understanding the east african market...doing business in east africa “quan&fying the...
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UnderstandingtheEastAfricanMarket‘Quan'fyingtheOpportunity’
EastAfricaCommunity(EAC)MemberCountries
SouthSudan
Uganda
Kenya
Rwanda
Burundi
Tanzania
EAC,COMESA,SADCMemberCountries
DoingBusinessInEastAfrica“Quan&fyingTheOpportuni&es”
Regional-Highlights
Region-fastestgrowinginAfrica,withagrowthrateof5.6%in2017.Ethiopiaistakingtheleadwitha10%growthrate.
KenyaisthefinancialandlogisRcalhuboftheregionanditsstrategiclocaRonservesasagatewaytoEastAfrica.MombasaportinKenyaisthebiggestportinEastAfrica.
ThenaRonalairline,KenyaAirways,fliestomorethan40AfricandesRnaRonsaswellasdirectflightstoEurope,AsiaandupcomingUS.
TheEastAfricanpopulaRonisgrowingatayearlyrateof3%,threeRmestheglobalaverage.ThegrowingpopulaRonandmiddleclassisresulRnginincreasedconsumerism,whichtogetherwithmegainfrastructureprojectsaretwofactorsthatwillfurtherbolstergrowth.
TheregionhasahighfocusonICT,whereKenyarecentlybecamethefirstcountryinAfricaand4thgloballyoutsideofUSAtohostaMicrosoXtesRngcenter.Itisalsohometotheworld-renownedM-pesa(mobilemoney)moneytransferservices,whichhasresultedinthehighestfinancialinclusioninAfricaandopennessforinnovaRon.
ThenaRonalairline,KenyaAirways,fliestomorethan40AfricandesRnaRonsaswellasdirectflightstoEurope,AsiaandupcomingUS.
RegionalReach
Na'onalDevelopmentPlansKENYAVision2030
Na'onalDevelopmentPlansUGANDAVision2040
AtransformedUgandansocietyfromapeasanttoamodernandprosperouscountrywithin30years
WithastableGDPof6.4%perannumAgricultureisthelargestcontributor(66.5%)followedbyservicesector(tourism)andindustry.
ThemainpillarsofVision2040are:• Agriculture• Oil&Gas• Energy• Transport&Infrastructure• Mining• IndustrializaRon• Science,Technology,EngineeringandInnovaRon
Na'onalDevelopmentPlansRWANDAVision2020
• TodevelopRwandaintoamiddleincomecountrybytheyear2020bytransformingitintoaknowledgebasedeconomythatiscompeRRve,regionallyandglobally
TheKeyPillarsofthevisionare:oGoodGovernanceoAnefficientstate
oSkilledHumanCapital,includingeducaRon,healthandinformaRontechnology.oAvibrantprivatesector
• oAworldclassphysicalinfrastructureoModernAgriculture
• Thestateshallactprimarilyasacatalysttoensureanadequatepolicyframeworkforinfrastructure,humanresourcesandguaranteelegalframeworkaregearedtowardssRmulaRngprivateinvestments
Keysectorsshallbe:ServiceSector;Healthcare&Humanresourcedevelopment
• Infrastructure;Energy,transport,Water&TelecommunicaRon
Na'onalDevelopmentPlansTANZANIAVision2025
Vision2025aimsatachievingthreeprincipalobjecRvesforTanzania:1) Highqualitylivelihood- EducaRonandgenderempowerment,Universalaccesstohealthcare- HumanResourceCapacityDevelopment2) GloballycompeRRveeconomy- PrivatesectorsRmulaRon- EstablishingasubstanRalindustrialsector- Achievingadequatelevelofphysicalinfrastructure- Energy-TelecommunicaRon-Water-ICT
Na'onalDevelopmentPlansETHIOPIAGrowth&Transforma&onPlan(GTP)
GTP5yearplanaimstoachieveindustrializaRonandimprovethecountry’seconomybyadainingaprojectedGDPgrowthof11-15%from2010to2015
KeygoalsoftheGTPareto:• Encourageforeigndirectinvestmentsinagriculture• Providebasicinfrastructureinfourindustrialclusterzones• Renewfocusonnaturalresourcesandrawmaterialindustriessuchas
gold,oil,gas,potashandgemstones• Increaseroadnetworksby10,000Kmsthroughoutthecountry• Builda1,500kmstandardgaugerailwaylineandcreate
manufacturingplantsforlocomoRveenginesandandrailwaysignalingsystems
• QuadruplepowergeneraRonfrom2,000MWto8,000MW,building• 82,500milesofnewpowerdistribuRonlinesandrehabilitaRng4,800
milesoftransmissionlines• Seekinvestmentinrenewableenergyprojectsinvolvinghydro,wind,
geothermalandbiofuels.• Increasemobiletelephonesubscribersfrom7millionto40million.
