RMB FICC Research...RMB FICC Research Please see the last page for the disclaimer 7 Putting the...

RMB FICC Research Where to invest in Africa

15 August 2011

2 RMB FICC Research Please see the last page for the disclaimer


Index

Overview 4

Why Africa? 8

Market size 11

Growth 16

Operational environment 19

Finance 27

Resources 31

Consumption 36

Infrastructure 41

Countries 45

Appendices 71

Data tables 72

Sources and further information 93

Contacts 98

Where to invest in Africa The case for investing in Africa has been widely made. The continent is booming and offers a largely untapped

market. But Africa has many economies, with differing populations, wealth and operating conditions. Quite

literally, Africa offers both the best and the worst.

To help our clients decide where to invest, RMB’s Fixed Income Currency and Commodity (FICC) Research

team has put together this detailed analysis. The research is comprehensive, analysing the macroeconomic, operational and sectoral

environments of 45 sub-Saharan countries (South Sudan, SSA’s 46th country, came into being late in the process of preparing this

document and so has not been included). Detailed country snapshots are provided for the 20 largest economies plus five others being

targeted by many investors.

This research forms part of our own focus on, and expansion into, Africa. Our treasury operations, operating under the First National Bank

brand, are well established in Botswana, Namibia and Swaziland, and are growing rapidly in Mozambique, Zambia and Tanzania. These

operations are all backed by RMB’s head office in Johannesburg and are supported by our branches in London and India. Our plan is to

partner our clients in their expansion into Africa.

We hope our clients find this research useful when strategising their expansion into Africa.

Regards

Louis Jordaan, Head of FICC Africa

Theuns de Wet, Head of FICC Research

Contributing analysts

Celeste Fauconnier

[email protected]

+27 11 282-1923

John Cairns

[email protected]

+27 11 282-8656

Theuns de Wet

[email protected]

+27 11 269-9503


The case for investing in sub-Saharan Africa (SSA) is strong;

economies are booming, political risks have been reduced, and the

macroeconomic and business climates have improved.

SSA comprises 46 countries (including South Sudan) with vastly

different population sizes, income levels, growth rates and

operating conditions. How you choose between these countries will

depend on your particular company’s circumstances. Luckily, there is

now a huge amount of information that can help, which this

document sets out in extensive detail.

We look in detail at three issues of key importance: market size,

market growth and the operating environment. Putting these

together graphically as in Figure 1 helps us to identify key countries.

Weighing the three issues equally provides us with a ranking of the

most attractive countries to invest in (Table 1). The top 10 countries

in this ranking are: South Africa, Nigeria, Ghana, Ethiopia, Tanzania,

Botswana, Kenya, Uganda, Angola and Zambia. Given the differing

needs of individual companies, these rankings should be considered

indicative rather than prescriptive.

Figure 1: Most attractive countries in Africa based on market size, market growth and the ease of operating¹

Notes:

1 Forecast GDP growth is based on IMF figures for 2011 – 2016. The operating environment index is explained in the text; a higher number represents a better environment.

Circle sizes represent the size of the economy in 2010 on a PPP basis. Colours denote different country groupings: blue = the continental giants, green = other attractive

economies, yellow = countries that are not particularly attractive, orange = countries with very problematic operating environments

Source: RMB FICC Research

Data as at August 2010

Overview

0

2

4

6

8

0 2 4 6 8 10

South Africa

Nigeria

Forecast GDP growth

Operating environment index

Mozambique

Ethiopia

Botswana

Mauritius

Namibia Rwanda

Tanzania

Kenya

Ghana

Sudan

Angola

Uganda Zambia

DRC

Côte d'Ivoire

Cameroon

Equatorial G

Circle size represent the size of the economy

Swaziland

Gabon


Table 1: Our ranking of the most attractive countries for investment

(the higher the score the better¹)

Note:

1 As the score is dependent on the size and growth rate of the economy there

is no minimum or maximum rating.



Aim and structure of the research

SSA is in the spotlight as an investment destination. We have seen a

notable pick up in interest from our clients and the past year has

seen a rush of papers setting out the attractions of the continent.

Rand Merchant Bank and our sister company First National Bank (all

part of the FirstRand Group) are expanding rapidly into SSA.

Making the decision to invest in SSA is one thing, it’s quite another

to know exactly which countries to go into. This document moves

the research agenda forward into this space.

Our research cannot be prescriptive. A country that is attractive for a

low-end retailer might not be appealing to a company looking to

build roads, or even for a high-end retailer. As such, the focus of

this document is to provide the analysis, information and hard data

to allow companies to make their own decisions.

We start by looking at the case for investing in Africa. Since these

arguments have been widely made, we mostly summarise the key

reasons without going into too much depth. Arguments focus

primarily on SSA’s improved growth outlook. We caution that many

may be getting too optimistic in their forecasts given that they

understate the effect rising commodity prices have had, although

we do agree that SSA offers an attractive investment opportunity.

We then turn to looking at issues that will help determine where to

invest. Companies wanting to sell into Africa will need to know

about market size and potential market growth — the topics of our

next two sections. All companies will be exposed to the operating

environment in each country: infrastructure, corruption,

bureaucracy, tax rates and so on. We lay out this information in-

depth, putting particular emphasis on the financial sector. We then

turn our attention to the three key sectors we identified as being

most relevant for assessing opportunities and challenges:

consumption, infrastructure and resources.

Our country snapshots set out key data, relative rankings,

investment opportunities and challenges, as well as the most

problematic factors for doing business in the 20 largest economies,

plus another five that are increasingly popular as investment

destinations. The appendices set out the data we have used as

sources for this document as well as additional useful information.

What factors decide the investment location?

Various studies have looked at the drivers of international

investment decisions. These findings support what common sense

suggests. To summarise:

• For investment on a vertical basis (where production facilities are

set up for production/export): Labour costs and skills, the size of

the domestic market, the proximity to other markets, openness

to trade and the operating environment

• For investment on a horizontal basis (where investment is to sell

into the local market): Market size, market growth and the

operating environment

The ephemeral variable here is the operating environment. Studies

have shown various issues to be important: the availability of

infrastructure, reasonable tax levels and stability in the tax regime, a

stable political environment, physical and personal safety, the legal

framework and the rule of law, corruption, governance, the

efficiency of the public service and so on. Figure 2 illustrates the

most problematic factors in doing business in SSA.

Rank Score Country

1 5.6 South Africa

2 4.9 Nigeria

3 4.4 Ghana

4 4.3 Ethiopia

5 3.9 Tanzania

6 3.9 Botswana

7 3.9 Kenya

8 3.7 Uganda

9 3.5 Angola

10 3.5 Zambia

11 3.4 Mauritius

12 3.3 Rwanda

13 3.3 Mozambique

14 3.1 Sudan

15 3.0 Namibia

16 3.0 Côte d'Ivoire

17 3.0 Burkina Faso

18 2.9 Senegal

19 2.9 Cameroon

20 2.7 Malawi

21 2.7 Niger

22 2.7 Madagascar

23 2.7 Mali

24 2.5 Benin

25 2.4 Gabon

26 2.4 Congo, Democratic Republic (DRC)

27 2.3 Congo, Republic

28 2.3 Cape Verde

29 2.3 Gambia

30 2.2 Guinea

31 2.2 Sierra Leone

32 2.1 Seychelles

33 2.0 Liberia

34 2.0 Equatorial Guinea

35 2.0 Lesotho

36 1.9 Togo

37 1.9 Chad

38 1.8 Central African Republic (CAR)

39 1.8 Swaziland

40 1.7 Sao Tome and Principe

41 1.6 Burundi

42 1.5 Eritrea

43 1.5 Zimbabwe

44 1.5 Guinea-Bissau

45 1.2 Comoros


Figure 2: Most problematic factors for doing business in SSA (% of

respondents)

Source: World Economic Forum


Where are corporates going?

According to UN statistics, within SSA, South Africa and Nigeria

have the greatest amount of foreign capital invested, with Sudan,

Angola and the DRC falling some way behind. Angola has been

receiving a huge share of new investment more recently, with

Ghana, Equatorial Guinea, Zambia, Uganda, the DRC and

Madagascar also seeing meaningful inflows.

We have noticed a huge pick up in investment activity from our

South African clients. The rollout strategy is generally quite similar,

with firms first looking at neighbouring countries, then Zambia and

East Africa before moving on to either the DRC or one of the big

three West African nations — Nigeria, Ghana or, until recently, Côte

d’Ivoire.

Surveys confirm that investors are primarily interested in SSA as a

resource play, secondly as a market to sell goods, but it is still largely

off the map in terms of being seen as a manufacturing centre

(Figure 3).

Figure 3: Sectors in Africa that investors think offer the best potential (% of

respondents)

Note:

1 Respondents (562 business leaders) selected several answers

Source: Ernst and Young


Accessing information

There is now a huge amount of information freely available to

investors. This isn’t only the usual macroeconomic data: inflation,

GDP, growth, etc. but it stretches to more objective and

microeconomic issues such as the business environment,

infrastructure, complexities of the tax regime, rental rates,

corruption, etc. Care should be taken when using this data;

definitions and sources should be carefully checked. The data is not

always comprehensive or easily accessible, but it is there for those

who want it. This report attempts to lay out as much of this data as

possible.

0 5 10 15 20

Poor public health

Government instability

Restrictive labor regulations

Crime and theft

FX regulations

Policy instability

Inflation

Poor work ethic

Uneducated workforce

Tax regulation

Tax rates

Inefficient govt bureaucracy

Inadequate infrastructure

Corruption

Access to financing

0 6 12 18 24 30

Automotive

Renewable energy

Business services

Retail

IT services

Industrial machinery

Infrastructure

Electronics

Transportation

Energy

Financial services

Telecommunications

Construction

Hotels and tourism

Consumer products

Exploiting resources

Oil and gas

Mining and metals


Putting the pieces together

When deciding where to invest, you need to first identify what

issues are important for your business: for example, do you care

about market size, the costs of electricity, or the transport

infrastructure? Once you understand the issues, you can then look

for countries that meet your criteria and shortlist some for further in

-depth investigation.

Rather than generate a prescriptive list of which countries are the

most attractive, the best we can do is to take a broad approach that

is as generic as possible. We do this by focussing on the three main

issues that we have looked at in detail and that will be important for

a lot of companies: market size, market growth and the operating

environment. We define market size as the USD GDP in purchasing

power terms in 2010. For market growth, we use the IMF’s forecast

of real GDP growth between 2011 and 2016. Creating a measure of

the operating environment is more difficult; we do so by combining

four well-known indices of economic competitiveness and

governance as explained in the section on the operating

environment.

