Transcript Title (Arial bold 30 point)

The African Growth Story
Apex Brasil
25 August 2014
Africa’s economy
The continent’s rise is real
The size of the African economy has trebled in a decade
GDP, current prices
2,737.4
(US$b)
2,535.8
3,030.9
2,249.2
2,593.0
1,870.7
1,929.3
1,337.1
613.5
251.1
362.4
2000
853.3
285.3
568.0
2004
447.1
1,488.1
614.9
1,060.1
2,196.7
2,033.9
2,091.4
689.9
697.7
725.7
898.6
523.3
889.9
964.8
2007
2009
1,314.4
1,344.0
1,393.7
1,471.0
2011
2012
2013
2014*
1,694.4
2016*
North Africa
* Estimates
Note: these numbers exclude the recent rebasing of the Nigerian economy.
Source: IMF World Economic Outlook Database, April 2014.
EY’s 2014 Africa attractiveness survey
1,970.8
2018*
SSA
Continued growth is expected over the
next 5 years
Five year forecast GDP growth rates (%) indicated on a colour spectrum: Green
(higher) to red (lower)
Sources: Oxford Economics;
EY Growing Beyond Borders
In the context of a still weak global economy, Africa’s overall
economic prospects remain robust.
5
Investor perceptions
A dramatic improvement
Respondents citing an improvement
in Africa’s attractiveness as a place to
do business
Attractiveness over the past year
60%
+4 points
Change vs. 2013 survey
Attractiveness over the next three
years
73%
+1 point
Change vs. 2013 survey
Source: EY’s 2014 Africa attractiveness survey (total respondents: 503).
EY’s 2014 Africa attractiveness survey
Actual FDI numbers
Strong growth in FDI projects in SSA
FDI projects in Africa
218
352
259
196
164
Source: fDi Intelligence.
226
213
Pre-crisis
average
(2003-07)
2007
129
593
621
2012
2013
215
647
524
486
460
2008
2009
2010
North Africa
181
SSA
EY’s 2014 Africa attractiveness survey
2011
East, Southern and West Africa
FDI growth spreads across
New FDI hotspots are emerging in Africa
51%
CAGR (2007-13)
40%
33%
31%
23%
17%
20%
19%
6%
South
Africa Mozambique Zambia
Kenya
Tanzania
Uganda
Rwanda
Ghana
Southern Africa
East Africa
West Africa
CAGR: 14%
Share: 33%
CAGR: 23%
Share: 17%
CAGR: 28%
Share: 17%
Source: fDi Intelligence.
EY’s 2014 Africa attractiveness survey
Nigeria
With investment increasingly
spread across multiple sectors
Consumer-facing industries rise in prominence
Although investors expect resource-driven sectors to remain the
highest potential industries over the next two years, in line with what
the actual numbers tell us, infrastructure and consumer-
facing sectors are expected to increase in prominence.
Source: fDi Intelligence; EY analysis
However, Africa remains a challenging place
to do business
Source: Kai Krause
Kellogg Africa Strategy Framework
Opportunities and risks do vary widely –
African markets are diverse and fragmented
Note: A composite Risk
index is indicated on a
colour spectrum from
green (relatively more
positive) to red
(relatively less positive).
A fact-based approach to selecting &
prioritising markets in Africa is critical.
Source: World Bank; Transparency International; WEF Competitiveness
Index; EY Growing Beyond Borders
Executing a growth strategy in Africa
Choices need to be made & multiple
lenses applied
Coherent regional blocs can be
configured in different ways, for
e.g.:
4
3
2
5
6
1
Presentation title
1.
Southern: Botswana, Namibia,
Malawi, Mozambique, Zambia &
Zimbabwe.
2.
East: Kenya, Tanzania, Uganda,
Rwanda, Burundi & Ethiopia
3.
Anglophone West: Nigeria &
Ghana
4.
Francophone West: Cameroon,
Cote d’Ivoire & Senegal
5.
Central: DRC & Angola
6.
Indian Ocean Islands:
Mauritius, Reunion, Madagascar
& Seychelles.
Urban hubs and clusters are the emerging
markets of the future
Top 15 African
states/provinces for
FDI projects
(Share of total FDI projects)
Source: fDi Intelligence; EY’s 2014 Africa attractiveness survey (total respondents: 503).
EY’s 2014 Africa attractiveness survey
The perception gap remains stark
Established vs. not established
Respondents who…
…believe Africa’s attractiveness has
improved over the past year
73%
39%
Established
Not established
…believe Africa’s attractiveness will
improve over the next three years
87% 51%
Established
Not established
…have a specific strategy for investment in
Africa
67%
Established
10%
Not established
Source: EY’s 2014 Africa attractiveness survey (total respondents: 503).
EY’s 2014 Africa attractiveness survey
Perspective is important
Consciously choose a glass half-full perspective
”Over this year, we’ll announce US$1 billion investment into Africa. We’re
here for the long term. Africa is going to grow. We need to be here and,
as a big company, we can afford to take risks around that. We’re
accustomed to taking the long-term view from elsewhere in the world —
we’ve been in China for 25 years.”
Jay Ireland, President and CEO, General Electric Africa
“We think that Africa is the next major emerging growth
market,” Bruno di Leo, GM for Growth Markets, IBM.
Executing a growth strategy in
Africa