renaissance capital · africa in 2010 by population the emerging markets investment firm 20 tunisia...

RENAISSANCE CAPITAL FRONTIER, EMERGING AND CONVERGING MARKETS

The emerging markets investment firm

THE FASTEST BILLION

The emerging markets investment firm

www.fastestbillion.com

Available also on Amazon

November 2012

PRIVATE & CONFIDENTIAL

Twitter : @RencapMan

@NdebeleNothando

@YvonneMhango

http://www.fastestbillion.com/http://www.fastestbillion.com/

GDP GROWTH KNOWS NO RELIGIOUS, ETHNIC, CLIMATE OR

CONTINENTAL BARRIERS

The emerging markets investment firm 2

0

5,000

10,000

15,000

20,000

25,000

30,000

1

18

20

18

25

18

30

18

35

18

40

18

45

18

50

18

55

18

60

18

65

18

70

18

75

18

80

18

85

18

90

18

95

19

00

19

05

19

10

19

15

19

20

19

25

19

30

19

35

19

40

19

45

19

50

19

55

19

60

19

65

19

70

19

75

19

80

19

85

19

90

19

95

Catching up is a global phenomenon - per capita GDP since 1820

United Kingdom

France

Germany

United States

Argentina

Chile

Japan

South Korea

Thailand

Singapore

India

WHY NOW ?


BETTER GOVERNMENT FINANCES?


0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Govt debt / GDP ratio (SSA in bars, G-7 as a line)

BETTER FISCAL POLICIES?


-11

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Budget balance as % of GDP (SSA in bars, G-7 as a line)

WAS IT CHINA ?


-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total exports (US$m) from Africa

N Africa

SA

SSA

AFRICA RUNS A TRADE SURPLUS WITH CHINA


-10,000

10,000

30,000

50,000

70,000

90,000

110,000Africa's 12-mo imports from China ($bn)

Africa's 12-month exports to China ($bn)

Africa's trade balance with China ($bn)

THE RISE OF FOREIGN DIRECT

INVESTMENT BEGAN BEFORE CHINA


0

2

4

6

8

10

12

0.0

2.0

4.0

6.0

8.0

10.0

12.0

FDI into Africa (% GDP)

Africa (LHS) Eastern Africa Middle Africa Northern Africa Southern Africa Western Africa

WAS IT NEW OIL DISCOVERIES?


-

50

100

150

200

250

19

65

19

66

19

67

19

68

19

69

19

70

19

71

19

72

19

73

19

74

19

75

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Value of SSA oil production in $bn

$bn in 2011 dollars

MORE OIL PRODUCTION IS ON THE WAY


0

2,000

4,000

6,000

8,000

10,000

12,000

Angola

Nigeria

Other SSA (incl Chad,Sudan)

Libya

Algeria

Egypt+TunisiaNORTH AFRICA

SUB-SAHARAN AFRICA

FORECASTS

AFTER 2011

WAS IT NEW MINING PROJECTS?


0

100

200

300

400

500

600

700

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Guinea Rio Tinto/Chalco Guinea Vale/BSGR Congo, Rep of, African Iron Sierra Leone, African Minerals/Shandong Guinea Bellzone/CIF

Guinea Bellzone Cameroon/Congo, Rep of, Sundance Res Congro, Rep of, Xstrata/Zanaga Gabon, Core Mining Congo, Rep of, Core Mining

Sierra Leone London Mining Sierra Leone Severstal/African Aura Cameroon Arcelor Mittal Congro, Rep of, CMEC Liberia Tata Steel

Senegal BHP Billiton Gabon, Wuhan iron & Steel Co (WISCO) Cote d'Ivoire, Arcelor Mittal/SNIM Liberia, SNIM Liberia, Xstrata/SNIM

Mauritania, Xstrata

ACTUALLY MOST GROWTH HAS COME FROM SERVICES


53

16

14

8

7

1

0 10 20 30 40 50 60

Services

Agriculture

Mining and quarrying

Construction

Manufacturing

Gas, electricity and water

Sector share of change in real GDP, 2002-2009

SO IT WAS TELECOMS ?