Graphically illustrating the three series is useful (Figure 1). As can be

seen:

• South Africa and Nigeria (in blue) are the economic giants in SSA

(circle sizes illustrate the size of the economy), with South Africa

having a better operating environment and Nigeria far faster

growth. Given the dominance of these two economies —

together they make up almost 50% of the region’s GDP — they

become obvious targets for investment

• Botswana, Mauritius, Namibia, Ghana and Rwanda (green) also

offer attractive operating environments. Their large economic

sizes and growth rates make Ethiopia, Mozambique, Tanzania,

Zambia, Uganda, and Kenya attractive

• Countries with troubled operating environments have been

coloured orange. These include two very large economies,

Angola (the third largest in SSA) and Sudan (fourth largest).

Given their size they are often still considered as attractive

destinations; but be aware of how tough it is going to be to

operate there

• Countries marked in yellow offer a combination of uninspiring

growth and not particularly attractive operating environments.

We have included Côte d’Ivoire in this list, but note that its

operating environment has been based on data established

before the recent political troubles

To rank the countries, we take a geometric equally weighted index

of these three indicators. To be rated highly under this system

requires a country to have a decent rating in market size, growth

and operating environment. Since the dispersion of growth outlooks

is not considerable, the methodology effectively — and intentionally

— places emphasis on economic size and the operating

environments. Table 1 sets out the full ratings, from the most to the

least attractive. These rankings should be considered indicative only,

no ranking can capture all the relevant information about a country

and each corporate will need to decide what is important for itself.

The most attractive countries overlap with those coloured blue and

green in Figure 1.


Why Africa?

Businesses are starting to invest widely in SSA. The key reasons for

doing so are:

• The region has been doing very well economically, growing at

5.6% per year in the last decade. Six of the 10 fastest growing

economies in the world in the past decade were in SSA.

According to the IMF’s latest forecasts, six of the 10 fastest

growing economies in the next five years will be in SSA (Figure

4)

Figure 4: Top ten fastest growing economies (2011 – 2016)¹

Notes:

1 Of large, non-crisis economies

Source: IMF, RMB FICC Research


• A large market: 840 million people, with a total US$1.9 trillion in

purchasing power, making it larger than some of the BRICS

(Figure 5)

• A sharp reduction in political conflicts

• An improved macroeconomic environment, with inflation and

budgets broadly under control

• A better business climate owing to regulatory reform and

privatisation

• Improved access to and integration with international capital

markets

• Favourable demographics: from a rapidly growing population

and labour force, to urbanisation and growth in the middle class

• The perception of it being the “last frontier”

McKinsey & Company’s Lions on the move: The progress and

potential of African economies, June 2010, provides an excellent

report on these issues. To quote:

If recent trends continue, Africa will play an increasingly

important role in the global economy. By 2040, Africa will be

home to one in five of the planet’s young people and will have

the world’s largest working-age population. Global executives

and investors cannot afford to ignore the continent’s immense

potential. A strategy for Africa must be part of their long-term

planning. Today the rate of return on foreign investment in

Africa is higher than in any other developing region. Early entry

into African economies provides opportunities to create

markets, establish brands, shape industry preference, and

establish long-term relationships. Business can help build the

Africa of the future.

Figure 5: Comparisons of economic size



Key macroeconomic statistics on SSA

• 45 countries

• 840 million people

• Young, growing population

• Rapid urbanisation; 50% of the population will live in cities by

2035

• US$1.1 trillion economy at market prices

• US$1.9 trillion purchasing power

• Average of US$1,340 GDP/capita

• Geographical area of 20 million square kilometres

Reasons to be cautious

There seem to be few willing to challenge the Africa success story.

Nevertheless, the arguments for caution are not hard to find:

• A large part of the achievements of African economies in the

last decade might simply be a result of the increase in resource

prices. McKinsey, as well as other authors, downplay this risk,

seeing growth as being driven more by domestic demand. While

we agree that domestic demand has contributed, we find no

evidence to suggest that resources aren’t the backbone of

0

3

5

8

10

China

Ethiopia

India

Mozambique

Zambia

Ghana

Angola

Vietnam

Tanzania

Bangladesh

%

0

700

1,400

2,100

2,800

3,500

1995 1999 2003 2007 2011 2015

Brazil

India

Russia

South Africa

Sub-Saharan Africa

US$bn


economic growth in SSA. Certainly it remains to be seen how

well SSA would perform if commodity prices entered a

prolonged slump

• Past success doesn’t necessarily imply future success. We looked

at the correlation between country economic growth in the

1980s and the 1990s, and the 1990s and the 2000s and found

that countries that did well in one period did not necessarily do

well in the next. Indeed, SSA performed very well in the 1960s

and early 1970s but then underperformed significantly for the

next two decades

• Political risks may be diminished but remain high, as the recent

problems in the Côte d’Ivoire demonstrate

• Most SSA countries are still far from fulfilling the conditions

associated with sustained economic success in other developing

countries. Most economies are still relatively closed,

governments widely interfere in the private sector, leadership

and administration capabilities are weak and, most of all,

investment rates are inadequate. For a good report on necessary

conditions for growth see the World Bank’s Commission on

Growth and Development, published in 2008

While SSA might be reforming and growing rapidly, most SSA

countries still have a long way to go when it comes to investor-

friendly regulatory/business environments. The latest Doing Business

Report by the World Bank suggests exactly that — out of 183

countries studied, only nine of 45 SSA nations featured in the top

100.

A balanced view

SSA is an improved story, but it isn’t set to shine like Asia. Quite

simply, conditions are still well off best practice levels and a lot of

growth has been driven by higher commodity prices. Africa is far

from a homogenous story; while there are many successes, there

are still far too many failures — and it’s not clear that we’ll be able

to tell these apart up-front.

Even with a much improved performance, SSA will still be small in

terms of the global market. Still, it is growing fast enough to

generate a huge amount of interest and a lot of South African and

international companies see it as a natural progression to invest in

the region. As we set out in the Consumption section, many South

African retailers have already invested in the continent.


Market size

SSA offers a huge range of economies; from the very small to the

giants of South Africa and Nigeria (the 25th and 31st largest

economies in the world). Understanding the market size is vital for

anyone wanting to sell goods or services.

Ranking the economies

Nigeria and South Africa — the giants of the continent

South Africa is the largest economy in SSA (Figures 6 and 8) and on

the continent as a whole. At almost 50 million people it has SSA’s

fourth largest population, which combined with the highest income

levels of any of the large economies creates a giant with a

US$524bn purchasing power economy¹. South Africa alone

accounts for 28% of SSA’s GDP.

Figure 6: SSA GDP by country (US$bn 2010)



Nigeria is the second largest economy. With an estimated 156

million people it has the eighth largest population in the world and

is by far the most populous country in SSA (Figures 7 and 9) and the

continent. With decent income levels, its economy totals US$378bn.

And as we discuss in our section on growth, Nigeria is expected to

continue to see continued very rapid economic expansion — it aims

to be one of the 20 largest economies in the world by 2020.

Figure 7: SSA populations (millions 2010)



The two countries combined account for almost 50% of SSA’s GDP.

Their dominance can easily be seen in Figures 6, 8 and 10 and

makes them hard to ignore in any African investment plan.

Angola, Ethiopia and Sudan — the second rung

There are another three very large economies. Angola’s success is

well known; between 1999 and 2010 its economy expanded by 14

times. With a purchasing power GDP of US$107bn, it is now the

third largest economy in SSA, although at less than 6% of the

region’s total, it is well behind that of South Africa and Nigeria.

Sudan, before the split, was a close fourth, with a US$100bn

economy (as yet we don’t have adequate data on the size of the

economies post split). Ethiopia is ranked fifth. This comes as a

surprise to many whose image of the country was framed by the

droughts and food aid of the 1980s and early 1990s. Even though it

is very poor, with a GDP/capita of only US$350, its place is assured

by its 84 million population, the second largest in SSA and 14th

largest in the world. The Ethiopian economy has seen a stellar

performance over the past decade, growing at 8.4% per annum,

behind only Angola and Sierra Leone.

The rest in perspective

There are another six economies in SSA that we can classify as large

— three in West Africa: Ghana, Cote d’Ivoire and Cameroon, and

three in East Africa: Kenya, Tanzania and Uganda. Combined these

six are only half the size of South Africa’s economy but at

US$272bn are still meaningful. There are another eight economies

larger than US$20bn, 11 between US$10bn and US$20bn, and 15

in the smallest category. The size of the economies is put into

perspective in Figure 10.

Other, 407

South

Africa, 50

Nigeria, 156

Angola, 19

Ethiopia, 85

Kenya, 40

Tanzania,

41Sudan, 40

Note: 1 Gross domestic product (GDP) can be converted into US dollar terms using either market exchange rates or purchasing power parity levels (PPP). In this document, we use

primarily the latter method as it avoids the volatility in measurement because of fluctuating exchange rates. Relative to using market exchange rates, the PPP method in-creases the reported size of all economies, generally, the more so, the poorer the country. PPP GDP effectively measures the volume of goods and services that can be bought in the local economy based on local rather than international prices. The Appendix and Country Snapshots provide GDP based on both PPP and market exchange rates but, unless otherwise stated, GDP refers to 2010 PPP GDP as calculated by the IMF

South Africa, 524

Nigeria, 378

Angola, 107

Ethiopia, 86Kenya, 66

Tanzania, 58

Sudan, 100

Other, 581


Geographical size does not necessarily correspond with economic

size. Because it is surrounded by some of the largest countries on

the continent, one can easily forget that Uganda has the eighth

largest population in SSA, and the 10th largest economy. And

population densities remain high further down the Rift Valley with

Figure 8: SSA GDP by country (US$bn 2010)

Source: IMF


Rwanda and Burundi also having economies well out of proportion

to geographical size. In West Africa, by contrast, a combination of

low income levels and low population densities mean that many

countries while large geographically are small in economic size.

Niger actually has an economy smaller than Rwanda.