Na'onalDevelopmentPlans;SOUTHSUDAN
• SouthSudanisavastcountry(coveringanareaequaltoKenya,Uganda,RwandaandBurundicombined)witharelaRvelysmallpopulaRonofapproximately12million)
• Ithasabundantnaturalresources(includingoil,gold,Uranium,CobaltandRmber)andqualityagriculturallandwithplentyofwater,includinglakesriversandabundantrainfall
SouthSudanisarelaRvelyyoungcountryandthushighlyunexplored.BusinessopportuniResinclude:
• Mining• OilexploraRon
- Drillingstartedasrecentlyas1990’s• Agriculture
LargetractsofferRlelandprovideopportunityforlargescalefarming,livestockfarming,fisheries
• Energy• ForestryTourism
DEVELOPMENTS WITHIN INFRASTRUCTURE, MOBILE,AGRIBUSINESS AND RETAIL DRIVE BIGGEST ECONOMIC
GROWTH
Infrastructure
Becauseoflong-termpopula'ongrowthintheregionandhighcommitmentbymul'lateralfinanciers,infrastructureispriori'sedinordertobothfacilitateandleveragegrowingpressure.FinanciersallowsecureprocurementprocessesforIrishcompanies,forexamplewithinfibreop'ccablelaying,energyandtransportestablishments.
Mobile
Investmentscombinedwithagrowingyoungpopula'onhavinghighpurchasingpowerwillcon'nuetopushthetelecommunica'onsandICTsector.Expansionandmoderniza'onallowforIrishcompaniestoenterwiththeirhigh-technologicalandknowledgeablesolu'onsinthemobilemarket.
RetailAsthemiddleclasscon'nuestogrowinsizeandpurchasingpower,retailisaboomingsector.Thedemandforproductsbesidebasicneedshashugepoten'alforbusinessintelligence,realestate,sustainabilityproductsandstoreretailing.
AgribusinessAsthepopula'ongrowsintheregionandtheagriculturalsectorsgrowmoresignificantonGDPcontribu'onandemploymentagribusinessandagroprocessingandothervaluechaininvestmentwillcreatemoreinvestmentopportuni'es.
EASTERNAFRICAWILLEXPERIENCEAMONGTHE
HIGHESTPOPULATIONGROWTHINTHEWORLD
100% TOTAL = 273 MILLION (2015)
Ethiopia36%
Somalia4%
Uganda14%
Kenya17%
Tanzania20%
CHARACTERISTICS
• Eastern Africa is a dynamic region both compared to the rest of the African continent as well as the rest of the world, where population growth is flat or declining over the next 100 years
• Ethiopia, Tanzania and Kenya represent almost ¾ of population today
• The population is not only growing in size but also in purchasing power as the middle class steadily increases.
