by Duncan BonnettAfrica House

Project, Trade and Investment Trends in Sub-Saharan Africa

Presented to Amcham, 3rd August 2017

Who are we?

• Africa House represents the merger between two companies recognised as leaders in their fields:

Whitehouse & Associates and Africa Project Access. Working exclusively in sub-Saharan Africa, we offer

insight and access into the African trade and project environment through the provision of intelligence on

projects and bespoke research on expansion opportunities in growing markets.

• Our Services:

• Africa House provides:

• Projects: On-going research and intelligence on greenfield and brownfield projects to a dedicated

subscriber base

• Trade: Market and partner identification, export strategy development and commercial feasibility

• Access: To the world’s fastest growing markets through a team that has worked in 30 countries across the

continent over a period spanning 30 years

• Insights: What is driving the continent and targeting regions of high opportunity going forward.

Some of the ways we can help you• Market Strategy development: Understanding where your

markets are and how best to access these markets. This would include:

• Market Identification and Analysis

• Trade flow analysis – product and country specific

• Ranking market attractiveness

• Assessing competition

• Understanding export market environments

• Barriers to entry

• Distribution and logistics

• Partner identification

• Independent and Lenders Market Assessments

• A basket of subscriber services including identification ofproject opportunities and supply of project intelligence

• Coordination (and inclusion if required) of in-market visits

• Group visits to Development ‘Hotspots’

• Sub-group Meetings on key topics for Africa House Subscribers

Key Development Drivers

AgricultureSelf-Sufficiency and

Export Dividend: Move towards large-scale

projects, downstream processing

Lack of road infrastructure, dams &

irrigation, storage facilities, cold chain logistics, processing facilities – PPP opps,

developer partnerships

Extractives: Stranded

Resources

Increased extractives and processing activity: Unlocking mineral

potential of remote areas, using these as anchors for expanded ancillary

development

Lack of infrastructure: Roads, rail, power, ports. Push for services – fleet maintenance, building

materials retailers, town planning, retail, utilities,

logistics corridors

In many countries and regions, the drivers below are inextricably linked to corridors – either by design or fortune. As such, corridor development and ‘anchor tenants’ or projects are once again becoming critical in Africa’s development story.

Sector Historical BlockageAspiration

Su

stain

ab

le Jo

bs

Key Development Drivers

Urbanisation & Rising Incomes

Modern Towns and Cities, expanded formal areas:

Property Development (all types), Healthcare, Wholesale

and Retail space (incl. Franchise and distribution),

IDZ, urban transport infrastructure

Lack of urban Masterplan, Legal environment, property

ownership, Built environment capacity –congestion and roads;

IndustrialLack of Finance, Market access , scale, foreign

competition, skills, lack of reliable utilities (esp. power and transport), lack of roads;

Reduce Dependence on Imports: Rapidly developing cement, building materials

industries, downstream agri-industrial, value-added

mineral processing;

ICT, Telecoms &

Power

Lack of Finance, Need for ancillary infrastructure,

Market access and prohibitive regulatory

environments, low income levels,

Provide Enabling Environment for Other

Sectors: Rapidly developing cell networks, SOE & IPP activity, corporate and

private electronics consumption

Sector Historical Blockage Aspiration

Su

stain

ab

le Jo

bs

Regional Growth: More Nuanced• Growth for SSA at 5.8% to 2022 looks reasonable after

the downturn from 2014 to 2017;

• Remove Big 3 laggards – SA, Nigeria and Angola, and it’s far better;

• East Africa driving growth – reginal economy has not contracted at all, whereas every other region has;

• Largely because it’s not an extractives dependent region, with mining and oil & gas only now starting to become of some importance;

• With SA and Nigeria excluded from regional data, East Africa emerges as the largest regional economy by 2018;

• Southern Africa, even excluding SA, is the worst performing major region:

• Angola, Mozambique, Zambia, DRC all hit by commodity price declines and Zimbabwe, Swaziland, Malawi a combination of commodity prices, drought and governance;

• West Africa, outside of Nigeria, looks relatively good, with the regional GDP growing from US$150bn in 2015, to reach US$241bn by 2022 – critical that stability is maintained in order for this progress to be consolidated;

