Economy
The Future of Brand Communication in a Self-Actualized Economy of 2050
Chumisa Ndlazi
Towards the end of the year last year, I was invited to be a panelist at the Global Work Tech Scenarios 2050 South Africa Conference. At first, I was nervous to share my thoughts as I was not sure how they would be received, and I was not so sure about how my expertise in the field of Marketing and Communications would fit in the context of the future of science and technology. Quite often, the tendency is that we see science as a mutually exclusive subject that does not directly impact our daily lives – well at least that’s what I thought.
However, the more exposed I have been to this field,the more I realise how the different waves in science and technology have been shaping the cultural experience of society, for example, the way in which society communicates, shops and accesses information has changed because of the digital age. Attending this conference has further opened my eyes to this and as a result, has demanded that I think about the possibilities of the future and role of Marketing and Communications in this regard.
In preparation for the panel discussion, we were sent a document titled Future Work/Tech 2050 Global Scenarios. Using a future studies method, the case study thoroughly highlights potential scenarios that could emanate by 2050 as a result of global technological advancements. Additionally, the case study examines the effect these advancements will have on politics, economics and culture. Out of the three scenarios presented to us, the third one titled: If humans were free – the self-actualization economy resonated with me the most.
According to this particular future study, new technologies in the form of artificial intelligence will change the face of the job market as we know it today. By 2050, approximately 4-billion people will gravitate towards self-employment. This means, although new technologies might not necessarily support formal employment but, they may provide a conducive environment for alternative forms of employment to thrive. With this kind of economic shift, the study predicts that the percentage of people employed by corporations will decrease and there will be an increase in the number of self-employed individuals. The study also suggests that individual power will begin to increase relative to government and corporate power.
This economic shift which is a result of a technological revolution will also have a direct impact on global culture. Due to increased individual power, society will begin to embrace the concept of a self-actualized economy. Essentially, what this means is, individuals will begin to decide for themselves how to use their time, ponder on issues concerning their life purpose and find ways to express their purpose through work. As a result, a culture of self-awareness, creativity and purpose will culminate and this could also change the way in which people relate to brands. In a society where individuals are self-aware and are driven by the need to express self, one has to ask themselves how will this affect the way corporates market and communicate their brand to the public.
Corporate for many years has benefited from the existence of public relations, marketing and communications. This is because this field of study specialises in examining the behaviour of consumers or a particular target audience, understanding their needs and wants then, using various methods to mass communicate a particular service or product to a group of people for the purpose of profit.
In fact, Edward Bernays who is considered the “father of public relations” and known as nephew of Sigmund Freud,based the foundation of public relations on studying crowd psychology – which is a broad study of how an individual’s behaviour is influenced in a large crowd. Over the years, this approach has worked like a charm because the economic system of capitalism bred a societal culture of competitiveness, consumerism and the need for attaining material success in order to gain social acceptance. Therefore, corporate through public relations, marketing and communications, have been able to win over the loyalty of various publics by tapping into this.
However, if future studies are predicting a self-actualized economy by 2050, which will have us witness a decrease in corporate power and an increase in individual power. If the order of the day in society will be about exploring personal creativity, self-awareness and pursuing purpose as opposed to seeking material success for gaining social acceptance, it may mean that the field of marketing and communications may have to start finding a different approach to communicating brands to the public.
I therefore suspect that as opposed to a mass communication approach which groups people according to what they have – for example, using the living standard measuring (LSM) method to understand a particular target audience, a more personalised approach may have to be adopted. This means, brands may have to invest more time in scanning the environment of their target market, taking the time to understand what affects them, what they want, what they need, their deepest desires and fears. The changing consumer market will dictate that brands have the ability to engage as an active member of the community, and skillfully interpret their belief and value systems, and not just their physiological needs.
Previously, brands got away with simply marketing and communicating a product to push it in the market. This approach worked for years because the consumerist culture of that time was more about, what can a particular product or service do for me. However, this approach to a consumer of today seems detached. With the digital age which allows us to access information easily, there already has been a gradual increase in consumers who are more aware and have taken interest in the politics that govern how a brand operates. As a result, consumers confidently reject a brand that does not represent their beliefs or value system. This kind of consumer, unapologetic and self-aware is predicted to increase exponentially by 2050. For the brands that refuse to observe and listen, they will remain detached from the reality of their target audience and will find themselves preaching to the unconverted.
The Republic of Angola has become the 21st African Member State and the 1st Lusophone Member State of pan-African insurer, Africa Trade Insurance Agency – ATI, after paying a capital subscription of USD25 million. The membership was funded the Angolan National Treasury resources and proceeds from the landmark BITA water project – a strategic public investment for the construction of infrastructure for the treatment, supply and storage of drinking water that will benefit 2.5 million people in Angola.
Welcoming Angola’s membership, ATI’s Chief Executive Officer, Manuel Moses, noted the country’s demonstration of its commitment to diversify its economy through ATI’s trade and investment risk mitigation solutions.