2020 2050 2100
POPULATIONSIZEPROJECTIONSINEA(MILLIONS)
305 593
1120
NaturalResourcesMapofEasternAfrica
MINING AND MINERALS EXPLOITATION
ICTTelephonyOpportunitesKenya–Mobilephonesubscribers–42.1subscribers
InternetAudience64%;agedbelow25years57%;aged25-34years.10%;55+andabove
64%
57%
41%
31%
10%
0%
10%
20%
30%
40%
50%
60%
70%
Under25Yrs 25-34Yrs 35-44Yrs 45-54Yrs 55+
InternetUsersbyAge
Source:GoogleConsumerBarometer,2016/InternetWorldStats,2017,CCK
ICT – MOBILE MARKET WILL CONTINUE TO GROW DUE TO INVESTMENTS MEETING THE INCREASING DEMAND
CHARACTERISTICS
Mobile market in Eastern Africa MOBILE PHONE AND MOBILE grew by an average `of 9,3% over INTERNET SUBSCRIBERS(MILLIONS the last 3 years Government and operators are committed in their
investments, e.g. Competitive environment in Tanzania due to foreign company investments Continued investments next-generation networks in Kenya is speeding up growth 31%37% 27% 19%23%
137151
161169
176
20152016201720182019
COUNTRIES WITH HIGH POTENTIAL ENERGY PROJECTS IN EASTERN AFRICA
ETHIOPIA;“Lookingtoadd10,000MWtothegridby2025”
Rwanda“ThegovernmentseekstoincreaseaccesstoelectricitybyJune2019to48%ofthepopulaRonon-gridand22%ofthepopulaRonwithoff-gridsoluRons”
KENYA“Geothermalisourimmediate
focus”
TANZANIA“ThecountryhasgeothermalenergyresourceesRmatedat4,000MW”
22.57
ENERGY PROJECT BUDGET OVERVIEW (USD BILLION)*
17,61
2,700,920,470,45
SOURCE:BUSINESSSWEDENINTERVIEWSANDANALYSIS
ETHIOPIA
KENYA
SOMALIA
SOUTH SUDAN
TANZANIA
RWANDA
BURUNDI
The Eastern Electricity Highway Project (First Phase of the Eastern Africa Power Integration Program)
2013 – 2019; Kenya, Ethiopia
The USD 1,3 billion project is to increase power-sharing, reduce costs and promote sustainable energy within a regional cooperation. Work is in progress promising subsequent phases to start soon.
Lamu Port - Southern Sudan - Ethiopia Transport Corridor (LAPSSET) 2012 – 2030; Kenya, South Sudan, Ethiopia
The USD 22,8 billion project is aimed at triggering economic activities and more than double Kenya’s GDP. Components include the Lamu port, Lamu-Ethiopia-South Sudan superhighway, Lamu-Juba-Addis Ababa railway line, an oil refinery and a 2240 km oil pipeline connecting oil fields in South Sudan to the refinery at the Lamu Port. SOURCES: WORLD BANK, AFRICAN DEVELOPMENT BANK
East Africa Railway projects 2012-018; Rwanda, Tanzania, Kenya, South Sudan
The first phase done while TANZANIA plans to connect South Sudan with Rwanda are well underway. Objective is to reduce transportation costs and thus improve trade routes through improving and interconnecting national railway lines across the region.
Regional Rusumu Falls Hydroelectric Project 2013 – 2020;
Burundi, Rwanda, Tanzania
The USD 470 million project aims at increasing power supply of electricity to the grids in all three countries.Components include access and construction of power facilities, generation substations and transmission lines.
INFRASTRUCTURE – CURRENT AND LONG-TERM HIGH-VALUE PROJECTS DEVELOPING THE REGION
MombasaPetroleumTradinghubwillbeamodernpetroleumterminalcomprisingtwoTradingHub-SingleoffshorepetroleumjetesBuoyMooring;AmodernGreenfieldPetroleumtankfarmwithadesigncapacityof800,000MTistobedevelopedinphasesfromaniniRalminimumcapacityof300,000MT.Mul'-PurposeDams• BasedonPPPAgreement,severalmulR-purposedamsshallbeconstructedintheLakeBasinRegionunderBOOTModel•Pre-FeasibilityStudyCompleteforNyanza,Kisumu&BungomaSitesSpecialEconomicZones(SEZs)TheprojectenvisagestohavevariousprojectsavailableforInvestorsbasedontheMasterplandevelopedbyCountyGovernments(47CounRes)Source;CountyIntegratedDevelopmentPlans(CIDPs)
• “Ofthetotal606,394whosatthe2017KCSE,69,151gotadmissiontouniversiRes.
• OpportuniResfortechnicaleducaRon
• GrowingMiddleClass;InternaRonalCurriculum
BIG 4 AGENDA - Opportunities HOUSING;• 200,000housingunitsrequiredannuallyforallincomelevels.• ProducRoncurrentlyatlessthan50,000unitsannually,• Housingdeficitofover2millionunit.Nearly61%ofurbanhouseholdslivingin
slums.• UrbanizaRonrateof4.4%,equivalentto0.5millionnewcitydwellersevery
year.
HEALTH;InexpensiveHealthcare
MANUFACTURING;Agroprocessing,Agribusiness,AgricultureValueChains
FOODSECURITY;• 2018,Kenya’spopulaRonforecast-51million• FeedingagrowingpopulaRon.
PaulOumaKenyaNa'onalChamberofCommerce&Industry(KNCCI)
Paulouma.homabaychamber.co.ke0722259855