sub-saharan africa: investors' final frontier rené awambeng, head of global corporates dr...
TRANSCRIPT
Sub-Saharan Africa:Investors' final frontier
René Awambeng, Head of Global CorporatesDr Edward George, Head of Group Research
Prague, December 2015
2
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
0
0.5
1
1.5
2
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
4
10 11 12 13 14 15e 16f-2
0
2
4
6
8
10
12
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.
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
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
5
The largest economies are driving high growth rates
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
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
39
55
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
7© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
Key Mid-stream Infrastructure - RefineriesNigeria to drive refinery development in the region
R
RR
R
R
R
R
R
R
R
R R RR RR
R
R
RR
RR
R
R
R
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%
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015 8
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
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015 9
Source: World Bank
1990 2000 20100
20
40
60
80
100
120 AngolaCote d'IvoireEthiopiaGhanaKenyaNigeriaSouth AfricaBrazilChinaIndiaRussia
Access to Electricity (% population)Electricity Consumption (kWh per capita)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
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).
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015 10
11
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
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
• 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.
12© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
13
Proposed regional/coastal corridors One-stop border posts planned by 2040
New trade corridors could unlock intra-regional trade
Source: Ecobank Research.
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
Africa-Asia trade flows
Ecobank is the ideal pan-African partner
© Ecobank 2015 | Sub-Saharan Africa: Investors' final frontier | René Awambeng & Edward George | December 2015
Any questions?