Sub-Saharan Africa: Investors' final frontier René Awambeng, Head of Global Corporates Dr Edward George, Head of Group Research Prague, December 2015

Sub-Saharan Africa:Investors' final frontier

René Awambeng, Head of Global CorporatesDr Edward George, Head of Group Research

Prague, December 2015

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Africa is not a country – it’s 55 countries

Source: Dreamstime.

© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015

Africa has a wealth of natural resourcesAfrica’s resource holding companies Africa’s leading oil producers, mn bpd, 2014

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Nigeria AngolaEquatorial Guinea Congo-BrazzavilleGabon Others

Sources: McKinsey, Ecobank Research.

© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015 3

Despite the global environment, Africa is still growing

Source: IMF

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Developing Asia Sub-Saharan Africa US EU

Real GDP growth, annual % change

• African growth is holding up well, outpacing all other regions, bar Developing Asia.

• In 2000-13 Africa’s CAGR reached 12%, only marginally behind Asia and the BRICS.

• Although growth has slowed, it will still average around 4% over the next two years.


Top Performers in 2015

Ethiopia 8.7%

DRC8.4%

Côte d’Ivoire 8.2%

Mozambique 7.0%

Kenya 6.5%

Senegal 5.1%

Angola 3.5%

Nigeria 4.0%

Ghana 3.5%

Top Performers in 2016

Mozambique 8.2%

Ethiopia 8.1%

Côte d’Ivoire 7.6%

DRC7.3%

Kenya 6.8%

Senegal 5.9%

Ghana 5.7%

Nigeria 4.3%

Angola 3.5%Source: IMF

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The largest economies are driving high growth rates


Purchasing power is rising, forging a consumer class

Source: McKinsey

2025 likelihood of reaching middle income status

AlreadyLikely

PossibleUnlikely

808 GDP per capita

Source: Devarajan & Fager “Is Africa’s growth sustainable, 2012”.

Sub-Saharan Africa’s population by income bracket percentage

5234

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7 92 1 Global (>$25,000)

Middle Income ($5,000-$25,000)

Basic needs ($1,000-$5,000)

Destitute (<$1,000)

2005 2015projection

6© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015

Opportunities - PipelinesHuge future pipeline capex awaits the region

• There are over 25,000 kilometres of oil, natural gas and petroleum product pipelines in West Africa. Gas carrying capacity is less than 5 billion cubic feet per day.

• Nigeria dominates, accounting for 73% of installed pipelines in the region but needs to develop almost 7,000 km of new capacity.

• Key pipelines:

• West Africa Gas Pipeline

• Abidjan – Yamoussoukro products pipeline

• Cote d’Ivoire – Ghana pipeline (planned)

• Trans Sahara Gas Pipeline (planned)

• Chad- Cameroon oil pipeline

• Niger – Chad oil pipeline (planned)

• Foxtrot gas pipeline

• The West Africa region requires investments of over $1.5bn annually in various pipelines.

Existing Gas Pipeline

Planned Gas Pipeline

Existing Oil Pipeline

Planned Oil Pipeline

Existing Products Pipeline

Planned Products Pipeline

Foxtrot gas field CIV

Abidjan CIV

Yamoussoukro CIV

Tema, Ghana

Lagos Nigeria


Key Mid-stream Infrastructure - RefineriesNigeria to drive refinery development in the region

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Active RefineryPlanned Refinery

Country Refinery Type Capacity StatusGhana Cox Oil (Takoradi) Topping 65 Funding discussionsNigeria Dangote cracking 660 Construction Nigeria Orient Petroleum Hydroskimming 20 Pre-constructionNigeria IPMAN - Bayelsa cracking 200 Funding discussionsNigeria IPMAN - Kogi cracking 200 Funding discussionsNigeria Epic cracking 100 Pre-constructionNigeria Vulcan Modular na 180 Pre-constructionCameroon IPR Refinery na 200 Funding discussionsGabon Port Gentil cracking 50 Funding discussionsAngola Lobito cracking 200 Pre-construction

• About 820 kbpd of capacity to be augmented with over 1800 kbpd of new capacity in next five years

• Refinery developments are difficult in Africa due to issues with regulation, feedstock, off-take and funding. Hence less than half of planned refineries are expected to be constructed

Existing Refineries in West Africa

Planned Refineries in West Africa

Countries Refinery TypeCapacity (000 bpd)

Capacity Utilization (000 bpd)