• Central Africa is the smallest regional economy, but ticks along and is expected to maintain growth of around 3.5% a year – much of it driven by regional gateway Cameroon;

Source: IMF, WEO Report, April 2017

Growth by Sub-Region 2015 2016 2017 2018 2019 2020 2021 2022

CAGR: '15-'22

GDP, SSA 1,600 1,513 1,609 1,769 1,946 2,104 2,234 2,377 5.8%

GDP, Excl SA, Nigeria, Angola

689 717 769 836 911 995 1,086 1,189 8.1%

Central Africa 78 75 75 79 83 88 93 99 3.5%

East Africa 266 284 322 359 403 451 503 563 11.3%

Southern Africa (Excl. SA)

299 292 328 353 372 392 414 437 5.6%

West Africa (ExclNigeria)

150 161 165 179 192 207 224 241 7.1%

By 2022: 6 economies over US$100bn;4 more over US$50bn

Continuation of Infrastructure-led Growth

• Infrastructure spend in Sub-Saharan Africa will grow by 10% a year over the next decade, exceeding US$180 billion by 2025;

• Nigeria and South Africa dominate the infrastructure market, but countries including Ethiopia, Ghana, Kenya, Mozambique, and Tanzania also look good;

• Overall infrastructure spending in Nigeria is expected to grow from $23 billion in 2013 to $77 billion in 2025. A more investor-friendly environment towards oil investment is also likely to boost this projection further. In SA, this figure may reach US$60bn;

• A major increase in spending in basic manufacturing is underway in Sub-Saharan Africa. Annual spending in the chemical, metals and fuels sector is forecast to increase across the seven major African economies to $16 billion, up from about $6 billion in 2012.

• Evident in the cement sector, where currently in excess of 75 greenfields and brownfields projects are underway, under consideration or recently completed;

• The region will spend increasing amounts of money on utilities, where an annual rate of 10.4% between now and 2025 is forecast;

• Rail spend is expected to need US$93bn in the foreseeable future, with power estimated at almost US$50bn a year required;

• Oil and gas extraction activity and infrastructure spending are expected to vary across countries and regions. Extraction spending in sub-Saharan Africa is projected to increase at 8% annually over the next decade. The bulk of spending is likely to take place in South Africa and Tanzania.

Source: PWC Infrastructure Analysis, Africa House

Project Activity: Current and Future (US$ Millions)

• Data is from Africa House Project Database;

• Many more projects, but without defined values as yet;

• Nigeria has abundance of projects, as does SA:

• Both in weak economic position, however;

• ‘Energy Axis’ from Mozambique to Ethiopia providing excellent long-term opportunities;

• Strong regional project focus in Southern Africa and East Africa – integration of infrastructure;

• Ghana, Guinea, Cote d’Ivoire add to West Africa’s basket – seeing signs of more co-ordinated regional approach there too;

• Central Africa largely revolves around Cameroon and regional projects;

Nigeria, 120,258

South Africa, 108,298

Mozambique, 102,366

Tanzania, 49,105

Southern Africa, 47,014 Kenya, 40,306

East Africa, 38,574

Ghana, 31,631

Ethiopia, 28,281

DR Congo, 23,542

Uganda, 22,786

Angola, 19,741

Guinea, 18,436

Zimbabwe, 16,352

West Africa, 14,606

Côte d'Ivoire, 14,091

Djibouti, 9,630 Cameroon,

6,495

Central Africa, 6,459

Zambia, 5,945

Others, 44,392

Project Activity: Current and Future (US$ Millions)

• Transport, Oil & Gas and Power account for 70% of declared value of projects:

• Sectors are critical to African industrial development and growth, as well as trade competitiveness;

• Agriculture seeing a resurgence in interest:

• Basic foods, export crops and value-added for domestic, regional consumption;

• Mining has seen many projects ‘parked’ recently, due to commodity crisis:

• Seeing beginnings of uptick;

• ‘Urban Development’:

• Construction, property, healthcare, water & sanitation, Integrated Urban development, accounts for 10.5% of the total or US$81bn – a definite growth area across the region;