Figure 9: SSA populations (millions 2010)

Source: IMF


0 100 200 300 400 500 600

Sao Tome

Comoros

Liberia

Guinea-Bissau

Cape Verde

Seychelles

Lesotho

Burundi

CAR

Gambia

Eritrea

Sierra Leone

Zimbabwe

Togo

Swaziland

Guinea

Niger

Rwanda

Malawi

Benin

Namibia

Mali

Congo

Chad

Mauritius

Madagascar

Burkina Faso

Zambia

Mozambique

Gabon

DRC

Equatorial G

Senegal

Botswana

Côte d'Ivoire

Uganda

Cameroon

Tanzania

Ghana

Kenya

Ethiopia

Sudan

Angola

Nigeria

South Africa

0 40 80 120 160

Nigeria

Ethiopia

DRC

South Africa

Tanzania

Sudan

Kenya

Uganda

Ghana

Cote d'Ivoire

Mozambique

Madagascar

Cameroon

Angola

Malawi

Burkina Faso

Niger

Mali

Zambia

Senegal

Zimbabwe

Guinea

Chad

Rwanda

Benin

Burundi

Togo

Sierra Leone

Eritrea

CAR

Liberia

Congo, Republic

Lesotho

Namibia

Botswana

Gambia

Guinea-Bissau

Gabon

Equatorial G

Mauritius

Swaziland

Comoros

Cape Verde

Sao Tome

Seychelles


Figure 10: SSA economic sizes1

Note:

1 Circle size represents total GDP with the top 11 economies numbered



The Big 5

Africa’s Big 5 is a term used by the tourism industry to refer to lion,

leopard, elephant, rhino and buffalo. It was coined by hunters and

refers to the most difficult animals to hunt on foot. The Big 5 is also

a term that has started to be used to refer to SSA’s largest

economies. Coined by the IMF, it refers to South Africa, Nigeria,

Angola, Ethiopia and Kenya. Given their economic and geographical

size, they are obvious countries to hunt for investment

opportunities. Together, the Big 5 account for 61% of SSA GDP.

While Sudan and Tanzania (large populations and large economies)

and the DRC (large population) could argue that they should also be

on the list, the Big 5 as defined offers a nice summary of the largest,

populous and operationally viable economies for investing.

Table 2: Key countries in Africa — the Big 5 and possible contenders



Population GDP

Million % of SSA total US$bn % of SSA total

South Africa 50 6% 524 28%

Nigeria 156 19% 378 20%

Angola 19 2% 107 6%

Ethiopia 85 10% 86 5%

Kenya 40 5% 66 3%

Sub-total: Big 5 350 42% 1,161 61%

Sudan 40 5% 100 5%

Tanzania 41 5% 58 3%

DRC 70 8% 23 1%

Sub-total: Big 8 501 60% 1,343 71%

Other 336 40% 558 29%

Total 838 100% 1,901 100%

Sharp divergences in wealth

SSA is generally thought of as a poor region. There are, however,

some countries with very high income levels. South Africa is the

most obvious, but actually ranks only sixth in terms of GDP/capita.

Small oil producing countries dominate the top of the list: Equatorial

Guinea is first (52nd in the world), and Gabon is third. The island

tourist destinations also do well: Seychelles is second, Mauritius is

fifth and Cape Verde in ninth place. Botswana, Namibia and Angola

are placed fifth, seventh and eighth.

At the bottom of the list are Burundi (officially the poorest country

in the world), the DRC, Liberia, Malawi and Sierra Leone. SSA

countries make up the 15 poorest countries in the world.

Figure 11: Annual GDP/capita (2010)



A big economy doesn’t imply a big market

With GDP/capita of the richest six SSA economies being over

US$6,000 and that of the poorest 15 economies under US$600, the

typical consumer in each country can vary greatly. We look into this

in more detail in our section on consumption where we break up

the population of each country according to income levels. Similarly

a large market size doesn’t imply large investment, an issue we look

at in the section on infrastructure.

Above US$5,000

US$2,000-5,000

US$1,000-2,000

US$500-1,000

Below US$500

1

2

3

4

5

6

8

7119

10


Zones of interest

Certain economies are linked strongly enough that we can almost

treat them as one market:

• In Southern Africa, Botswana, Lesotho, Namibia and Swaziland

(BLNS) are highly integrated with the South African economy.

Together, the five economies operate under a customs union

(SACU), use similar legal systems, and have linked infrastructure,

all making the transportation of goods and doing business

relatively simple. The countries, excluding Botswana, are also in

the same currency area. Combined, the five countries’

population share of SSA is 7%, and their GDP share is 31%

• The East African Community (EAC) — grouping Kenya,

Tanzania, Uganda, Rwanda and Burundi — is not nearly as

integrated as the SACU but is moving in that direction. Trade

barriers have been lifted but cross-border infrastructure is still

limited, while currency and legal systems are still far from

harmonised. The community, nevertheless, has huge potential

and investors can almost start considering it as one market. Put

together, these economies account for 16% of SSA’s population

and 10% of GDP, almost putting it on a par with Nigeria

• The Economic Community of West African States (ECOWAS) is a

free-trade zone of 15 countries. It includes eight members of the

West African Economic and Monetary Union (WAEMU in

English, UEMOA in French); Benin, Burkina Faso, Côte d’Ivoire,

Guinea Bissau, Mali, Niger, Senegal and Togo. The remaining

countries are Cape Verde, Gambia, Ghana, Guinea, Liberia,

Nigeria and Sierra Leone. Together, these countries have a

population of 300 million (35% of SSA) and a US$593bn

economy (31%). Nevertheless, it is hard to consider these

countries as one block as the 15 countries have vastly different

historical backgrounds, languages, currencies, laws and are all at

different stages of economic and political development. While

further integration is likely, it will probably happen slowly

Figure 12: Key African economic zones¹

Note:

1 ECOWAS = Economic Community of West African States; WAEMU = West African

Economic and Monetary Union; EAC = East African Community; SACU = Southern

African Customs Union

Source: RMB FICC Research, ECOWAS, SACU, EAC


There are various other economic, monetary and political zones in

place across Africa. In general, though, these are far from

sufficiently developed to have a major impact on the investment

decision and while further integration will come with time, it is likely

to be very slow.

ECOWAS (WAEMU)

ECOWAS

EAC

SACU


Growth

A key reason to invest in Africa is that it offers rapid growth. Yet

while SSA as a whole is set to do very well, growth prospects

diverge sharply between countries.

Consensus views

Table A2 shows average economic growth forecasts from the

International Monetary Fund (IMF), Business Monitor International

(BMI) and IHS Global Insight over the next six years. There is

widespread agreement that many African countries will grow

exceptionally fast. Indeed, six of the top 10 fastest growing

economies in the next five years will be in Africa according to the

IMF. Figure 13 illustrates the IMF growth forecasts: most SSA

countries are expected to experience strong growth (dark blue) —

others should achieve significant growth (green), while a few will

experience weak growth (brown).

Figure 13: Map of economic growth (2011 – 2016)

Note:

1 South Africa = RMB FICC Research’s average growth forecast



Some noteworthy points on these forecasts:

• Nine SSA countries are in the 7% club — the growth rate

needed to double an economy’s size within 10 years

• Growth is expected to be widespread: 60% of SSA countries are

expected to grow above 5%

• South Africa, the giant in terms of current economic size, is

expected to grow much slower than other SSA countries (4.1%),

offering market size but not market growth. The IMF forecasts

that it will grow 4.1% between 2011 and 2016. Our forecast is

for only 3.5%, which is the number reflected in Figure 13

• The two most populous countries in SSA, Nigeria and Ethiopia,

are expected to grow quickly (Ethiopia at 8.1% and Nigeria at

6.4%). These countries offer size and forecast market growth.

The DRC, another country with a massive population, should

also experience an improving economic environment (6.5%)

• Other large economies that are expected to grow at pace

include Angola (7.5%), Ghana (7.9%), Mozambique (7.8%),

Niger (7.3%), Tanzania (7.1%) and Zambia (7.6%). This mostly

reflects their high commodity endowments

• All the East African Community countries — Kenya (6.5%),

Tanzania (7.1%), Uganda (6.7%), Burundi (4.9%) and Rwanda

(6.7%) — are expected to experience rapid growth.

Interestingly, the high growth rates in Tanzania have pushed its

economic size to close to that of Kenya, traditionally the regional

giant

• The French West African countries, while expected to do well,

are mostly forecast to be relative underperformers. With these

economies being comparatively small, they appear to offer

neither market size nor growth

• Post-crisis economies such as Liberia (7.7%) and Zimbabwe

(5.6%) are expected to perform reasonably well. This fits with

the historical evidence that countries that have experienced a

crisis can bounce back rapidly. These countries, however, are

generally too small in terms of market size to be obvious

investment destinations

• The rich island economies of Mauritius (4.3%) and the

Seychelles (4.7%), which offer some of the best operating

environments in SSA, are expected to perform moderately well

• Divergence of growth views: We looked at the six-year growth

views from the IMF, BMI and IHS Global Insight and found that

generally the only major differences were with Sudan, Côte

d’Ivoire, Equatorial Guinea as well as some of the very small

economies

Risks to the outlook

Forecasting is always hazardous, all the more so when you look far

out. The actual growth outcomes could indeed be very different

from the forecasts. Certainly, you shouldn’t take the similarities in

forecasts to indicate that there are little risks to the outlook. As

stated already, a key determinant for Africa will be commodity

prices. The forecasts above all assume continued high, or even

rising, commodity prices. If this doesn’t play out, actual growth will

be much lower. Political instability offers another obvious risk.

Furthermore, as stated in the “Why Africa?” section, past success

doesn’t necessarily imply future success.

0-4% growth

4-7% growth

7-10% growth


Lack of investment

A major concern about the long-term economic outlook of SSA

comes from the very low rates of investment. Barely any of the

economies have investment-to-GDP ratios above 30%, the range

into which most rapidly growing economies fall (Figure 14 and Table

A3), showing quite clearly that they aren’t investing in new

production capacity and the necessary infrastructure to derive future

growth.

Figure 14: Growth strong but investment-to-GDP lagging

Note:

1 Forecast GDP growth is based on IMF figures for 2011 – 2016. Circle sizes

represent the size of the economy in 2010 on a PPP basis. The investment-to-GDP ratio

is for 2010

Source: IMF


Economic risks

The largest economic risk is if or when commodity prices come off.

This risk is the greatest for countries almost exclusively dependent

on oil: Angola, Chad, Equatorial Guinea, Gabon, Nigeria and Sudan.

It is also vital for undiversified non-oil primary producers: Burkina

Faso, Burundi, DRC, Guinea, Guinea-Bissau, Malawi, Mali, Sierra

Leone, Zambia and Zimbabwe. These are only the most extreme

examples though — all SSA countries are to some extent dependent

on commodity exports (with the exception of the island states,

which depend on tourism). Table A3 provides statistics on the

composition of the exports, export share of growth, how diversified

the export base is, and how volatile historical growth has been.

Those countries dependent on food and agriculture, fuels and

mining will be heavily exposed to commodity price changes,

particularly if all their exports fall into one category. This includes

most of SSA. Within the largest economies, Angola and Nigeria

stand out as the markets most exposed. Finally, we have also

provided an assessment of how volatile growth has been in the past

— we measured this for the period from 1990 until 2010, with high

volatility obviously denoting high risk (Table A3).