% of Total fuel consumption

Angola Luanda Hydroskimming 39 27.00 37%Cameroon Limbe Hydroskimming 70 33.94 106%Chad N'Djamena Hydroskimming 20 10.84 85%Congo Republic Pointe Noire Cracking 21 15.86 109%Cote d'Ivoire Abidjan Cracking 68 65.06 210%Gabon Sogaro Hydroskimming 23 15.84 102%Ghana Tema Cracking 60 9.06 13%Niger Zinder Cracking 20 16.34 171%Nigeria Kaduna Cracking 110 32.26 7%Nigeria Ogbele Topping 1 0.85 0.20%Nigeria Port Harcourt Cracking 210 19.28 6%Nigeria Warri Cracking 125 44.99 13%Senegal Dakar Hydroskimming 50 14.06 34%


Key Mid-stream Infrastructure - Storage

• West Africa has nearly 19 million cubic metres of liquids storage; most of which is concentrated in Nigeria (53%), Cote d’Ivoire (21%), Ghana (9%), Angola (4%) and Cameroon (3%).

• 82% of existing storage capacity is for petroleum products – mostly gasoline due to Nigeria followed by diesel. But tanks are often used interchangeably in some cases.

• Total products storage of 15.6 million cubic metres represents about 130 days of storage on the average with very wide disparity across countries.

• Growth rate in fuel consumption is estimated at over 4% in SSA over the next few years. This could increase demand for storage considerably in several countries – Ghana, Cameroon, Nigeria and Zambia

• LPG storage is really low at 2% of storage capacity despite rising LPG consumption. LPG consumption across the region has risen 11% in the past five years

Total Storage Crude Products LPG BitumenAngola 720,116 140,000 573,002 7,114 Cameroon 664,873 204,000 452,159 8,714 Chad 24,455 24,268 187 Congo-B 279,459 279,114 345 Burkina Faso 68,398 62,790 5,608 CAR 48,800 48,800 DRC 177,435 177,435 CIV 3,903,473 678,000 3,171,911 14,562 39,000 Nigeria 10,086,241 1,196,700 8,543,450 312,491 33,600 Senegal 784,613 220,000 556,163 8,450 Niger 150,250 142,250 8,000 Gabon 285,550 18,005 266,672 873 - Ghana 1,800,000 455,000 1,323,002 21,998

Breakdown of West Africa storage capacity by fuel, %

Storage Capacity in West Africa, by liquid, cubic metres

0%10%20%30%40%50%60%70%80%90%

100%

Crude Products


Source: World Bank

1990 2000 20100

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120 AngolaCote d'IvoireEthiopiaGhanaKenyaNigeriaSouth AfricaBrazilChinaIndiaRussia

Access to Electricity (% population)Electricity Consumption (kWh per capita)

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sub-Sahara AfricaBRICEUUS

The power sector needs sustained investment

• SSA, with a population of 800 million people, generates roughly the same amount of power as Spain, which has a population of 47 million people.

• Around 600 million people in Africa have no or very limited levels of electricity supply.

• There are huge opportunities to develop large-scale generation & distribution networks, as well as off-grid & renewable generation (especially for remote rural areas).


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Financing the value chain: from farm to fork

The key to a successful agricultural sector is knitting the value chain together:

• Inputs

Seed, fertiliser & pesticide

• Farmers & cooperatives

Training, financing, market for goods

• Agri-processors

Financing (working capital & capital investment)

• Logistics

Warehousing, ports, roads, railways, border crossing

• Traders & retailers

Financing

• Exporters & offtakers

Financing


• In 2012 an estimated US$45bn was invested in Africa’s infrastructure.

• The key sectors were energy (52%), transport (32%) and water (15%).

• China was the largest investor, with total flows of US$13.4bn (1/3 of the total).

• Development banks invested US$9.5bn, more than Europe & the Americas combined (US$6.3bn).

• The total invested falls well short of the estimated US$110bn that is required every year for the next decade to close the deficit.

Sources: Cbi, ICA.


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Proposed regional/coastal corridors One-stop border posts planned by 2040

New trade corridors could unlock intra-regional trade

Source: Ecobank Research.


Africa-Asia trade flows

Ecobank is the ideal pan-African partner


Any questions?

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Sub-Saharan Africa: Investors' final frontier René Awambeng, Head of Global Corporates Dr Edward George, Head of Group Research Prague, December 2015