Transport, 201,990

Oil & Gas , 184,540

Power, 148,526

Agriculture, 71,025

Mining, 46,007

Construction & Commercial

Property, 34,052

Health, 17,577

Water & Sanitation,

16,134 ICT, 15,717

Industrial, 13,225

Integrated Urban

Development, 12,903

Logistics, 6,354

Education, 196

19

17

18

7

9 10

8

12

13

1

3

5

20

19

17

18

16

14

7

9

15

11

10

812

13

21

12

34

5

6

22

23

24

25

26

27

28

29

30

• 2015: • >30 Plants operating or under construction or planned;• Total capacity of >30Mtpa;• Lower prices, better availability, booming development;• Development includes:

• Roads, dams, bridges, ports, airports, schools, clinics etc;

• Housing – upmarket, middle income and entry level;

• Commercial and retail property, industrial property;

• 2010: • 12 Operational Plants;• Total capacity of 10.3Mtpa;• Generally old plants, unreliable – region heavily

dependent om imports;• High prices, lack of availability stifled development;

EAC: • Region is integrating

quickly;• At many levels –

investment, infrastructure, logistics, policy;

• Cement sector is bellwether for overall development;

Aspirational? Doha – pre and post Gas Boom

• Could Africa emulate this in the new oil and gas frontier markets?

• Already happened in Luanda, Lagos to an extent;

• Maputo, Nacala, Dar es Salaam, Addis Ababa, Lusaka, Nairobi, Lubumbashi, Accra and other cities in resource-driven economies all growing at 6% to 7% a year and above;

• Nigeria has 51 new hotels under construction or in the pipeline – Lagos has more than SA, Kenya and Uganda combined

• Potentially new cities to develop in Mtwara, Pemba, Arusha, San Pedro, Lake Albert, Kolwezi, Pointe Noire, Port Harcourt and Takoradi;

• Mozambique has announced development of new port city in Cabo Delgado to support oil activities – 18,000ha development;

• Mtwara Masterplan already sees development from port to Lindi, 100km to the north;

• Development depends to a large degree on adequate power being available;

• New city planning has become a key feature of most countries’ development planning;

• Environmental sensitivities in remote locations, especially with regard to reefs and fishing rights in coastal areas;

Source: Blazepress.com

TANZANIA

BURUDI

EQUATORIAL

GUINEA

ANGOLA

REP OFTHE

CONGO

Zanzibar

MALAWI

ZAMBIA

MOZAMBIQUE MADAGASCAR

ZIMBABWE

BOTSWANA

SWAZILAND

LESOTHO

SOUTH

AFRICA

NAMIBIA

ANGOLA

NIGER

CHADSUDAN

ETHIOPIA

DJIBOUTI

ERITREA

UGANDASOMALIA

KENYADEMOCRATIC

REPUBLIC

OF THE CONGO

CENTRALAFRICANREPUBLIC

RWANDAGABON

NIGERIA

CAMEROON

Berbera

TUNISIA

WESTERNSAHARA

ALGERIA

MALI

LIBYAEGYPT

BENIN

TOGOCOTEDTVOIRE

BURKINA

GUINEA

SENEGAL

GHANA

LIBERIA

MAURITANIA

SIERRALEONE

GAMBIA

GUINEABISSAU

THE

MOROCCO

SOUTHSUDAN

Diamonds

Gold

Bauxite

Cobalt

Copper

Iron Ore

Nickel

Palladium

Platinum

Tin

Coal

Oil & Gas

Urbanisation / Trade / Industry

Areas of intense or growing development

Extractive and Socio-industrial development nodes

Africa House analysis based on US Geological Survey statistics

Energy Belt:From SA to Ethiopia a combinationof coal, renewables, geothermal,

oil and gas driving development

Extractives Play:Growing mining and oil developments

• Growing alignment of resourcesand populations, infrastructure;

• Long-term development is key, not short-term opportunism;

TANZANIA

BURUDI

ANGOLA Zanzibar

MALAWI

ZAMBIA

MOZAMBIQUE MADAGASCAR

ZIMBABWE

BOTSWANA

SWAZILAND

LESOTHO

SOUTH

AFRICA

NAMIBIA

ANGOLA

SUDAN

ETHIOPIA

DJIBOUTI

ERITREA

UGANDA SOMALIAKENYA

DEMOCRATIC

REPUBLIC

OF THE CONGORWANDA

Berbera

SOUTHSUDAN

Comoros

Mauritius

Seychelles

Key Corridors: Aligned to Development Growth Nodes

Northern

Dar es Salaam

Central

Nacala

Beira

Maputo

North-SouthTrans-Kalahari

Trans-Caprivi

Trans-Cunene

Lobito

NW Corridor

Development Driver

Oil and Gas

Mining

Urbanisation

Logistics & Urbanisation

Cape-Kinshasa

• Most of the key corridors in SADC and East Africa are aligned to resource hotspots or major urban developments;