0

2

4

6

8

10

0 10 20 30 40 50

Investment-to-GDP ratio (%)

GDP growth (%)

Circle sizes represent the size of the economy (US$)


Operational environment

Sub-Saharan Africa has some of the toughest operating conditions

on the planet. The lack of access to financing, high corruption, poor

infrastructure, inefficient bureaucracy, difficult tax and legal regimes

and an inadequately educated workforce, all make it tough to do

business.

Summarising the operating environment

When talking about the operating environment, we mean anything

from corruption to infrastructure to regulations and any number of

other issues. Luckily, there are now a huge number of studies that

allow us to analyse the key issues (the tables in the Appendix set out

some of this data, additional information is listed in the Sources and

Further Information section). Each company and/or sector will

naturally be exposed to different aspects of the operating

environment. Logistics, infrastructure and the ability to import, for

instance, could be key for a retailer, while corruption might be of

more importance to a large-scale mining operation. As such, it’s

imperative to hone in on what will affect your business. We provide

you with the tools to do this by analysing the various issues below.

For the sake of simplicity, we provide a ranking of the operating

environment across the continent. We aggregated four key studies,

specifically: The World Bank’s Ease of Doing Business Index, the

World Economic Forum’s Global Competitiveness Index, the

Heritage Foundation’s Index of Economic Freedom and

Transparency International’s Corruption Perceptions Index. These

four indices along with our composite index are presented in Table

A4. There are a huge number of other indices that could be

included. When examining the data, however, we found that most

of these surveys on corruption, bureaucracy, political stability etc.

are all highly correlated. As such, our approach provides a good

assessment of the general operating environment.

Figure 15 illustrates the results. Points to note include:

• In general, the wealthier the country, excluding wealth from oil,

the better the operating environment

• Landlocked countries generally have worse operating

environments (Botswana and Rwanda are major exceptions)

• Mauritius, Botswana, South Africa, Namibia, Rwanda and Ghana

emerge as having the best operating environments

• Angola, the DRC and Sudan stand out among the large

economies for having a very poor operating environment

• Ghana is the only West African country ranked as having a

decent operating environment. Rwanda is the only central/East

African country to have a good operating environment,

although the East African giants of Kenya, Tanzania and Uganda

are rated fairly well

Figure 15: Composite index of SSA’s operating environment

Note:

1 None of the SSA countries have excellent operating environments

Source: World Bank, World Economic Forum, Heritage Foundation, Transparency

International, RMB FICC Research


Major operating challenges

The major problem for most corporates across the continent is —

according to the World Economic Forum’s latest Executive Opinion

Survey — the difficulty in accessing financing. Corruption ranks

second, followed by poor infrastructure, inefficient bureaucracy, the

tax regime, and workforce issues (Figure 16). Perhaps surprisingly,

political risk ranks fairly low down the list.

Good

Moderately good

Average

Poor

Very poor


Figure 16: Most problematic factors for doing business in SSA (% of

respondents)



Access to financing

Access to financing is by far the issue reported as being the most

problematic for doing business in Africa. In the latest World

Economic Forum’s Executive Opinion Survey, it ranked as the biggest

obstacle in 17 of 29 SSA countries covered, and as the second or

third most pressing in another eight. The World Economic Forum’s

Global Competitiveness Report ranks the financial market

development in certain Africa countries (Figure 17). The sub-

categories are reported in Table A5.

Because of its importance, we address finance as a separate issue in

this document.

Figure 17: Financial sector development

Note: Scale ranges from 1 = poor to 7 = good Source: World Economic Forum


Corruption

Corruption is the second largest concern experienced by companies

in SSA. The extent of the problem, however, differs widely across

the continent. According to Transparency International’s Corruption

Perceptions Index, it is lowest in Southern Africa — South Africa,

Namibia and above all Botswana — as well as the richer island

countries — Cape Verde, Mauritius and the Seychelles. Ghana and

Rwanda also rank relatively well.

0 5 10 15 20

Poor public health

Government instability

Restrictive labor regulations

Crime and theft

FX regulations

Policy instability

Inflation

Poor work ethic


Tax regulation

Tax rates

Inefficient govt bureaucracy


Corruption

Access to financing

1 2 3 4 5

South Africa

Kenya

Mauritius

Namibia

Botswana

Zambia

Ghana

Malawi

Rwanda

Uganda

Gambia

Nigeria

Swaziland

Tanzania

Benin

Cape Verde

Senegal

Zimbabwe

Côte d'Ivoire

Lesotho

Mozambique

Cameroon

Ethiopia

Burkina Faso

Angola

Madagascar

Mali

Chad

Burundi


Corruption is highest in the troubled states: the DRC, Sudan and

Chad. In general, the higher the dependence on a single, easily

controlled commodity, the higher the corruption problem.

Of the largest economies on the continent, it is Angola that stands

out as having very high corruption. Kenya, Tanzania and Uganda

also fare relatively poorly — in all three countries, it is the issue that

businesses report to the World Economic Forum as being the most

problematic for doing business. Transparency International’s

Corruption Perceptions Index is summarised in the map in Figure 18

and listed in Table A4.

Figure 18: Corruption

Note:

1 None of the SSA countries are ranked clean

Source: Transparency International


Infrastructure

The lack of adequate infrastructure is the third largest obstacle, and

is an issue that extends across the continent. The World Bank

estimates that Africa’s infrastructure deficit is US$93bn. Naturally,

this also provides one of the biggest opportunities for those

companies that develop and provide infrastructure (this is discussed

in the Infrastructure section).

The significant infrastructure challenges that the region faces have

been highlighted by the latest World Economic Forum’s Global

Competitiveness Report. This report states that South Africa and

Namibia have the highest infrastructure ranking among the SSA

countries in the survey. It is striking, however, that Namibia is

ranked 54th out of a total of 139 countries in the survey. Some

seemingly attractive African economies languish close to the bottom

of the infrastructure table, including Angola, (136th) and Nigeria

(135th). This data is summarised in Figure 19 and listed in Table A5.

The shortage of electricity is probably the biggest infrastructural

problem. More than 30 SSA countries experience power shortages

on a regular basis. These shortages take a heavy toll on the private

sector, with losses in forgone sales and equipment estimated to be

around 6% of turnover for formal businesses and as much as 16%

for informal enterprises. The World Bank’s Enterprise Surveys

provide some assessments of the electricity shortages across various

countries (these are summarised in Table A6). These surveys are

often a few years old, so in most cases the extent of the shortages is

probably now worse than reported. Of the 38 SSA countries for

which data exist, 12 experience more than 100 hours of blackouts

per month. Of the larger economies, Angola, the DRC, Ghana,

Nigeria and Uganda are reported to suffer regular blackouts.

Despite the much publicised problems, South Africa and Southern

Africa still have relatively good access to electricity.

The region’s road and rail infrastructure also pose a challenge with

the density of paved road and railways falling well below the

averages of other low- and middle-income countries. Africa has only

204km of road per 1,000 square km of land area. Of this only 25%

is paved. This is significantly lower than the world average of 944km

per 1,000 square km (of which 50% is paved). And road capacity is

limited; the majority of roads have one operational lane in each

direction. Of the larger economies, it is South Africa, Namibia,

Botswana as well as (and surprisingly) Ethiopia, which have good

road networks, while Angola, Chad and Mozambique are on the

opposite end of the scale.

Apart from Southern Africa, all SSA countries have very poor rail

infrastructure. Service rather than physical capacity is the major

issue. Transit time, reliability, security and service frequency are all

problematic factors. There are huge delays in rail freight crossing

national borders. Locomotives from one country are often not

permitted to travel on another country’s network, mainly because of

the inability to provide breakdown assistance to foreign operators.

Relatively clean

Moderately corrupt

Corrupt

Highly corrupt

Extremely corrupt


Figure 19: Infrastructure

Note:

1 None of the SSA countries are ranked as having excellent infrastructure. Data

available for only certain countries



General cargo and containerised cargo passing through African

ports have trebled since the 1990s. Traffic is concentrated in a few

ports (Abidjan in Côte d’Ivoire, Dar es Salaam in Tanzania, Durban in

South Africa and Mombasa in Kenya). These ports are, however, not

major hubs in a global context and have low capacity, particularly in

terms of terminal storage and dredging capability. Many ports are

poorly equipped and inefficiently operated. According to the African

Development Bank, port charges for both containers and general

cargo in SSA are higher than in other regions; security standards are

variable; and few ports are prepared for the dramatic changes in

trade and shipping patterns which are occurring at the moment.

Looking across countries in SSA, it is interesting to note that the

most recent Global Competitiveness Report ranks Namibia as the

most developed port infrastructure (16th in the world, out of 139).

Côte d’Ivoire (42nd), South Africa (49th) and Ghana (59th) are placed

in the top half of the rankings. As is the case with a number of

other important aspects related to the business environment,

Angola is one of the worst ranked countries (136th). The landlocked

Zambia, Malawi and Uganda have low rankings in terms of

accessibility to ports, reflecting the poor cross-border infrastructure

on the continent.

In contrast to the other infrastructure sectors, information and

communication technology infrastructure seems to be developing

rapidly. The fastest expansion has taken place in voice services, with

internet services growing slowly.

An assessment of the severity of these various infrastructural

problems across SSA is provided by the World Economic Forum’s

Global Competitiveness Report’s sub-indices (Table A5).

Businesses wanting to understand the layout of the infrastructure in

a specific country can use the interactive mapping tool on the

African Development Bank’s Africa Infrastructure and Country

Diagnosis website. It illustrates the main network infrastructure,

including energy, information and communication technologies, as

well as road, port and rail transport facilities, which all can be

mapped alongside population, topography etc. It is a powerful tool

for understanding local infrastructure, and is available for 29 SSA

countries as well as specific regions (e.g. East Africa).

Trade and logistics

The problems associated with poor infrastructure in SSA are

accentuated by regulatory issues, customs tariffs and procedures

and other issues that make international trade difficult. The World

Bank’s Logistic Performance Index (Table A6) and the World

Economic Forum’s Enabling Trade Index (Table A5) provide

assessments of how easy it is to trade across borders. The World

Bank’s World Development Indicators also provide a brief summary

of customs duties by country and the World Trade Organisation

provides extensive detail. In general, while customs rates are not

onerous, the bureaucratic hassles can be.

Bureaucracy and regulations

The inefficiencies of government bureaucracy are reported as being

a problematic factor for doing business in every single SSA country

in the World Economic Forum’s Executive Opinion Survey. It ranks as

the fourth largest constraint on average but is seen as the biggest

problem in Angola, Mauritius, South Africa and Swaziland.

The best known quantitative assessment of the regulatory

environment is the World Bank’s Doing Business Report, which

looks at issues such as the difficulty in starting and closing a

business. The Heritage Foundation’s Index of Economic Freedom

meanwhile scores nations on 10 broad factors of economic

freedom. Both sources are used as inputs into our operating

environment index, with the data set out in the sources.