“We are happy to support Angola in its quest to economic diversification and becoming an agricultural powerhouse on the African continent. Angola’s membership is timely as ATI’s risk mitigation and credit enhancement services will act as a catalyst for strengthening and diversifying Angola’s economy, supporting both increased investment, exports and trade under Africa’s continental framework of the AfCFTA,” Mr. Manuel said.
Under this one of a kind blended finance and guarantee innovative structure, the Republic of Angola – along with the lenders covered by ATI under the transaction – agreed for the use of proceeds under the syndicated loan to also include the financing for the purpose of Angola becoming a member of ATI. ATI provided guarantee and insurance support for this World Bank’s partially guaranteed facility to the Government of Angola for the expansion and improvement of water supply service in the urban and peri-urban belts of Luanda.
Current exposure
ATI’s gross exposure in Angola, the largest country in Southern Africa Region, currently stands at USD467M mainly in construction, energy & gas, trade & transport, water supply and wholesale & retail sectors, with transactions valued at USD1.4B.
“This development was made possible because of ATI’s pan African mandate that allows the organization to cover transactions in Angola and beyond, despite ATI non-membership. Now that Angola is a fully-fledged shareholder of ATI, the country can fully access more of ATI’s guarantee solutions to attract more Foreign Direct Investments and boost its internal and external trade across the region,” Mr. Manual explained.
Angola’s economy is mainly driven by its oil sector but the country seeks to pursue new growth models for economic diversification through the agricultural sector and private sector development.
With ATI’s support, Angola is on the path to fiscal consolidation, manage their debt ceiling, increase in public and private investment, in order to resume the ascending curve of sustainable and inclusive economic growth as well as human development.
ATI has grown from a small African start-up in 2001 into a pan-African institution with presence across Africa and with a significant global reach. Besides Angola, other member countries include Benin, Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Senegal, South Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.
Institutional members include African Development Bank, African Reinsurance Corporation, Atradius Group, Chubb, CESCE (Spanish ECA), Ministry of Finance India (represented by ECGC), SACE SIMEST, The Common Market of Eastern and Southern Africa (COMESA), Trade and Development Bank (TDB), Kenya-Re, The PTA Reinsurance Company (Zep-Re), and the UK Export Finance.
G7 Members (Photo: European Union)
In late June 2022, it was announced at the G7 Summit in Germany that a USD 600 billion lending initiative, the Partnership for Global Infrastructure Initiative (PGII), would be launched to fund infrastructure projects in the developing world, with a particular focus on Africa. The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom (UK) and the United States (US) – explained the PGII would help address the infrastructure gap in developing countries.
The US
The US has recently renewed its focus on impact-building and financing strategic, long-term infrastructure projects in Africa, with the Export-Import Bank of the United States (EXIM) supporting infrastructure development on the continent. According to a 2020 report by McKinsey and Company – Solving Africa’s infrastructure paradox – the US accounts for 38% of global investors who have an appetite for African investment, by far the most of any country. In 2021, the US launched a refreshed “Prosper Africa initiative”, focusing on improving reciprocal trade and investments that create jobs and build infrastructure between the two regions. In 2022, the US announced it would mobilise USD 200 billion over the next five years as part of the PGII, in the form of grants, financing and private sector investments. Some deals have already been announced, including, for example, a USD 2 billion solar energy project in Angola, and the building of multiple hospitals in Côte d’Ivoire.
The EU
In February 2022, the European Commission announced investment funding for Africa worth EUR 150 billion. The funding package is part of the EU Global Gateway Investment Scheme and is said to be in the form of EU combined member funds, member state investments and capital from investment banks.
In early 2020, the European Commission published its Comprehensive Strategy with Africa, outlining the region’s plans for its new, stronger relationship with the continent. The strategy document laid out five top priorities for the EU in Africa: the green transition and improving access to energy; digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.
The UK
The UK is also making a strong play for influence, investment and trade with Africa, post-Brexit. Further to key summits in 2020 and 2021, finance is being redirected into Africa from the UK. In 2022, UK development finance institution (DFI), British International Investment (formerly CDC Group), announced it had exceeded its pledge to invest GBP 2 billion in Africa over the last two years. The UK’s Global Infrastructure Programme helps partner countries (including in the African continent) to build capacity to develop major infrastructure projects, setting up infrastructure projects for success and paving the way for UK companies to support these projects.
Further, in November 2021, it was announced that the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, were in negotiations to form a long-term Just Energy Transition Partnership. The partnership focuses on boosting the decarbonisation of the South African economy, with a commitment of USD 8.5 billion for first round financing. It is expected that 1-1.5 gigatonnes of emissions will be prevented over the next 20 years, assisting South Africa to accelerate its just transition. Discussions are also currently taking place to establish a similar partnership in Senegal.
African solutions
The African Development Bank noted in early 2022 that Africa’s infrastructure investment gap is estimated at more than USD 100 billion per year.
