceutical sector, financial services and high tech industry Singapore boasts of a GDP of $331.9 billion and GDP per capital of $61,400 (Index mundi, 2013). Korea (South) has thrived as an industrialized high-tech hub and ranks as the 12th biggest economy in the world. South Korea's GDP in 2012 was measured at $1.64 trillion while GDP per capital stood at $32800 (Index mundi, 2013).
Unlike South Korea and Singapore, Nigeria and continent as large have a vast reserve of 'untapped' human and natural resources meaning there is no mandatory need to press abroad for such and perhaps this limits the required outward FDI to purely international export activities.
However, the key and noticeable trend is the lack of 'adequate' inward FDI in form of capital inflow and technology required to drive sustainable development and competitiveness.
1.5 A few FMCG companies already taking initiative
While there is a heartfelt call for more capital investments from FMCG companies, a few have obliged and continue to take the initiative when it comes to expansion across Nigeria and Africa. According to (Financial Intelligence, 2013), Nestle and Unilever seem to be setting the tempo for expansion in Africa. This comes off the back of the potential for growth evident through the increase in income in Nigeria and other Sub-Saharan African countries. It is however surprising to realize that Africa still only accounts for 3% of Nestl'??s global sales. One would have expected more from the continent considering the population and growth rate. The good news however is that Nestle dedicated close to $1.5 billion towards capacity expansion in Africa that would run up till 2015 and probably beyond.
The Procter & Gamble (P&G) group also drew attention with an announcement by the Group President overseeing Africa, Middle East and Eastern Europe - Laurent Philippe to invest heavily in Nigeria through the year 2015. With only just one factory located in Ibadan and a portfolio of only just four brands prior to this announcement, it is obvious the company is catching up with the reality and magnitude of the Nigerian market that has been favorable to the likes of other FMCG companies like Unilever and Nestle (Reinvent Rebuild Group, 2011).
Figure 6 : African footprint for selected retail and consumer product companies - Source: Ernst & Young
Having Identified Nigeria as the second largest market for packaged foods in Africa, Singapore agribusiness group Olam invested $66.5 million into the acquisition of Nigerian diary firm Kayass Enterprises in June, 2012. Nigeria's natural growth potential among other factors such as changing demographic profile, increasing population were all sighted as the motive behind this expansion move which is further scheduled to enter other African nations. This move helped to further consolidate the company's existing presence in Nigeria even as it looks to expand within Nigeria and to other neighboring West African countries (Just-food, 2012).
While Wal-Mart's bold move into South Africa through the acquisition of Massmart in 2011 was a welcome move, there is hope of expanding on a larger scale to neighboring African Nations. A couple of investment houses are also beginning to take initiative with Africa and the potentials of the FMCG sector. One of such players is UK-based asset management firm, Silk Invest. The firm has plans to launch a private equity fund running in the excess of $200 million which would cater to end-processing companies such as biscuit and drinks producers. Nigeria, Ghana and Kenya rank top among other countries that Silk investment would be targeting.
By 2015, Spar Nigeria, a division of the Dutch retail group, SPAR International is planning to launch 200 outlets in a move that is targeted to bridge the gap between the farmers and the market. And most definitely, more jobs, agricultural development, economic impact and growth are bound to accompany such a bold investment.
1.6 Project objective
The project is positioned to investigate existing trends, establish facts and deliver the way forward for a nation and continent in need of drastic changes and improvement. Inasmuch as this call might seem clich??, the significance and urgency of the message cannot in any way be overemphasized.
The goal is to send out a message, investigate and establish that sustainable development along with improved competitiveness could be achieved through effective resource (human & natural) maximization and improved inward FDI into Nigeria most especially within the circumference of the FMCG industry, a vibrant and relevant industrial sector of any economy.
After fact finding, analysis and recommendations, the project must have shed more light on the human and natural resource prowess of Nigeria (and Africa at large) and answered this question; Which strategic measures can be implemented to ensure that Nigeria and global FMCG players effectively maximize the human and natural resource potential of the nation for mutual ensuing benefits?
In summary, two sides of a potential coin would have been evaluated:
I. Benefits: Gains in terms of improved competitiveness and sustainable development for Nigeria & commercial / resource based opportunities for FMCG corporations
II. Actions: Human and natural resource maximization through government's proactivity & improved FDI from global FMCG multinationals
In order to properly tackle both sides of the equation and create a basis for solid strategic thinking as it relates to bringing about change and sustainable development, the following areas would be looked into with the aim of presenting relevant information.
I. Interesting trends around Africa
1. Why Africa: Why should FMCG corporations sink more FDI into Africa?
II. Nigeria's human and natural resource scene
1. Infrastructure woes and challenges
2. Quality of human resources/ technical know-how and competence of available workforce
3. Nigeria's FDI activity breakdown
III. The Nigerian FMCG sector overview
1. The FMCG Industry at large
2. The Nestle case study
IV. Nigeria's FDI and Global Competitiveness outlook
V. Nigeria's import and export outlook
VI. Nigeria's FDI outlook in comparison other factor , efficiency and innovation driven economies (from the Global competitiveness report)
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