A key business issue for many companies is property rights. In

general, these are low across the continent. The World Economic

Forum, the Heritage Foundation and the Property Rights alliance all

analyse this problem.

Good

Decent

Poor

Very poor


Tax regimes

Figure 20: Total effective tax rates¹

Note:

1 Effective tax rates above 100% illustrate a dysfunctional tax regime. No company

would operate under these conditions, implying either tax avoidance/evasion is

widespread or that data is suspect

Source: IFC and PWC


Tax regimes can be punitive in SSA. Actual taxes paid are higher in

the region than anywhere else in the world. In fact, according to the

IFC/PWC Paying Taxes 2011 report, the total tax rate as a

percentage of profit is theoretically more than 100% in six countries

As is the case internationally, the corporate income tax rate is not a

good indicator of how much tax a company will end up paying

because of exemptions/allowances as well as the taxes that need to

be paid on labour and elsewhere. On top of this, corporations also

need to worry about withholding taxes, a problem in many SSA

countries but on which there is limited information. Furthermore,

SSA tax systems can be onerous in terms of time taken to comply

and in the number of payments that have to be made. SSA is at

least moving in the right direction with tax reform: seven SSA

countries cut their income taxes in 2010. Overall, tax regimes are a

major business constraint across most of the continent. Conditions

are extremely different in each country. Effective tax rates are much

lower in Southern Africa than elsewhere in SSA. Other notable

countries with below average effective tax rates include Ethiopia,

Rwanda, Nigeria, Ghana, Mozambique and Uganda. Nigeria’s tax

regime is, however, demanding in the time it takes to comply with

tax regulations. Notably, the large economies where the effective

tax rate is very onerous are the DRC and Angola (Figure 20).

Table A6 lists the effective tax rate by country, as calculated by

accounting firm PWC in conjunction with the International Finance

Corporation. Their Paying Taxes report provides a lot more detail.

Labour market

Labour market issues are a problem across most of the region.

Consider Figure 16: when you put the factors of an inadequately

educated workforce, poor work ethic and the restrictions of labour

regulations together, then labour market obstacles become the

second largest concern of businesses in SSA.

In general, the workforce in SSA is inadequately educated. This

becomes a major constraining factor in the richer economies.

According to the World Economic Forum’s Executive Opinion

Survey, it is a major problem in Angola, Botswana, Mauritius,

Namibia and South Africa. Labour market regulations in contrast are

generally not seen as a major constraining factor in SSA, except

once again in Botswana, Namibia and South Africa. Altogether,

labour issues are a greater problem in the more developed SSA

countries, particularly in Southern Africa. In fact, in Botswana,

labour market issues are seen as by far the dominant constraint in

doing business.

0% 20% 40% 60% 80% 100%

Namibia

Zambia

Botswana

Lesotho

Mauritius

Malawi

South Africa

Ethiopia

Rwanda

Nigeria

Ghana

Sao Tome

Mozambique

Uganda

Sudan

Swaziland

Cape Verde

Madagascar

Zimbabwe

Gabon

Liberia

Seychelles

Côte d'Ivoire

Burkina Faso

Tanzania

Guinea-

Senegal

Niger

Cameroon

Kenya

Togo

Mali

Angola

Guinea

Equatorial G

Chad

Congo

Benin

Eritrea

Burundi

CAR

Comoros

Sierra Leone

Gambia

DRC Above 100%


Rental costs

Countries where office rental costs are very high are the DRC,

Nigeria and, above all, Angola (Figure 21). Costs are meaningfully

lower in Kenya, Malawi and Zimbabwe. A similar pattern holds

when you look at retail, industrial or residential costs (Table A6).

Figure 21: Rental costs (US$/square meter of office space)

Note:

1 Angola and Nigeria are above US$50/square meter

Source: Knight Frank


Currency regulations

Many African countries keep their currencies artificially inflated

through harsh currency restrictions. The result is that the exchange

of local currency for international currency becomes difficult. We

look at this in more detail on page 29 in the Finance section.

Political risk

Perhaps surprisingly, political risk is generally not seen directly as

being a major problem in doing business in SSA. In the World

Economic Forum’s Executive Opinion Survey, government instability

and/or coups were ranked as the 14th most worrying issue out of 15

factors (although policy instability was ranked 10th). And when it

comes to concerns, companies have rather specific worries. A survey

conducted by the World Bank Group’s Multilateral Investment

Guarantee Agency (MIGA) shows that the breaching of contracts,

regulatory changes, and transfer and convertibility restrictions are

investors’ main concerns regarding political risk above aspects like

terrorism and civil war (Figure 22). A different survey by Aon Risk

Solutions similarly found that sovereign non-payment, legal and

regulatory, and political interference risks are the key challenges for

trade and investment (Table A7).

Figure 22: Key political risk concerns in developing countries

Notes:

1 Respondents rating the issue as major

2 Sovereign guarantees refers to the cancellation or non-honouring of quarantines

Source: MIGA, EIU


A potential reason why politics rates so low may be that risks in

Africa are decreasing. Most countries are making political and

institutional transitions (though uneven) towards more open and

democratic political systems. SSA had around 30 dictatorships

before the 1990s, which have sharply declined to less than a

handful today. Successful coups peaked at 21 in the 1960s, and

were hardly any better in the 1990s, with 17 coups. However, the

amount dropped to only six in the 2000s. The number of elections

held annually has by contrast increased significantly, together with

their credibility. The April 2011 election in Nigeria, for example, was

declared the most credible the country has seen since multiparty

rule, indicating the deepening of Nigerian democracy.

The political risk profile of each country is highlighted in Figure 23.

Some country ratings may have changed since the publishing of the

report (e.g. due to the recent political tension in Côte d’Ivoire).

Political risk insurance (PRI) is available to help mitigate and manage

unpredictable risks, and to unlock better access to finance (PRI

generally gives comfort to lenders). It can be provided through

private PRI companies, public providers (usually national export

credit agencies which support investors and lenders from their home

country) and several multilateral agencies.

0 10 20 30 40 50

War/civil war

Terrorism

Expropriation

Civil disturbance

Sovereign guarantees

Transfer restrictions

Regulatory changes

Breach of contract

Next 12 months Next three years

0 10 20 30 40 50

KenyaZimbabweMalawiMaliCAR

RwandaMadagascar

NamibiaBotswanaUganda

CameroonMauritaniaSenegal

Côte d'IvoireSierra LeoneTanzaniaZambia

South AfricaMauritius

MozambiquChad

Equatorial GGhanaSudanTogoDRC

NigeriaAngola $150

$70


Figure 23: Political risk

Note:

1 No SSA country’s risk profile was rated as “low”

Source: AON Risk Solutions


The legal framework

Various bodies such as the World Economic Forum and World Bank

provide assessments of legal issues covering judicial independence,

the ability to enforce contracts, protection of property rights and the

efficiency of police and courts.

The results show that Rwanda has the strongest and most reliable

institutional framework in SSA. It is followed by Botswana, the

Gambia, Namibia, Mauritius and South Africa. To get a clearer view

of the legal environment of each country, we have extracted the

main legal indicators from the overall institutional ranking (Table

A8). When assessing two major legal aspects for investing in other

countries, the independence of the judicial system and the

protection of investors are vital. Namibia, Botswana, Rwanda,

Mauritius and South Africa are the top five countries with the most

independent judiciaries. Similarly, the strength of investor protection

is most prominent in South Africa, Mauritius, Rwanda, Botswana

and Ghana.

In general, those countries that have adopted the English common

law system are generally highly rated on the World Bank’s legal

rights index (Table A11).

Figure 24: Strength of institutions

Note:

1 No SSA country’s institutional strength was rated as “very strong”



Medium low

Medium

Medium high

High

Very high

Strong

Medium

Weak

Very weak


Finance

Some SSA countries are increasingly developing their local capital

markets to improve the flexibility and effectiveness with which

corporate financing is raised.

However, access to financing is still one of the major challenges

facing businesses wanting to operate in the region. It is ranked the

biggest operating hurdle in 17 out of 29 SSA countries covered in

the World Economic Forum’s Executive Opinion Survey. Only in

South Africa was it significantly down the list of concerns. Even in

countries with relatively sophisticated financial markets —

Botswana, Kenya, Namibia, Nigeria — access to financing was still a

major problem. It is particularly problematic for local companies, but

even international companies can have trouble getting credit for

local operations as international banks are cautious about taking

credit exposure in certain countries — in some instances, credit is

more easily extended to countries which have an official sovereign

rating (Table A9). Financing can also be made more difficult because

of complications in the legal systems that make enforcing debt

repayment difficult.

Here, we highlight the different means of accessing funds, as well

as the complexities of transacting in foreign currency.

Domestic financial market development

According to the latest Global Competitiveness Report by the World

Economic Forum, South Africa ranked first in Africa and ninth in the

world for financial market development, which is on par with

countries like Switzerland and Canada. It offers easy access to

capital, has sound banks and a well-regulated securities market.

Kenya (27th in the world), Mauritius and Namibia are ranked in the

top third, with Botswana, Zambia, Ghana, Malawi, and Rwanda

placed in the top half of the African ranking. However, five of the

bottom 10 countries in the world are from SSA: Angola, Burundi,

Chad, Madagascar, and Mali (Table A10). Access to financing is

particularly problematic for local companies, but even international

companies can have trouble getting credit for local operations as

international banks are cautious about taking credit exposure in

certain countries. Financing is made more difficult because of

problems in the legal systems that make enforcing debt repayment

difficult.

Access to banking sector credit

The banking sector has benefitted from significant reforms over the

last few years, with banking assets more than doubling in the past

decade (reaching US$669bn in 2008), demonstrating that SSA has

become a more substantial player in emerging market banking

(Figure 25).

Figure 25: 2008 total banking assets

Source: McKinsey & Company


South Africa, Namibia, Mauritius, Kenya and Zambia offer a wider

variety of financial products and services which are also more

affordable (Table A10). However, extending credit in local SSA

markets remains constrained due to various factors: poor credit

discipline; high transactions costs; ceilings on bank lending rates;

and borrowers having insufficient collateral (as banks in some

countries only accept a certain range of assets as collateral). When

measuring financial intermediation by looking at the total private

credit extended by banks as a percentage of GDP, most SSA nations

still fall far behind South Africa (Table 3).

Table 3: Private credit by banks as a percentage of GDP (2007)

Source: World Bank Data as at August 2011

According to the World Economic Forum, it is most difficult to

obtain a bank loan in Côte d’Ivoire, Burkina Faso, Burundi,

Cameroon and Mali (these countries were also ranked in the bottom

10 in the world). Kenya, Botswana, Mauritius, South Africa and

Namibia are the easiest five countries in SSA in which to obtain

bank loans (Table A9).