• Increasingly, the developers of resource projects are demandingthat suppliers are in situ;

• This provides both a headache and an opportunity:• Servicing from SA less likely;• But establishing a presence in-country (not necessarily

on the actual corridor in each case) can offer advantages;• Governments are pressurising anchor developers to

source locally – and developers are demanding suppliers locate locally;

Djibouti-Addis-LAPSSET

Ruvuma Basin:• Oil and Gas not the only potential:• World Class graphite deposits straddle the border –

also manganese and uranium potential;• Iron ore and power potential in both countries; • O&G development from Lindi to Pemba – already

seeing local companies looking at integrated operations;

• Possible links to Malawi?

‘Coalbelt’:

• Northern RSA and Botswana through Zim and Tete – possibly Malawi and Southern Tanzania;

• Nacala Corridor is developing into a Harare-Tete-Malawi-Nacala integrated zone already;

• Iron ore and steel potential in both Tete and Southern Tanzania;

• Opening up Harare-Tete corridor as well as Tete-Zim-Zambia:

• Potential to secure copper exports from ‘Copperbelt’?

?

Copperbelt:• Development of NW Rail is direct

competition to Mozambican routes; • Eventually, Kolwezi-Angola route will

open, possibly concessioned? • Already seeing diversion of cement and

other building materials away from Katanga from Zambia and into Angola;

Walvis Bay: SADC Gateway• Positioning itself as gateway for

Zim, Botswana, Copperbelt;• Already seeing consumer goods from

Brazil, EU routed from Walvis to Katanga,rather than supply from SA;

• 109 trucks currently on route to DRC throughWalvis – sourced in EU

• ‘Namgola’ already supplied via this route;

Opening of SADC Region through Corridors:

SA to Angola/DRC:• From Cape Town & JHB, possible to

road to Luanda and Kinshasa;• Offers far faster turnaround than Matadi;• Lifeline for SA suppliers?

Gauteng, Durban & Maputo:• Katembe Bridge to open S. Maputo;• Potential to develop route from RB

& Durban as key route;• Gives SA’s two key hubs direct road

access to Southern Mozambique;

Kazungula:• Key intersection between Botswana,

Zambia, Zimbabwe and Namibia, with Angola’s southern provinces accessible too

Opening of Region through Corridors: SADC

• Currently around 53% of regional trade originates in SA and 29% is destined for SA:

• Very heavy reliance on north-south routes, both land and sea;

• Completion of Kazungula Bridge and road and rail routes aligned to this will reinforce Gauteng to Copperbelt route;

• Key East-West trade involves axis from Namibia to Mozambique, but largely SA, Zimbabwe and Malawi with Mozambique, and Zimbabwe, Botswana with Namibia

• Walvis Bay becoming transit point for supplies into Copperbelt (both sides), Botswana and Zimbabwe;

• Mining industry in Namibia increasingly using Walvis, potential for coal exports;

• DRC mining industry sourcing goods through Walvis – 109 trucks to new mine from EU;

• Lobito Corridor could re-route significant volumes of trade such as copper, cement, chemicals, industrial inputs,

fuels away from Zambia and SA to Angola;

• Could be between 3Mtpa and 4Mtopa of copper and cobalt product at play – with transporters looking for backhaul to Copperbelt;

• Possibly consumer goods as well – especially bulk goods from Brazil, EU, Turkey etc;

• Similar situations in Mozambican corridors and hinterland – less reliance on SA infrastructure and suppliers;

• Industrial parks and development hotspots forcing suppliers to locate directly in these development areas:

• Good expansion opportunity, but also a threat to those companies not willing/able to;

• This trend will grow along with resource nationalism and local content requirements;

• Already happening in Mozambique, Tanzania, Angola, Uganda, Zambia and other countries;

