Sub-Saharan Africa
The New Frontier
Rob Hersov – Chairman
June 2014
Japan-Africa Business Forumwww.investafrica.com

www.investafrica.com

Macroeconomic Snapshot
Strong GDP Growth

Increasingly attractive market

Africa is home to 1 billion people and one third of the world’s natural resources

Six of the world’s fastest growing economies over the last 10 years have come from sub-Saharan Africa

Africa’s GDP will increase from $2 trillion today to $29 trillion in today’s money by 2050 ₂

The aggregated market of Africa dwarfs those of Latin America
1 – UNECA Economic Report for Africa 2013
2- Charles Robertson et al, 2013, ‘The Fastest Billion: The Story Behind Africa’s Economic Revolution’www.investafrica.com

Total FDI : $53Bn (2013)$3Bn

1 – UNCTAD Database, Eurostat, African Economic Outlook. FDI Intelligence, 2011, 2012, 2013www.investafrica.com

Foreign Direct Investment into Africa
FDI recipients - top 10 economies

FDI Flows into developing Africa

Bucking global trends: While FDI flows globally declined by 18%, those to Africa increased by 5% ₁Asian inflows: Malaysia, South Africa, China and India (in that order) are the largest developing-country sourcesof FDI in Sub-Saharan Africa (ex-SA)

Consumer markets on the rise – feeding into increases in expendable income

New regional growth – East Africa of strategic importance
1 – UNECA Economic Report for Africa 2013
2- Charles Robertson et al, 2013, ‘The Fastest Billion: The Story Behind Africa’s Economic Revolution’www.investafrica.com

Five drivers of the African growth story

Demographics

GovernanceTradeDrivers

Urbanization

Technology

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Demographics
Upward population trends

Youth bracket bulge

Populating the planet: by 2050 one in five of the world’s inhabitants will be African

New generation: sub-Saharan Africa has a median age of 18.6, is experiencing a demographic boom similar tothat enjoyed by China and other East Asian nations in the last half of the twentieth century ₂



By 2040, Africa’s population is projected to have the largest proportion of economically active adults of any majormarket
1 – UN, 2013, World Population Forecast
2 - World Economic Forum Review, June 2013
3 – Goldman Sachs Report, March 2012, ‘Africa’s turn’

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Governance
Overall leadership scoreSource: 2012 Ibrahim Index of African Governance (IIAG)

Business environment

IFC ‘Doing business’ index
EconomyEase of Doing Business Rank (1-185)

South Africa
RwandaGhana
Namibia
ZambiaUgandaKenya
Ethiopia
Nigeria
Tanzania
Mozambique
AngolaCongo, Dem. Rep.

39
52
64
87
94
120
121
127
131
134
146
172
181

Source: Selected Countries - World Bank, IFC, June 2012

Source: 2012 Ibrahim Index of African Governance (IIAG)

Improving governance: 20 years ago, only 7 of Africa’s countries held frequent elections – now thefigure is 2 in 3Transparent business environment: according to the latest World Bank’s annual ranking ofcommercial practices, 36 out of 46 African governments improved the ease of doing business in 2012www.investafrica.com

Urbanization



Present opportunities: Africa has more cities with 1 million people than North America



Mass migration to cities: around 40% of Africans currently reside in urban areas. Further ahead, by 2050, morethan 60% of Africans will live in urban areas ₁

2nd / 3rd city focus : 70% of all urban growth in the next two decades is expected to take place in smaller towns
and cities across the continent ₁1 – Standard Bank Research, Sept. 2011, ‘The five trends powering Africa’s enduring allure’

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TechnologyAfrica goes mobile

Source: World Bank, Wireless Intelligence and ITU

Increase in Internet users

Source: Internet World Stats

Skipping fixed line technology: Africa is re-shaping traditional Western conceptions of technologicaldevelopment



Mobile economies: more people in Africa now have access to a mobile phone than clean drinking waterConnectivity: there are around 120 million internet users in Africa. 2000 to 2011 - internet usage in Africa grew by
2,527% ₂
1 – M & C Saatchi Mobile, June 2013, ‘ Inside Mobile Africa’
2 – Standard Bank Research, Sept. 2011, ‘The five trends powering Africa’s enduring allure’
3 – McKinsey, October 2012, ‘The Rise of the African consumer

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TradeFuel exporting nations dominate

Europe main trade partner



BRICs trade relationship: 22 years ago Brazil, Russia, India and China accounted for just 1% of African trade.
Today they make up 22%, and by 2030 the rate is expected to be 50% ₁

Natural resource wealth: Africa is highly commodity dependentRoom for development: out of 54, 42 African countries are still net importers of oil, 45 are net importers of food ₃
1 – UNECA Economic Report for Africa 2013
2- - United Nations Conference on Trade and Development, 2012
3 – Food and Agriculture Organization of the United Nations data, 2013www.investafrica.com

Small and Medium Enterprises – Key to Growth

Growing
ConsumerClass

DFI’s andbeyond

Educated

Reduced

Improving

Local

Government

Business

Management

Interference

Environment

Sector Growth
Consumer
Goods
Financials

Invest Africa

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Invest Africa
IA’s vision is to be a global private members club with a multi-service
platform for access and investment into Africa.
Our network is made up of business leaders at top global organizations, fundmanagers, private investors, family offices, entrepreneurs, and policy
makers – all with a common interest in Africa.

Membership Benefits
NetworkAccess

EventsResearch

TravelInvestingRobertHersov
FounderandChairman

BobDiamond
Co-Chairman&Presidentof
theNewYorkChapter

AshishJThakkar
PresidentofDubai
Chapter

Accesswww.investafrica.com

ACI – Africa Capital Investments
Through our experienced team at ACI, we are able to connect projects to finance, identify co-partners for direct investments and assist with entry into thesub-Saharan market by leveraging our significant networks on the groundFundraising / placement



Deal Origination

Investment promotion
Fundraising road shows

Corporate Advisory





Deal introduction
Deal facilitation

Fundraising events

Investment structuring
Due diligence
Investment appraisal
Valuations
Marketing information support
Management advisory
Buy/Sell side advice
Transaction process
management

ACI can add significant value
For companies
Senior board recruitment



Identification of local partners
Access to capital

For Investors
 Trusted deal origination

Investment structuring
Ongoing oversight of investor interests

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