West Africa Central Africa East Africa Southern Africa

<10% Niger Cameroon,

Chad, DRC

Uganda Lesotho,

Malawi,

Zambia

10 – 20% Benin, Burkina

Faso, Nigeria,

Côte d’Ivoire,

Rwanda,

Sudan,

Tanzania

Madagascar,

Mozambique

20 – 50% Senegal Ethiopia,

50 – 75% Cape Verde Namibia

<75% South Africa

2,122

1,210

995

669

497

0 500 1,000 1,500 2,000 2,500

India

Russia

SSA

North Africa

US$bn

Central and Eastern Europe


Another source to analyse is the “Getting Credit” ranking in the

World Bank Doing Business Report 2011. It explores two sets of

issues — credit information registries and the effectiveness of

collateral and bankruptcy laws in facilitating lending. South Africa,

Kenya, Zambia, Namibia and Rwanda ranked in the top five

countries in Africa. However, only 12 of the 45 SSA nations made it

into the top 100 countries (out of 183 nations ranked) for the ease

of getting credit. The worst performers, among others, include the

DRC, Madagascar, Burundi and Eritrea (Table A12).

Gaining financing from institutional investors like pension funds and

insurance companies (except in South Africa), proves to be very

difficult because of the underdeveloped state of the sector.

Donor funding

One area where funding is more readily available is for infrastructure

investment. Historically, the World Bank has been the largest

contributor, but now the combined flows from non-OECD lenders

are equivalent in size to traditional development assistance from

OECD countries and multilateral lending. China is now the largest

single source of funding, with most flows going through the Export-

Import Bank of China. Most of the Chinese and Indian development

flows are closely linked with resource development. Official Donor

Assistance (ODA) flows are spread quite evenly across power,

transport and water supply and sanitation investment. Public-private

partnerships in infrastructure (PPI) focus heavily on information and

communication technology (ICT), and non-OECD finance is skewed

toward power and transport. The Private Participation in

Infrastructure Project Database, which is a joint initiative between

the World Bank and the Public-Private Infrastructure Advisory Facility

(PPIAF), is a good place to gain information on projects.

Access to capital through local equity markets

The number of stock exchanges in SSA has grown from around 12

to 31 over the last decade. South Africa, Kenya, Côte d’Ivoire,

Ghana and Nigeria’s exchanges are the easiest countries in SSA in

which to raise money by issuing shares (Table A10).

South Africa’s Johannesburg Stock Exchange (JSE) has the largest

market capitalisation of approximately US$957bn (at the end of

2010). Nigeria and Kenya follow, with capitalisation of US$53bn

and US$14bn respectively (Table A13). SSA has slowly but surely

been implementing reforms to urge companies to list on their local

exchanges and increase liquidity. Some countries have reduced

corporate tax rates, listing fees are declining, trading hours are

being extended, and new technologies are being introduced.

Various initiatives to integrate the capital markets within certain

regions like SADC, the EAC and ECOWAS have achieved some

alignment of rules, technology and systems, which should pave the

way for more cross-border listings and offer issuers access to wider

markets.

However, more reforms are needed — apart from the JSE, and to

some extent the Nigerian Stock Exchange, SSA exchanges still battle

with a small number of equity listings (particularly by local

companies), low liquidity levels, and inadequate market

infrastructure. The annual turnover ratio, for instance, remains very

low, except in South Africa — the ratio in 2010 was less than 13%

in the countries where data was available (Table A13).

Corporate bond issues

A World Bank study on local sources of financing in Africa published

in 2009 reports that issuing corporate bonds is a more viable means

of local financing as long-term bank loans are costly and the

macroeconomic environment is performing reasonably well. Some

African governments have been issuing debt at longer terms over

the past few years to establish a benchmark yield for corporate

bond issues and ultimately encourage companies (especially in the

infrastructure sectors) to issue bonds as a way of financing. South

Africa has the most active corporate bond market, followed by

Botswana, Mauritius and Namibia (Table A14). Recent examples of

successful corporate bond issues are Kenya’s electricity utility

KenGen and mobile phone company Safaricom, which tapped the

local fixed income market and were even oversubscribed. Nigeria

and Uganda’s corporate bond markets are dominated by bank

issuances.

Nevertheless, most markets remain small and illiquid where they

exist at all — the South African corporate bond market is by far the

largest and stands at around 14% of GDP. More progress is needed

in developing well-established yield curves together with low and

stable inflation and interest rates, improved corporate governance

and transparency and developing well-regulated financial

institutions.

Foreign exchange complexities

Another key obstacle to operating in financial markets is the foreign

exchange complexities: the ability to transact in a foreign currency

can prove challenging, especially in countries operating managed

exchange rate regimes.

Foreign exchange liquidity is often constrained in heavily managed

exchange rate environments. Supply and demand dynamics are in

many cases affected by stringent exchange controls and local tax

obligations. Malawi and Ethiopia stand out as particularly

problematic countries. Managed currencies, like the Angolan

kwanza, Ethiopian birr, Malawian kwacha and Nigerian naira are

also predisposed to weakness when supply shortages escalate,

increasing the cost of foreign loans.

Aside from the intricacies involved in being able to buy foreign

currency, companies should be aware of foreign currency

regulations, which are on average the 10th most problematic factor


for doing business in the 29 countries identified in Table 4. It is

evident that this issue poses one of the biggest challenges in Malawi

and Ethiopia. According to the latest Global Competitiveness

Report, restrictions on capital flows are more relaxed in Mauritius,

Botswana, Uganda, Rwanda, Zambia and Ghana relative to Burundi

and Angola, where flows are highly regulated (Table A11).

While transacting in foreign currencies might be difficult in certain

countries, there are measures available to hedge currency exposure.

South African markets are deep and liquid and offer a huge range

of potential risk management structures from simple forwards and

swaps through to exotic options. A variety of countries have

operational forward markets, although in many cases liquidity and

tenure can be tricky to attain. Markets in Botswana, Kenya and

Zambia can be considered liquid, with instruments out at least one

year and occasionally longer. Ghana, Tanzania and Uganda have

operational but less liquid (and occasionally completely illiquid)

markets.

When hedging instruments are not available, alternative (proxy)

hedges are an option, i.e. the exchange rate is correlated to a more

liquid market. Strictly speaking, the euro and rand are proxy hedges

for the CFA and CMA countries. But given the very limited risk of

devaluations, these can almost be treated as perfect hedges.

Outside of these two cases, however, proxy hedges are limited.

Table 4: Where do foreign currency regulations rank among 15 of the most

problematic factors for doing business?

Note: 1 = most problematic, 15 = least problematic Source: World Economic Forum Data as at August 2011

Country Ranking

South Africa 11

Nigeria 10

Angola 6

Sudan -

Ethiopia 1

Kenya 13

Tanzania 12

Cameroon 10

Uganda 13

Ghana 11

Côte d'Ivoire 15

Botswana 13

Equatorial Guinea -

Senegal 9

DRC -

Gabon -

Mozambique 6

Zambia 12

Burkina Faso 11

Madagascar 12

Congo -

Mauritius 11

Chad 15

Mali 10

Namibia 13

Benin 13

Malawi 2

Rwanda 6

Guinea -

Niger -

Swaziland 14

Togo -

Sierra Leone -

Zimbabwe 14

Eritrea -

CAR -

Burundi 13

Gambia 10

Lesotho 15

Seychelles -

Cape Verde 12

Guinea-Bissau -

Liberia -

Comoros -

Sao Tome and Principe -


Resources

Africa offers huge potential for resources companies. The continent

possesses a large share of the world’s natural resources. And as

global demand for commodities is expected to continue its upward

trajectory, the continent’s extractive industries (including mining, oil

and gas) have high growth potential.

Africa’s reserves in focus

According to an Ernst & Young survey, mining and metals, oil and

gas, and the exploitation of natural resources are the top three

sectors that investors think will offer the greatest growth potential

in the next two years.

Figure 26: Sectors in Africa that investors think offer the best potential (%)

Note:

1 Respondents (562 business leaders) selected several answers

Source: Ernst and Young


Reserves

The continent’s high growth potential mainly stems from its

abundance of resources. In fact, the majority of platinum, diamond

and cobalt reserves lie in SSA (Table 5). A large proportion of these

reserves remains untapped, providing an enormous opportunity for

resource and infrastructure investors. According to the US

Geological Survey 2010, only six out of the 45 countries we cover

do not hold reserves of the major resources covered (Table A15).

From an export perspective, petroleum and gas tops the resource

list.

Table 5: Top 10 resources in Africa

Source: US Geological Survey, Mineral Yearbook 2010, Edelweiss, BP Data as at August 2011

Figure 27: Top ten resource exports from Africa (US$bn)

Source: US Geological Survey, Mineral Yearbook 2010, Edelweiss


Key resource Units

Total reserves

— Africa

World

reserves

% of world

reserves

Platinum Million kg 63 71 89

Diamond Million carats 385 580 66

Cobalt Thousand MT 3,670 6,600 56

Chromium Million MT 130 350 37

Manganese Million MT 182 540 34

Gold Thousand MT 8 47 16

Gas Trillion cubic feet 467 6,254 8

Crude oil Billion barrels 127 1,333 9

Coal Billion MT 35 645 5

Copper Million MT 27 540 4

0 10 20 30 40 50

Nickel

Ores and uranium

Aluminium

Coal

Silver and platinum

Copper

Precious stones

Iron ore

Gas

Petroleum 177

3

3

3

3

3

4

4

4

6

8

9

13

14

15

15

15

21

25

0 6 12 18 24 30

Automotive

Renewable energy

Business services

Retail

IT services

Industrial machinery

Infrastructure

Electronics

Transportation

Energy

Financial services

Telecommunications

Construction

Hotels and tourism

Consumer products

Exploiting resources

Oil and gas

Mining and metals 25


Yet resource reserves are concentrated in:

• Crude oil: Angola, Nigeria and Sudan

• Natural gas: Nigeria

• Coal: South Africa and Mozambique

• Gold: South Africa and Ghana

• Platinum: South Africa

• Diamonds: Botswana, South Africa and Angola

• Bauxite: Guinea

• Copper: Zambia and the DRC

• Nickel: South Africa and Botswana

• Iron ore: South Africa

Demand driving growth

Global resources demand is driven primarily by the needs of

developed nations and emerging markets such as China, due to a

rise in urbanisation and infrastructure development, and India,

which currently has a growing middle class. Table 6 illustrates how

this demand has increased between 2000 and 2009.