South Africa's 2016 Export Basket by Broad Economic Zone (ZAR Bn)

• 28% of all SA exports go to Southern and East Africa by value (30% to Sub-Saharan Africa);• 35% of all value-added exports from SA go to S&E Africa;• Underlines the importance of Africa to SA exporters;• Reinforces the fact that our products meet the needs of the market –

but also that there is potential to expand beyond these ‘comfort markets’

Sector

Tripartite Countries

Other Africa

EUOther

EuropeNAFTA

LatAM & Carib

South Asia East Asia ME & CA Oceania TotalTripartite Share (%)

Total 289.27 27.30 250.50 20.67 88.20 15.06 56.49 232.03 43.03 12.84 1,035.39 27.9

Mineral Products 44.65 5.20 24.71 4.26 7.07 2.32 39.10 82.27 5.80 0.82 216.20 20.7

Vehicles aircraft, vessels 27.97 2.79 70.82 1.15 19.91 3.75 0.59 11.49 3.55 5.60 147.61 18.9

Products Iron & Steel 27.32 1.97 21.42 3.49 14.53 3.18 4.91 48.80 6.58 1.16 133.35 20.5

Precious Metal 8.13 0.01 45.62 7.65 18.72 0.49 1.01 42.22 8.03 0.07 131.93 6.2

Machinery 48.59 5.22 24.10 0.54 10.33 1.54 2.53 5.29 3.49 1.19 102.80 47.3

Chemicals 28.97 2.50 12.24 0.18 7.57 1.81 2.32 8.15 2.62 1.11 67.47 42.9

Vegetables 15.58 1.78 21.42 2.25 3.10 0.12 1.07 8.66 6.04 0.33 60.34 25.8

Prepared foodstuffs 26.44 2.51 9.16 0.76 2.50 0.41 0.16 4.20 2.05 0.81 49.01 54.0

Plastics & Rubber 14.61 2.91 2.39 0.06 0.74 0.60 0.15 1.84 0.29 0.27 23.87 61.2

Wood pulp & paper 7.06 0.50 3.00 0.01 0.40 0.16 2.86 8.15 0.13 0.20 22.47 31.4

Textiles 8.62 0.26 2.57 0.04 0.43 0.15 0.21 3.38 0.21 0.35 16.23 53.1

Live animals 6.84 0.25 3.79 0.08 0.48 0.03 0.11 2.17 0.99 0.31 15.05 45.5

Photo & medical 4.36 0.57 2.18 0.08 0.65 0.11 0.35 0.33 0.52 0.11 9.28 47.1

Toys, Sport goods 6.29 0.41 1.16 0.02 0.27 0.05 0.06 0.08 0.19 0.10 8.64 72.8

Wood Products 2.96 0.11 0.48 0.01 0.11 0.00 0.55 2.50 0.10 0.19 7.01 42.3

Stone & Glass 3.69 0.16 1.48 0.02 0.29 0.05 0.17 0.21 0.08 0.04 6.19 59.6

Hides & leather 0.77 0.02 2.02 0.01 0.43 0.24 0.04 1.33 0.04 0.04 4.94 15.5

Other unclassified 0.28 0.07 1.10 0.03 0.05 0.02 0.27 0.83 2.22 0.07 4.93 5.6

Animal, vegetable fats 3.52 0.02 0.25 0.00 0.01 0.03 0.02 0.05 0.07 0.02 4.00 88.0

Footwear 2.60 0.05 0.09 0.00 0.05 0.01 0.00 0.03 0.02 0.02 2.88 90.5

Works of art 0.02 0.00 0.51 0.02 0.56 0.00 0.00 0.03 0.02 0.03 1.18 1.5

Equipment Components 0.00 0.00 0.00 - 0.00 - - 0.00 - - 0.01 5.3

Trade Agreements & Export Instruments• SA market share peaked in 2010 and has declined since then;

• Only partly explained by drop in value of Rand. Given that many competitor currencies also declined, market share remains a concern;

• Global exports showed good growth from 2010 to 2014, but 2015 saw a sharp drop – from US$312bn to US$245bn;

• Much of the drop in total exports to SSA was to Nigeria and Angola – down by US$25bn between them, but most countries saw a decline in imports;

• Ethiopia and Congo-B saw a small increase in exports, whilst Ghana, Kenya, Namibia and Cameroon saw comparatively smaller declines;

• In US dollar terms, SA exports stagnated at between US$26bn and US$27bn a year from 2011 to 2015;

• In Rand terms, exports have performed well – up from roughly R170bn in 2010 to R302bn in 2015 – R1bn up on 2014,

• Going forward, we need to protect our key markets and grow our peripheral markets – which is most of them!

