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The African Growth Story Apex Brasil 25 August 2014

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 (US$b). 2,737.4. 2,535.8. 3,030.9. 2,249.2. 2,593.0. 1,870.7. 2,196.7. 2,091.4. 2,033.9. 1,929.3.

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The African Growth Story Apex Brasil 25 August 2014

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  1. The African Growth StoryApex Brasil25 August 2014

  2. Africa’s economyThe continent’s rise is real The size of the African economy has trebled in a decade GDP, current prices (US$b) 2,737.4 2,535.8 3,030.9 2,249.2 2,593.0 1,870.7 2,196.7 2,091.4 2,033.9 1,929.3 1,488.1 1,337.1 853.3 613.5 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

  3. 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) In the context of a still weak global economy, Africa’s overall economic prospects remain robust. Sources: Oxford Economics; EY Growing Beyond Borders 5

  4. Investor perceptionsA 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 Source: EY’s 2014 Africa attractiveness survey (total respondents: 503). Change vs. 2013 survey EY’s 2014 Africa attractiveness survey

  5. Actual FDI numbers Strong growth in FDI projects in SSA FDI projects in Africa SSA 19.5% CAGR since 2007 Source: fDi Intelligence. EY’s 2014 Africa attractiveness survey

  6. East, Southern and West AfricaFDI growth spreads across 51% New FDI hotspots are emerging in Africa 40% CAGR (2007-13) 33% 31% 23% 20% 19% 17% 6% South Africa Mozambique Zambia Tanzania Rwanda Nigeria Kenya Uganda Ghana Southern Africa CAGR: 14% Share: 33% West Africa CAGR: 28% Share: 17% East Africa CAGR: 23% Share: 17% Source: fDi Intelligence. EY’s 2014 Africa attractiveness survey

  7. 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

  8. However, Africa remains a challenging place to do business Source: Kai Krause Kellogg Africa Strategy Framework

  9. 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

  10. Choices need to be made & multiple lenses applied • Coherent regional blocs can be configured in different ways, for e.g.: • Southern: Botswana, Namibia, Malawi, Mozambique, Zambia & Zimbabwe. • East: Kenya, Tanzania, Uganda, Rwanda, Burundi & Ethiopia • Anglophone West: Nigeria & Ghana • Francophone West: Cameroon, Cote d’Ivoire & Senegal • Central: DRC & Angola • Indian Ocean Islands: Mauritius, Reunion, Madagascar & Seychelles. 4 3 2 5 6 1 Presentation title

  11. 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

  12. The perception gap remains stark Established vs. not established Respondents who… …believe Africa’s attractiveness has improved over the past year 73% 39% Established Notestablished …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% 10% Not established Established Source: EY’s 2014 Africa attractiveness survey (total respondents: 503). EY’s 2014 Africa attractiveness survey

  13. 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

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