Table 6: The change in demand from 2000 to 2009

Note: 1 Data was taken from 2005 to 2010 Source: GFMS, WGC, ICSG, BP Data as at August 2011

Coal is a good example of demand driving growth. The International

Energy Agency’s latest outlook expects world coal consumption to

increase by 56% from 2007 to 2035. In China specifically, total coal

consumption is expected to grow by more than 100% between

2007 and 2035. The agency further predicts that India will become

Asia’s largest coal importer. The two Asian giants now see African

coal reserves as the last frontier, as Indonesian and Australian

markets are becoming more saturated. South Africa, Mozambique

and Botswana all have major deposits and are expected to benefit

from increasing demand.

Figure 28: Coal consumption in China by sector

Source: IEA


Where is investment going?

There is already a huge amount of investment in the African

resources sector. According to the US Geological Survey, production

in Africa in 2015 will add 50% to existing world uranium

production, 15% – 20% to platinum output, as well as a

meaningful percentage to global copper, gold, and nickel

production. Output data is available in Tables A15, A16 and A17,

but the key countries supporting the surge in global production are:

• Uranium: Namibia, Niger, South Africa, Tanzania and Malawi

• Platinum: South Africa

• Copper: The DRC, Zambia and Eritrea

• Gold: The Congo, Côte d’Ivoire and Zimbabwe

• Nickel: Zambia and Madagascar

• Diamonds: Angola

• Tin: Rwanda

South Africa remains the main focus of most companies, but a large

number of projects are also underway in the DRC, Botswana,

Ghana, Namibia, Tanzania, Zambia, and Zimbabwe. More projects

are also being considered in Burkina Faso, Côte d’Ivoire, Liberia,

Madagascar, Mali, and Uganda (Table A18).

China India World

%

change

Unit

change

%

change

Unit

change

%

change

Unit

change

Oil ('000 bpd) 81 3,853 41 929 10 7,945

Coal (million tonnes) 130 870 70 102 40 941

Copper ('000 tonnes) 242 4,544 116 308 16 2,367

Aluminium ('000 tonnes) 295 10,310 135 813 37 9,545

Platinum ('000 oz) 80 960 n/a n/a 10 645

Gold (tonnes)1 33 242 129 326 -1 -44

0

1

2

3

4

5

6

Electricity Industrial Other sectors Total

2007 2020 2035billion tonnes


Resource potential and policies

Though the continent is lush with natural resources and

opportunities, companies considering investing in Africa will need to

gain a thorough understanding of the business environments they

are entering. The Fraser Institute’s Survey of Mining Companies

2010 – 2011 measures the policy attractiveness of 79 countries’

mining sectors.

Most of the African countries studied in the survey would have been

ideal investment destinations, assuming they adopted best practices

for doing business (Figure 29). Not surprisingly, when assuming

current regulations and land restrictions, companies are more

hesitant to invest.

The DRC, Zimbabwe and (interestingly) South Africa, were identified

as countries with high mineral potential but deterrent current

regulations. Botswana and Burkina Faso’s prevailing regulatory

environments, however, are almost equal to their high mineral

potential. Both countries have had sustainable mining policies

during the past number of years which have attracted and retained

exploring and operating companies.

In the last four years, Africa’s average policy attractiveness score has

not improved. It scored 40.5 in the latest survey compared to 41.8

previously. The top African performer is Botswana, moving up the

ladder from 66.5 to 74 (where 100 = high and 0 = low). Similarly,

Namibia climbed from 49.2 to 57.9 (this could, however, drop in the

next survey as Namibia’s authorities are currently amending their

policies to gain more benefit from mining revenues). The DRC is the

worst performer, sliding down the rankings (to 7.8 from 18.9). The

institute believes the drop could reflect the uncertainty over mining

nationalisation.

The Fraser Institute asked companies how a large mineral potential

weighs up against poor public policy factors such as taxation and

regulation in exploration investment. Mineral prospects only slightly

outweighed public policy — 60:40.

Challenges facing investors

Details specific to resource investors that emerged from the Fraser

Institute survey include:

Taxes

Governments are increasingly targeting mining sectors to support

their economies through the introduction of or increase in

additional taxes. Namibia, for instance, is set to introduce a mining

windfall tax as part of its efforts to receive more benefit from the

lucrative industry. According to the Fraser Institute survey,

Botswana, Burkina Faso and Ghana have the least complex tax

regimes, and the DRC and Zimbabwe have the most challenging.

Figure 29: Actual and potential investment attractiveness

Source: Fraser Institute


0 20 40 60 80

Colombia

Papua New G

DRC

Mexico

Chile

Peru

Brazil

Mongolia

Indonesia

Philippines

Turkey

Burkina Faso

Mali

Tanzania

Zambia

Botswana

Ghana

Kazakhstan

Finland

Canada

Sweden

Guinea

Greenland

South Africa

China

Zimbabwe

Argentina

Namibia

Guatemala

Madagascar

Ecuador

USA

Kyrgystan

Russia

Panama

Romania

Ireland

Bolivia

Vietnam

Honduras

Niger

Venezuela

Norway

New Zealand

India

Bulgaria

Spain

Actual Potential


Political risk

Nationalisation/indigenisation is a major contributor to investor

fears. A recent example is Zimbabwe’s new mining regulation where

companies have to hand over a 51% stake in their shares to local

designated entities within the next few months. Namibia has also

recently decided to hand future mining and exploration rights to a

state-owned firm, Epangelo Mining. From an overall political

stability point of view, Botswana and Namibia performed best, with

Zimbabwe and the DRC’s environments being strong deterrents to

investment.

Security of investment

Most companies are concerned about the security of tenure of their

investments. Legal systems play a big role in whether it would be

possible to protect investments. The DRC and Zimbabwe’s legal

systems are deemed the most challenging, while Botswana, Burkina

Faso and Namibia’s are the most transparent, fair and efficient.

Trade barriers

In general, tariff and non-tariff barriers, restrictions on profit

repatriation, and currency restrictions in Africa are not deterrents to

investment (especially in Botswana, Namibia and Ghana). The DRC

and Zimbabwe’s trade barriers, however, prove to be discouraging.

The Register of African Mining 2011 report, published by the

Resource Information Unit, gives a detailed snapshot of the African

mining industry by focussing on the political and economic

environment of each country, the companies active in the country,

and, most importantly, the mining regulations of each jurisdiction.


Consumption

There are a number of reasons why companies should be looking at

Africa as a consumer market. These include:

• A large population (840 million people)

• Forecast of average population growth rate of 2.25% p.a. over

the next few years

• A young demographic profile

• Forecasts of high levels of income growth

• Forecasts of higher urbanisation rates

• Rapid consumption growth (Figure 31)

Where are companies going?

To give an idea of where some retailers are heading, we took a

sample of 23 South African fast moving consumer goods (FMCG)

companies, and assessed where they currently have an SSA

footprint (Figure 30). The favourites were our Southern African

neighbours, starting with Namibia, Botswana, Swaziland,

Mozambique and Lesotho, and a bit further north, Zambia.

Figure 30: South African FMCG companies in SSA (number of companies)



Figure 31: Average consumer spending growth (2000 – 2010)

Source: EIU


3

3

4

4

4

5

5

7

8

8

9

9

9

9

12

12

13

16

18

21

0 5 10 15 20 25

DRC

Eritrea

Burundi

Ethiopia

Gabon

Angola

Cameroon

Kenya

Ghana

Nigeria

Malawi

Tanzania

Uganda

Zimbabwe

Lesotho

Zambia

Mozambique

Swaziland

Botswana

Namibia

-5% -1% 3% 7% 11% 15%

Zimbabwe

Côte d'Ivoire

Malawi

Togo

Mali

Madagascar

Eritrea

US

Niger

Benin

Congo

Gambia

Guinea

Comoros

Burkina Faso

DRC

Mozambique

Kenya

Brazil

South Africa

Gabon

Swaziland

Senegal

Mauritius

Cameroon

Ghana

Namibia

Sudan

Tanzania

Rwanda

Chad

Botswana

Burundi

India

Uganda

Zambia

Cape Verde

Seychelles

China

Guinea-Bissau

Angola

Nigeria

Lesotho

Sao Tome

Ethiopia

Equatorial G

Sierra Leone


Income brackets

While SSA as a whole is proving to be a key destination for

consumer goods, it is important to take account of country

differences. Ethiopia, for instance, has a large population and a

decent market size, but it would probably not offer a concentration

of high-income earners for high-end retailers.

To gauge the market potential for different products, we split the

number of individuals with household consumption into five

different income brackets, ranging from below US$2,000 to above

US$20,000. This is summarised in Table 7. Full data is provided in

Table A19. This data is derived from Canback Dangel and should be

seen as rough estimates only. Unfortunately, the data becomes very

unreliable when looking at high incomes; as a result our top bracket

had to cover incomes from US$20,000 and above.

Given its huge population and large market size it is not surprising

that Nigeria dominates the top of the table. South Africa came first

in the higher income brackets. Interestingly, Mauritius, with a

population of only 1.3 million people, fared well in the middle-to-

high income brackets; only 2% of its population falls into the lowest

basket. Namibia and Botswana similarly did well in the highest

bracket — reflecting their high GDP/capita and skewed income

distributions.

When one gets to the lowest categories it is generally the countries

with the largest populations that dominate; South Africa is the only

populous country not to feature in the lowest category.

Table 7: Ranking of the countries with the highest number of consumers in

each income bracket (brackets based on constant 2005 US$PPP)

Source: Canback Dangel


What do consumers spend on?

Food and beverages consumption makes up the largest share of

household consumer spending (Figure 32), and is expected to rise to

US$544bn by 2020.

Figure 32: Share of household spending in US$bn (2008)

Source: World Bank Development Indicators, Euromonitor, McKinsey Global Institute


But while the food and beverage group will remain the major

recipient of income, household spending on other areas like retail

banking, housing, health care, education and other consumer goods

will grow more rapidly than food consumption as discretionary

incomes increase (Figure 33). According to the McKinsey Global

Institute, 90% of African households currently have some

discretionary income (which is US$5,000 and above, and is a level

where people begin spending more than half of their income on

items other than food).