DFIs are increasingly anchoring the infrastructure ecosystem in Africa – serving a critical function for project finance as investment facilitator and a check on capital. DFIs can shoulder political risk and access government protections in a way that others cannot, enter markets others cannot and are uniquely capable of facilitating long-term lending. The large amount of capital needed to fill the infrastructure gap, however, means that DFIs cannot bridge it alone. Private equity, local and regional banks, debt finance and specialist infrastructure funds are primed to enter the market, and multi-finance and blended solutions are expected to grow in popularity as a way to de-risk deals.
The African Union’s 55 member states have stated that their primary funding needs include support in terms of safety and security on the continent, as well help in implementing the African Continental Free Trade Agreement (AfCFTA) and the massive infrastructure investment it needs to be successful. The development of supporting infrastructure is key to boosting AfCFTA’s free trade potential, especially in terms of transportation, energy provision, internet access and data services, education and healthcare infrastructure projects.
Infrastructure projects in Africa now also have a heightened focus on improving Africa’s capacity for green, low-carbon and sustainable development, via, for example, clean energy, community healthcare and support, green transport, sustainable water, wildlife protection and low-carbon development projects. Funding such projects comes with responsibility – projects must not only be bankable and yield attractive returns, but must also be sustainable and provide tangible benefits to local economies and communities. All of Africa’s major partners have noted they will prioritise projects that commit to Environmental, Social and Governance principles, and access to capital for large infrastructure projects is likely to contain sustainability requirements.
That the focus of the PGII is on the sustainability and the social impact of these projects in Africa is further evidenced in the White House briefing room statement issued at the launch in June 2022, where it was stated that the PGII will “mobilize hundreds of billions of dollars and deliver quality, sustainable infrastructure that makes a difference in people’s lives around the world…”
By: Michael Foundethakis, Baker McKenzie’s Global Head of Projects and Trade & Export Finance, and Africa Steering Committee Chair
Economy
Shelter Afrique: Rising cost of land, materials, could adversely affect provision of affordable housing
Shelter Afrique Ag. CEO & Chief Finance Officer Mr. Kingsley Muwowo (right) explaining engaging with delegates at the 11th World Urban Forum held in the Polish city of Katowice. (Image: Shelter Afrique)
The high cost of land and the rising cost of building materials could derail efforts to speed up the development of affordable housing across the globe, pan African housing development financier, shelter Afrique has warned.
Speaking on Delivering Affordable Housing Across Continents at a special session of the 11th World Urban Forum held between June 26-30 in the Polish city of Katowice, Shelter Afrique’s Ag. Managing Director and Chief Finance Officer Mr. Kingsley Muwowo said there was an urgent need by governments to address the issues of rising costs of land and construction materials, which were hindering efforts to fast-track the provision of affordable housing globally.
“From market studies the cost of land should constitute between 10% and 15% of the total cost of a housing unit for it to be affordable, but this isn’t the case in many countries,” Mr. Muwowo said.
“In Kenya, for instance, the cost of land makes up between 40% and 60% of the total cost of a housing unit, like the case with Nairobi which is the most expensive in the entire continent of Africa. How do you deliver affordable housing when you’ve got the most expensive land? So if we don’t address the issues around land we will not be able to effectively tackle the issue of affordable housing.”
Soaring prices
Mr. Muwowo also decried the rising construction cost – which he blamed on old building codes, punitive tax regimes, and high cost of financing such projects in various countries. He added that the Russian – Ukraine war had also resulted in the sharp increase in prices of critical construction materials. Russia is considered the fourth-largest steel exporter globally, serving over 150 countries and territories.
“In the built environment, the conflict has exacerbated and exposed the dangers of overreliance on importing building materials. Prices of building materials have increased and continue to do so, a burden that the homeowners will ultimately share,” Mr. Muwowo said.
The price of steel in Kenya, for instance, has significantly shot up over the past few months. The prices of steel bars and nails have risen by between 80 per cent to 90 per cent and 13 per cent to 43 per cent, respectively, in the past few months in the country. Additionally, the conflict has resulted in shortage of coal, which is a crucial source of energy in cement production through clinker manufacturing resulting in price hikes.
Speaking at the same event, European Investment Bank Vice President Prof. Teresa Czerwińska said the rising cost of housing in many cities across the world was a major concern for the Bank.
“We have managed to make education and healthcare relatively cheap and accessible by putting in place proper policy interventions. Housing is a fundamental human right and we can apply a similar framework in ensuring housing remains affordable and available,” Prof. Czerwińska said.
The World Urban Forum (WUF) is a global event on sustainable urbanization convened every two years by the United Nations Human Settlement Programme (UN-Habitat). It was established in 2001 by the United Nations to examine rapid urbanization and its impact on communities, cities, economies, climate change and policies. The first WUF was held in Nairobi, Kenya in 2002 and has been held around the world ever since.
This year’s event was convened under the theme: “Transforming our cities for a better urban future”.