0%

20%

40%

60%

80%

100%

120%

140%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2005 2010 2015 2020E

Mobile subscribers ('000) (LHS) SIM penetration (RHS)

BANKING STILL HAS ROOM TO BOOM


0

20

40

60

80

100

120

140

160

180

200

220

(% o

f G

DP

)

Private sector debt (household and corporate) as % of GDP in 2011 (Source, IMF)

High debt in rich countries

and ... China

African countries

have low debt levels

PERHAPS IT IS DEMOGRAPHICS


-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

2000 2010 2020 2030 2040 2050

15-24 years olds (source UN)

Eastern Europe

Eastern Asia

South Asia

SE Asia

SSA

Latam + Caribbean

Northern Africa

EDUCATION IS A CRUCIAL FACTOR


0

20

40

60

80

100

120

Brazil SouthAfrica

Russia Mexico Turkey China Indonesia India Africa SSA exclSA

Nigeria Kenya

Around 1975

Around 1990

Around 2005

Secondary school enrolment (UN)

EASE OF DOING BUSINESS REFORMS


Before (Nigeria) and After

(Mauritius)

EASE OF DOING BUSINESS REFORMS –

DAYS TO START A BUSINESS (WB, 2012)


0

20

40

60

80

100

120

140

160

180

Co

ngo

, R

ep

.

Vene

zu

ela

Bra

zil

Zim

ba

bw

e

Ango

la

Na

mib

ia

DR

C

Bots

wan

a

Sw

azila

nd

Indon

esia

Vie

tnam

Guin

ea

Le

so

tho

Ma

law

i

Seych

elle

s

Ch

ina

Suda

n

Phili

ppin

es

Sri L

anka

Nig

eri

a

Ug

and

a

Kenya

Cô

te d

'Ivo

ire

Ru

ssia

India

Tan

za

nia

Arg

entina

Alg

eri

a

Pakis

tan

Bang

lad

esh

South

Afr

ica

Zam

bia

Ca

mero

on

Germ

any

Buru

nd

i

Mo

za

mb

iqu

e

UK

Gha

na

Mo

rocco

Sie

rra L

eon

e

Ca

pe V

erd

e

Tun

isia

Gre

ece

Eth

iopia

Ma

dag

asca

r

Ma

li

Egypt

Ma

uritius

US

A

Bela

rus

Sene

gal

Rw

anda

Geo

rgia

2004 2012

MOST LIVE IN DEMOCRACIES (AFRICA GDP IN 2012)


Morocco

Tunisia

Algeria Egypt

Libya

W.S Niger

Mauritania Chad

Mali Sudan

C.V

Burkina Faso Eritrea

GambiaSenegal

South Sudan Djib.

G-B

Guinea Nigeria

S-L Ghana Ethiopia

Benin

Lib. Somalia

Togo Uganda

Cote D'Ivoire

CAR Kenya

Rw.

B.

Cameroon

1 box = US$1bn Tanzania

1 box = total GDP less than US$0.5bn STP Eq Guinea

Blank box = No available GDP data

Gabon

Nigeria - as per Renaissance assumptions post the 2012 GDP revision DRC

LEGEND Seychelles

Congo

Strong autocracy Malawi

Strong democracy

Weak autocracy

Weak democracy Madagascar

Zambia Moz.

Mauritius

Angola

Zimbabwe

Swazil.

Botswana

Namibia

South Africa $419bn and Nigeria $370bn we assume after the GDP revision, compared with Thailand ($377bn), Colombia $378bn and Venezuela $337bn

Egypt at $257bn and Nigeria at $273bn before the GDP revision, compre with Singapore at $270bn and Geece at $271bn

Angola at $121bn or Morocco at $100bn compare with Bangladesh at $118bn, Hungary at $129bn or Vietnam at $135bnSouth Africa

Les.

AFRICA IN 2010 BY POPULATION


Tunisia

Morocco Egypt

Algeria Libya

W.S Niger

Mauritania Chad

C.V Mali Eritrea

Senegal Burkina Faso

Gambia Djib.

Sudan

G-B

Guinea

Cote D'Ivoire Ethiopia

Sierra Leone Ghana Cen. A R South Sudan Som.

Liberia Benin Nigeria

Togo

Uganda

Kenya

Cameroon

Rwanda

Eq G.

STP Tanzania

LEGEND Gab.

