The African Growth StoryApex Brasil

25 August 2014

Africa’s economyThe continent’s rise is real

Source: IMF World Economic Outlook Database, April 2014.

The size of the African economy has trebled in a decadeGDP, current prices (US$b)

2000 2004 2007 2009 2011 2012 2013 2014* 2016* 2018*

362.4 568.0889.9 964.8

1,314.4 1,344.0 1,393.7 1,471.0 1,694.41,970.8

251.1285.3

447.1523.3

614.9 689.9 697.7 725.7

898.6

1,060.1

North Africa SSA* Estimates

613.5853.3

1,337.11,488.1

1,929.3 2,033.9 2,091.42,196.7

2,593.0

3,030.9

2,737.4

2,535.8

2,249.2

1,870.7

Note: these numbers exclude the recent rebasing of the Nigerian economy.

EY’s 2014 Africa attractiveness survey

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 perceptionsA dramatic improvement

Respondents citing an improvement in Africa’s attractiveness as a place to do business

Attractiveness over the past year

Attractiveness over the next three years

60%73%

+4 pointsChange vs. 2013 survey

+1 pointChange 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

SSA 19.5% CAGR since 2007

Pre-crisis aver-age

(2003-07)

2007 2008 2009 2010 2011 2012 2013

225.6 213

524 486 460647 593 621164 196

352259

215

218181 129

North Africa SSA

FDI projects in Africa

EY’s 2014 Africa attractiveness survey

Source: fDi Intelligence.

East, Southern and West AfricaFDI growth spreads across

Source: fDi Intelligence.

EY’s 2014 Africa attractiveness survey

Southern AfricaCAGR: 14%Share: 33%

East AfricaCAGR: 23%Share: 17%

West AfricaCAGR: 28%Share: 17%

New FDI hotspots are emerging in Africa

CAGR (2007-13)

South Africa Mozambique Kenya Tanzania Uganda Rwanda Ghana NigeriaZambia

17%

33% 31%

40%

23%20%

6%

51%

19%

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

Presentation title

Coherent regional blocs can be configured in different ways, for e.g.:

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.

1

2

34

6

5

Urban hubs and clusters are the emerging markets of the future

Source: fDi Intelligence; EY’s 2014 Africa attractiveness survey (total respondents: 503).

Top 15 African states/provinces for FDI projects (Share of total FDI projects)

EY’s 2014 Africa attractiveness survey

Respondents who…

…believe Africa’s attractiveness has improved over the past year

73% 39%

…believe Africa’s attractiveness will improve over the next three years

87% 51%…have a specific strategy for investment in Africa

67% 10%

Established Not established

Established Not established

Established Not established

Source: EY’s 2014 Africa attractiveness survey (total respondents: 503).

EY’s 2014 Africa attractiveness survey

The perception gap remains starkEstablished vs. not established

”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

Perspective is importantConsciously choose a glass half-full perspective