• Angola committed to SADC FTA in January 2017 – it is a market ripe for lower-priced, good quality products;

• Decline in value of the Rand could well see importers there looking to SA – but payment is an issue;

• Tripartite FTA still a way off, but 2017 is a good time to prepare for better access

SA Share of Global Exports to SSA

210

259 273 297 312

245

23 26 27 27 27 21

10.9

10.1 9.9

9.0 8.7 8.6

-

2.0

4.0

6.0

8.0

10.0

12.0

-

25

50

75

100

125

150

175

200

225

250

275

300

325

350

2010 2011 2012 2013 2014 2015

(%)

(US

$, B

n)

Global Exports SA Exports SA Share

Share of “Med Basin” Countries

• Includes North African Countries, plus Italy, Turkey,

UAE, Greece, Portugal, Pakistan and Spain;

• All countries that exported heavily into N Africa

and Med Basin – problems there forcing them to

look to SSA;

• Exports grown from US$21bn in 2010 to US$35bn

in 2014 – several countries had weakening

currencies like SA;

• Exports dropped in 2015 to an estimated

US$29bn, but they maintained market share at

12%, to SA’s weakening 8.6%

• Increasingly moving south as well;

• Need to use our instruments to protect this:

• ECIC, Preferential Trade Agreements, DTI incentives

etc;

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

-

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015

(%)

(US

$, B

n))

Global Exports Med Basin Share of Med Basin SA Share

Looking Forward

• Opening up of Southern and East Africa, away from SA-axis, will see shift away from SA supply:

• You have to ‘fly the flag’ – if your product doesn’t have a presence, it won’t sell;

• ‘Local’ Supply – increasing investment in local manufacture of basic building inputs as well as other products – this is increasingly happening in key markets;

• Not only goods, but services as well – architects, designers, contractors;

• Means procurement channels are changing as well – more focus on Middle East and Asia as suppliers of goods and services;

• Influence of China:

• Very strong in most industries:

• From construction of infrastructure to building materials and FMCG products, Chinese goods becoming dominant;

Looking Forward

• Other suppliers have tapped into this:

• Asian rivals are also developing markets that did not exist before;

• Companies growing their influence in sectors such as power, automotive, construction, railways and manufacturing;

• Brazilian influence growing outside of Lusophone Africa –especially West Africa;

• Increasing number of Turkish, Moroccan, Pakistani, Kenyan, Nigerian, Egyptian etc companies investing in and exporting to Sub-Saharan Africa in all sectors;

• Expanded Suez Canal – increased competition in East Africa?

Can we Export our Way out of Trouble? • In short? No, if we’re looking at traditional method of ex-SA into immediate regional markets;

• The landscape – from projects to trade has matured in recent years and will continue to evolve;

• Growing insistence of government on local procurement, skills is forcing the hand of project developers;

• Increasingly, global players making direct entry into key markets:

• This has slowed slightly with lower growth projections for the region, but remains a long-term trend;

• This is across many industries, from basic building materials, to other construction and industrial products, to food and beverages, luxury goods and other products;

• Also happening in the services sector, with increasing numbers of architects, designers, engineering companies, law firms and others either investing directly or looking for strategic partnerships in key markets;

• SA companies (in our experience) are slow off the mark, but getting there:

• This applies to both local companies as well as SA-based MNCs;

• Increasingly, a presence will be needed in key markets to sustain exports, or even local assembly/manufacture operations;

• Increasing domestic capacity in many basic industries is reducing import dependency;

• Bear in mind the growing long-term prospects offered by key growth nodes, the rapid pace of change, as well as the increasing independence from SA-focus as countries evolve and integrate into the global economy;

ENGAGE, ENHANCE, ENTRENCH, with Africa’s Hotspots for Business Success

Many countries offer long-term prospects for goods, services, technology or finance.