Congo Dem Rep of Congo Burundi

Strong autocracy

Strong democracy

Weak autocracy

Weak democracy Seychelles

Angola

Malawi Madagascar

Zambia

Mrt.

Nmb. Bts. Mozambique

Zimbabwe

Swz.

Lesotho

South Africa

CORRUPTION LINKED TO PER CAPITA GDP


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Qata

r

Sin

gapo

re

Un

ite

d S

tate

s

Austr

ia

Belg

ium

Irela

nd

Japa

n

Taiw

an

Spain

Kore

a (

Sou

th)

Czech R

epu

blic

Om

an

Lib

ya

Pola

nd

Ru

ssia

Bela

rus

Arg

entina

Cu

ba

Uru

guay

Gab

on

Ro

man

ia

Bra

zil

Jam

aic

a

FY

R M

ace

don

ia

Ch

ina

Turk

men

ista

n

Ukra

ine

Gua

tem

ala

Arm

enia

Ango

la

Jord

an

Indon

esia

Boliv

ia

Ho

ndu

ras

India

Phili

ppin

es

Mo

ldova

Pakis

tan

Nic

ara

gua

Nig

eri

a

Ca

mero

on

Ma

urita

nia

Ha

iti

Ch

ad

Kenya

Ug

and

a

Ma

li

Sie

rra L

eon

e

Mo

za

mb

iqu

e

Eth

iopia

Eritr

ea

Lib

eria

Zim

ba

bw

e

Corruption index Per capita GDP

05000100001500020000250003000035000400004500050000

0.01.02.03.04.05.06.07.08.09.0

10.0

AverageCorruption index

Per capita GDP(above thislevel)

A TYPICAL FORECAST WOULD BE THIS


-2

-1

0

1

2

3

4

5

6

7

8

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

Real GDP % change and 10-year moving average (IMF)

SSA GDP

SSA 10 year rolling average GDP

OURS IS THIS ….AFRICA AS INDIA AS ASIA


-6

-4

-2

0

2

4

6

8

10

12

14Real GDP % change 1960-2042 (IMF, Renaissance, Reserve Bank of

India)

India 1960-2012

SSA

Developing Asia 1980-2012

Linear (India 1960-2012)

Linear (SSA )

FASTEST BILLION - NIGERIA


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

20

41

20

42

20

43

20

44

20

45

20

46

20

47

20

48

20

49

20

50

Nigeria GDP in $bn (2012 dollars)

Germany

Brazil / UK

Russia / Italy

India

Spain

Indonesia

Saudi Arabia

SA

Japan When will Nigeria overtake the 2012

GDP of the following?

THE AVIATION BOOM


-

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

Air transport, passengers

Air passenger traffic in Africa as implied by per capita GDP correlations

2010 2020 2030 2040 2050

MOTOR VEHICLE SALES


-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

2010 2020 2030 2040 2050

Motor vehicle stock (lhs) and annual sales (rhs) as implied by per capita GDP correlations

Stock of vehicles in Africa

Annual car sales (rhs)

AFRICA GDP IN 2050


GDP of AFRICA in 2050 (US$bn, in 2012 dollars) with each box representing $20bn of GDP - as forecast by Renaissance Capital, with colours reflecting Renaissance Capital forecasts of political change

Morocco

Tunisia Egypt

Algeria

Libya

Chad

WS Niger Eritrea

Sudan Djib.

Mauritania

C.V Mali Somalia

Senegal

Gambia Ethiopia

Burkina Faso South Sudan

Benin Nigeria CAR

G-B

Guinea

Ghana Togo

Cote D'Ivoire

S-L

Liberia

Uganda Kenya

STP Rwanda

Cameroon

LEGEND ST&P Burundi

Eq Guinea

Strong autocracy Tanzania

Strong democracy

Weak autocracy

Weak democracy Gabon DRC

Congo

Seychelles

Malawi Mad.

Zambia

Moz.

Angola Mauritius

Zimbabwe

Botswana

1 box = US$20bn

Namibia Swazil.

SA

Les.


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and is not and should not be construed as a recommendation or an offer or a solicitation of an offer of securities or related financial

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Descriptions of any company or issuer or their securities or the markets or developments mentioned in the Communication are not

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renaissance capital · africa in 2010 by population the emerging markets investment firm 20 tunisia...

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