www.pwc.ie Africa Business Forum December 2014
Welcome Colm O Callaghan Director, Ireland Africa Business Forum December 2014 2
Agenda Speaker Topic Colm O Callaghan, Ireland Welcome address Tim Morgan, Chair, Africa Business Forum Opening address Paul Monekosso Cleal, UK Panel Discussion: Doing Business in Africa Ronan MacNioclais, Ireland (moderator) Paul Monekesso Cleal, UK Tim Morgan, Africa Business Forum and Minelab Andrew Gaynor, GeoScience Ireland Pat Higgins, Queally Group Q&A Africa Business Forum December 2014 3
Welcome Tim Morgan Chairperson, Africa Business Forum & Business Development Manager, Minelab Africa Business Forum December 2014 4
Tim Morgan, Chairman
Paul Monekosso Cleal Partner & Chair of Africa Business Group, UK Africa Business Forum December 2014 6
footprint in Africa Western Sahara Algeria Libya Egypt 8,700 Employees Cape Verde Senegal Gambia Guinea Bissau Guinea Sierra Leone Mauritania Liberia Mali Niger Nigeria Chad Sudan South Sudan Ethiopia Djibouti 450 Partners Equatorial Guinea Democratic Republic of Congo Kenya Rwanda Burundi Seychelles Tanzania Comores Mayotte Zambia Namibia Botswana Malawi Reunion Mauritius member firms South Africa Swaziland Leosotho For services in these territories please contact a neighbouring territory Slide 7
Why Africa, why now? Slide 8
SSA s GDP to reach USD 2.3trn by 2020 2,500 2,000 1,500 Sustained, diversified growth The 7% Club Doubling in size every ten years A new energy hotspot 1,000 500 0 1985 1990 1995 2000 2005 2010 2015 2020 Source: IMF Regional Economic Outlook 2012 Slide 9
The megatrends driving Africa s future Africa has the fastest growing middle class population in the world 313m people belong to the middle class in Africa (2010) 40% Of the population of Sub-Saharan Africa live in a water scarce environment 43% 12 The number of African megacities by 2025 Mobile broadband growth rate 2013-14 Africa has the highest mobile broadband growth rate across the world November 2014 Slide 10
Africa s population will double by 2050, while Europe s will shrink The pace of change around the world will vary significantly Population change 2013-2050 26% North America -4% Europe 20% Asia 27% Latin America 115% Africa 48% Oceania Source: UN Population Division, World Population Prospects 2012. Slide 11
By 2050, Africa will have a median age of 25, the lowest across the world In Europe, it will be 46 Median ages 2010 and 2050 37 41 North America 27 41 Latin America 40 46 Europe 19 25 Africa 29 40 Asia 32 37 Oceania Source: UN Population Division, World Population Prospects 2012. Slide 12
Africa will house some of the largest cities in the world, including Lagos, Kinshasa and Abidjan Biggest urban population concentrations in 2015 Source: UN Department of Economic and Social Affairs (2012). Note: The population figures in this table are based on a city's total urban agglomeration, which includes major suburbs and is larger than municipal population data. Slide 13
Africa s agricultural potential Africa has vast available land.and water resources 150 5,000 % of potential arable* land in use 120 90 60 30 Water per capita in m3 4,000 3,000 2,000 1,000 0 Africa Asia Middle-East Note that the proportion potentially arable land presently in use may exceed 100% in (semi) arid regions where irrigation practices are common Sources: FAO (Terrastat, Aquastat) 0 Africa Asia Middle-East Slide 14
New oil and gas discoveries will boost African oil and gas production 140 2011 600 120 500 Oil 100 80 400 60 1991 300 Natural gas 40 200 20 100 0 Oil Gas * Proved oil (bn barrels) and gas reserves (tn cubic meters) 0 1990 1995 2000 2005 2010 2015F 2020F 2025F 2030F *Production: Million tonnes oil equivalent Source: BP Statistical Yearbook Slide 15