Growth in African infrastructure and logistics is opening up competing supply channels that don’t favour

South Africa;

Africa is becoming a far more crowded space globally, with investors from Europe, Asia, Australia, Latin

America and Canada increasingly influential and many are bringing their supply chains with them;

China has recently unveiled its ‘New Silk Road’ policy, a US$1.4 trillion initiative to redevelop the old trade links from

China to Western Europe;

The EU has a €315bn infrastructure investment plan to unlock the potential of marginal areas of the EU and ‘level the

playing field’ with more developed areas;

Brazil’s Africa policy was first crafted under Lula and has been in play ever since;

3rd Africa-India Summit and the resultant ‘Delhi Declaration’ has been coined as the ‘Modi Doctrine’ to increase India’s

presence in Africa at China’s expense – but in reality at everyone’s expenses;

Most EU nations, Korea, Japan, the USA and others have or are developing specific ‘Africa policies’ to take advantage of

the longer term opportunities in the region;

South Africa’s trade and investment approach has lagged – how can we reverse this?

TANZANIA

BURUDI

EQUATORIALGUINEA

ANGOLA

REP OFTHE

CONGO

Zanzibar

MALAWI

ZAMBIA

MOZAMBIQUE MADAGASCAR

ZIMBABWE

BOTSWANA

SWAZILAND

LESOTHO

SOUTH

AFRICA

NAMIBIA

ANGOLA

NIGER

CHADSUDAN

ETHIOPIA

DJIBOUTI

ERITREA

UGANDASOMALIA

KENYADEMOCRATIC

REPUBLIC

OF THE CONGO

CENTRALAFRICANREPUBLIC

RWANDAGABON

NIGERIA

CAMEROON

Berbera

MALI

BENIN

TOGOCOTEDTVOIRE

BURKINA

GUINEA

SENEGAL

GHANA

LIBERIA

MAURITANIA

SIERRALEONE

GAMBIA

GUINEABISSAU

THE

SOUTHSUDANOil & Gas Industry Content

Development Act 2010,

Petroleum (Local Contentand Local Participation) Regulation 2013

The Petroleum Activities Law of 2004

Petroleum Law 18 August 2014; Mining Law 2014

Enhancing National Participation in the Oil & Gas Industry in Uganda

Petroleum Act, 2015

2014 draft National Energy Policy

Proclamation to Promote Development of Mineral Resources

Localisation, Reservation & Public Procurement Policy

Section 14 of the Petroleum Act

Zambia Mining Local Content Initiative

National Content Regulation of Hydrocarbons Law

Petroleum Code (Law no. 99/013 of December 22, 1999)

Countries with Local Content Requirements/Preferential Procurement Laws

Indigenisation Law

Preferential Procurement Act

Mines Act, 2014

ENGAGE, ENHANCE, ENTRENCH

Companies prepared to make the necessary commitment to these developments will be best placedto take advantage of them through their proximity, partnerships and position as local players.

The time is ripe for South African-based companies to adopt a new way of interacting with theregion. This comes at a time of deepening global integration and the global village becomingsmaller, but paradoxically also a drive to create local benefit and local supply into the multitude ofexciting developments across Africa. The purpose of local content is thus to:

• Develop local skills across the oil and gas, mining, power etc value chain;

• Use the multiplier effect to promote the establishment of local industries;

• Creating training and sustainable employment opportunities;

ENGAGE looks at ways of establishing a presence in countries either directly or through identifyingcredible local partners in countries with exciting projects and programmes in order to both have‘feet on the ground’ as well as to be able to meet growing local content regulations in key markets.

ENHANCE takes this relationship beyond that of supplier/buyer to a partnership level, with transfers

of skills and capacity development for local staff into these markets that benefits both the recipientcompany and country, as well as the supplier through demonstrated commitment to the localpartner and market.

ENTRENCH takes the relationship beyond that of a single project or supply opportunity, to that of alonger-term vision for the development of both the host country and the partners that have forgedlinks.

Thank You!

Duncan Bonnett | 082 465 8812 | 011 728 5878 | www.africainfo.co.za | Fax +27 11 728 7555 E-mail: duncan@africainfo.co.za