Africa is resource-rich Platinum 82.0% Cocoa 66.0% Coltan (cellphones) Diamond (gemstone) 57.3% 56.7% Palladium 42.9% Gold 19.1% Tea Oil Aluminum 13.0% 12.0% 10.7% Copper Nickel Coal 6.0% 4.6% 4.2% Share of world production (%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Standard Chartered Research, World Bank, BP Slide 16
but consumption, not commodities, drives growth Growth in the middle-class* CAGR 2009-2030 Asia Pacific SSA % growth CAGR 2009 v. 2030 MENA C. and S. America Europe N America -2 0 2 4 6 8 10 * Defined by OECD as households with daily expenditures between USD10 and USD100 per person in purchasing power parity terms Source: OECD, United Nations, Standard Chartered Slide 17
Africa s mobile revolution African Mobile Connections have grown 30% CAGR 1,000 900 800 700 600 500 400 300 Penetration rate (RHS) 90 80 70 60 50 40 30 200 100 0 Connections (mn) 2000 2002 2004 2006 2008 2010 2012F 2014F 20 10 0 Slide 18
but of course huge challenges remain Slide 19
Politics and transparency remain issues A diversity of political risk Years current government is in power Angola Equatorial Guinea Zimbabwe Cameroon Uganda Burkina Faso Chad Gambia Swaziland Rwanda Congo DRC Kenya Namibia Seychelles Mozambique Mauritius Tanzania Sierra Leone Ghana Nigeria South Africa Gabon Côte d Ivoire Zambia Senegal 0 5 10 15 20 25 30 35 Ease of doing business 2013 index Country Ranking/185 countries South Africa 39 2 Rwanda 52-4 Ghana 64-1 Zambia 94-4 Kenya 121-4 Change over previous year Nigeria 131 No change Tanzania 134-1 Burundi 159 13 Equatorial Guinea 162-3 Gabon 170-5 Angola 172 2 Cote d Ivoire 177 No change Sources: Africa Progress Report 2012, USIP 2010, World Bank, Doing Business 2013 Slide 20
The risk of investing in Africa is higher than in any other region Q4 2013 country risk premium estimates Source: Country Risk Service: http://www.pwc.co.uk/the-economy/issues/country-risk-premia-quarterly-update.jhtml Slide 21
Africa s infrastructure is inadequate for growth Logistics performance index, 2012 Country Score Customs Infrastructure International shipments Logistics competence Tracking and tracing Timeliness Europe and Central Asia 2.74 2.35 2.41 2.92 2.60 2.75 3.33 Latin America and Caribbean 2.74 2.38 2.46 2.70 2.62 2.84 3.41 East Asia and Pacific 2.73 2.41 2.46 2.79 2.58 2.74 3.33 MENA 2.60 2.33 2.36 2.65 2.53 2.46 3.22 South Asia 2.49 2.22 2.13 2.61 2.33 2.53 3.04 Sub-Saharan Africa 2.42 2.18 2.05 2.51 2.28 2.49 2.94 Source: World Bank Logistics Performance Index 2012. Sub-Saharan Africa ranks lowest of the world s developing regions Key weaknesses are logistical competence and inadequacy of trade infrastructure World bank estimated need for $93bn infrastructure spend per annum but only $45bn is spent Poor score for infrastructure, logistics competence and customs clearance reflect the lack of capacity of the road, rail and port networks Scores better for international shipping and tracking/tracing, reflecting well developed commodity exports and related imports of capital goods Slide 22
Other issues posing a challenge to Africa growth Talent/skills Healthcare Security Institutional capacity Investment climate Slide 23
Panel discussion Ronan MacNioclais (moderator) Paul Monekosso Cleal, UK Tim Morgan, Africa Business Forum Andrew Gaynor, GeoScience Ireland Pat Higgins, Queally Group Africa Business Forum December 2014 24
Closing remarks Ronan MacNioclais Partner, Ireland Africa Business Forum December 2014 25
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