Figure 33: Share of African household spending by income bracket

Source: Canback Dangel, McKinsey Global Institute, Euromonitor


<US$2,000 US$2,000-5,000

US$5,000-1,0000

US$10,000-20,000 >US$20,000

1 Nigeria Nigeria South Africa South Africa South Africa

2 Ethiopia South Africa Nigeria Nigeria Nigeria

3 DRC Sudan Sudan Sudan Namibia

4 Tanzania Kenya Kenya Mauritius Botswana

5 Kenya Cameroon Cameroon Kenya Mauritius

6 Sudan Ethiopia Mauritius Cameroon Sudan

7 Uganda Uganda Uganda Angola Kenya

8 Mozambique Tanzania Angola Côte d'Ivoire Cameroon

9 Ghana Ghana Côte d'Ivoire Uganda Côte d'Ivoire

10 Madagascar Angola Ghana Botswana Angola

2 1

149

35

29

31

38

18 25

2000 2008

US$2,000-5,000

US$10,000-20,000

US$5,000-10,000

>US$20,000

<US$2,000

3.5

3.2

-0.8

1.5

-0.2

Annual growth rate (2000-2008)

Discre

tionary in

come

0 80 160 240 320 400

Food and beverages

Housing

Non-food consumer goods

Healthcare

Telecom

Banking

Education

Other


Countries with high consumption growth potential

In addition to the current market size companies should also take

into account future market growth. While our section on growth

looked at overall GDP prospects, it is useful to be more specific. We

do this by looking at:

• Population size: to provide an indication of potential market size

• Forecast population growth rates: to provide an indication of

growth in market size (Figure 34)

• Forecast per capita GDP growth rates: to provide an indication

of the growth in future purchasing power

• Urbanisation growth rates: to provide an indication of future

market concentration

Table 8 summarises the top 10 countries according to each of these

factors.

Table 8: Ranking of top countries on key consumption criteria

Note: 1 Growth rates for the populations and GDP per capita is the forecast average annual growth rate between 2010 and 2016. The urbanisation growth rate is the forecast rate between 2010 and 2020 (absolute growth) Source: IMF, UNHabitat, RMB FICC Research Data as at August 2011

Looking at the data graphically (Figure 35), countries that stand out

are Uganda, Ethiopia, Kenya and Angola. It is interesting to note

that while South Africa has a sizeable population, its population

growth rate, GDP per capita growth rate and urbanisation rate are

forecast to be relatively low.

Figure 34: Population growth rates throughout the region (2010 – 2016)



Population Population growth

Per capita GDP growth

Urbanisation growth

Nigeria Uganda Sao Tome Burundi

Ethiopia Gambia Ethiopia Eritrea

DRC Liberia Mozambique Uganda

South Africa Niger Zimbabwe Malawi

Tanzania DRC Zambia Equatorial G

Sudan Angola Tanzania Chad

Kenya Côte d’Ivoire Ghana Mali

Uganda Mali Rwanda Rwanda

Ghana Eritrea Niger Ethiopia

Côte d’Ivoire Congo Seychelles Kenya

Rank

1

2

3

4

5

6

7

8

9

10

-1% 1% 2% 3% 4%

Swaziland

Zimbabwe

Seychelles

Mauritius

Namibia

South Africa

Botswana

Gabon

Lesotho

Sao Tome

Burundi

Tanzania

Mozambique

Comoros

Rwanda

Burkina Faso

Ethiopia

Senegal

Zambia

Guinea-Bissau

Madagascar

Chad

Cameroon

CAR

Guinea

Togo

Ghana

Sierra Leone

Nigeria

Benin

Malawi

Cape Verde

Kenya

Equatorial G

Congo

Eritrea

Mali

Angola

DRC

Niger

Liberia

Gambia

Uganda


Figure 35: Population size, GDP per capita growth, population growth and urbanisation growth rates

Note:

1 Size of the bubble reflects the current population size. Grey bubbles reflect an

urbanisation rate above 50%

Source: RMB FICC Research, UNHabitat


Combining the indicators into a single rank

Given that different countries stand out on the list, for each of the

different measures (population size, population growth, per capita

GDP growth and urbanisation rate, Table A20), we created an

equally weighted ranking index that combines the variables into a

single measure. This index provides us with a gauge of which

countries rank the highest when all four measures are taken into

account (Table 9). Uganda, Ethiopia, Kenya, Angola and Tanzania

have with the most favourable macroeconomic backdrop for

consumption spending growth.

Table 9: Top 10 countries that provide a favourable macroeconomic

backdrop for consumption growth

Source: RMB FICC Research Data as at August 2011

We combined our macroeconomic rank with our operating index.

Uganda, Ethiopia and Kenya stand out as having sound

consumption growth underpinnings and acceptable operating

conditions.

Figure 36: Macroeconomic rank and ease of doing business



-2

0

2

4

6

8

0 1 2 3 4 5

Population growth (%)

GDP per capita growth (%)

South Africa

Zimbabwe

Ethiopia

Tanzania

GhanaAngola

KenyaNigeria

UgandaMalawi

Rank Country

1 Uganda

2 Ethiopia

3 Kenya

4 Angola

5 Tanzania

6 Ghana

7 Nigeria

8 Malawi

9 Niger

10 Liberia

6

8

10

12

14

16

0 1 2 3 4 5 6Macro economic rank

Operating environment index

Uganda

Ethiopia

Kenya

Ghana

Angola

Niger

Liberia

TanzaniaNigeria

Malawi


Infrastructure

We noted in our coverage of the operational environment that a

lack of adequate infrastructure is the third largest challenge faced

when doing business in Africa. This shortfall, however, is an

opportunity for companies in the infrastructure sector.

Where infrastructure is weakest

The lack of infrastructure stretches across all capital goods that are

important to facilitate the business environment. The continent lags

in the availability of paved roads, telephone lines, electricity

coverage and sanitation. There is also significant room for

information technology development.

According to the most recent Global Competitiveness Report by the

World Economic Forum, some of the countries in which

infrastructure development is the weakest include Uganda, Malawi,

Nigeria and Angola (Figure 37).

Figure 37: Infrastructure ranking among the African countries



While the deficit should be a reflection of the opportunities that

exist for companies that build infrastructure, it doesn’t imply that

the countries will carry out the necessary investment spending,

considering that the investment-to-GDP ratio in SSA is only 22%

compared to 42% in emerging Asia. SSA is clearly not spending

what it needs to.

Infrastructure projects

The World Bank reported that between 2000 and 2009, 43 SSA

nations implemented 238 infrastructure projects with private

participation (PPI), with investment totalling US$80bn. In fact, SSA

accounted for 9% of total investment into developing countries

during this period. The PPI activity was mainly concentrated in

Nigeria and South Africa, but it is set to diversify more in the coming

years as some countries are expected to significantly increase

spending on infrastructure development.

The telecommunications sector was most successful, attracting 76%

of regional investment. Transport came in second at 14%,

dominated by seaport and railroad projects, followed by the

electricity sector, which accounted for 10% of regional PPI

investment, and mainly focussed on electricity generation.

Market potential

A better way to look for opportunities in the infrastructure sector is

to use actual and forecast investment spending. We use the IMF

numbers. This methodology provides an indication of:

• Which countries have the highest level of investment spending

at the moment

• Which countries are forecast to increase investment spending

the most over the next five years

A comparison of investment spending figures for 2010 shows that

South Africa and Nigeria are spending the most in SSA (US$77bn

and US$55bn respectively). South Africa’s investment spending is

focussed on developing electricity generating capacity, rail and

roads. Nigeria’s investment spending focuses on improving

electricity generation capacity, roads and telecommunications. The

25 African countries that had the highest level of investment

spending in 2010 are illustrated in Figure 38.

Figure 38: Investment spending in 2010



0

28

56

84

112

140

Namibia

Mauritius

South Africa

Botswana

Swaziland

Rwanda

Kenya

Ghana

Cape Verde

Benin

Ethiopia

Zambia

Mozambique

Lesotho

Mali

Cameroon

Uganda

Zimbabwe

Madagascar

Malawi

Burundi

Burkina Faso

Nigeria

Angola

Chad

Rank Better infrastructure Weaker infrastructure

0

20

40

60

80

South Africa

Nigeria

Angola

Kenya

Equatorial G

Ghana

Ethiopia

Tanzania

Uganda

Zambia

Botswana

Senegal

Cameroon

DRC

Gabon

Namibia

Chad

Niger

Mauritius

Congo

Mozambique

Madagascar

Mali

Burkina Faso

Malawi

US$bn


However, while South Africa and Nigeria’s spending on

infrastructure development are the highest in the region, they do

not have the highest forecast investment spending growth rates.

Angola, Madagascar, Zambia, Mozambique and Ethiopia are all

forecast to increase investment spending by more than 60% over

the next five years. South Africa and Nigeria are forecast to increase

investment spending by “only” 23% and 28% respectively by 2016

(Figure 39 and Table A21).

Figure 39: Weighing the countries according to investment spending and forecast investment growth

Note:

1 South Africa and Nigeria aren’t shown as investment spending is a lot higher than

the other countries



Angola, Ethiopia, Tanzania, Ghana and Uganda stand out as

countries that should provide most of the opportunities for

infrastructure construction businesses. These countries are forecast

to have relatively sizeable investment spending growth forecasts for

the next five years. South Africa and Nigeria also provide

opportunities due to the sheer size of their current investments and

positive growth forecasts.

What are the biggest infrastructure shortfalls?

Table 10 compares the stock of infrastructure of middle-income

African countries with that of other middle-income countries across

the globe.

Table 10: A comparison of infrastructure development in middle-income

countries

Source: African Development Bank Data as at August 2011

Power infrastructure remains the major obstacle to competitiveness

in SSA, but has the potential to become one of the most attractive

sectors to invest in. According the International Energy Agency’s

(IEA) World Energy Outlook, the percentage of people in SSA who

have access to electricity is 29%, with urban and rural access at

58% and 13% respectively. In fact, the whole of Africa produces

only slightly more electricity than a country like Brazil every year.

Figure 40: Electricity production in 2008

Source: International Energy Agency

Data as at October 2010

-60

-20

20

60

100

140

0 3 6 9 12

AngolaEthiopia

Tanzania

Ghana

Uganda

% growth

US$bn investment

African middle-income countries

Other middle-income countries

Paved road density (km/100sq km)

284 461

Total road density (km/100sq km)

381 106

Main-line density (/thousand population)

142 252

Mobile density 277 557

Internet density 8.2 235

Generation capacity (megawatts per m pop)

293 648

Electricity coverage (% population)

37 88

Improved water (% population)

82 91

Improved sanitation (% population)

53 82

0

900,000

1,800,000

2,700,000

3,600,000

4,500,000

Brazil

Africa

India

Russia

Japan

EU

China

US

GWh


Of concern is that the population rates in SSA are outpacing

electrification rates. The IEA says this could result in SSA being the

only region in the world where the number of people without

access to electricity will increase (from 587 million in 2008 to 698

million expected in 2030). Some governments are increasing

investment (and even hiking tariffs) to make the sector more

attractive to private investors: Angola is planning to overhaul dams

and power grids to end all power cuts by 2016; Kenya is looking at

other means of power sources as it depends too heavily on good

rainfalls to generate hydro-electricity; and Zambia is expected to

increase power supply to meet the increasing demand as new

energy consuming copper projects come online. But not all

countries will carry out the necessary investment spending, and the

investment requirements are high (Table 11).

Table 11: Investment requirements to electrify all households by 2030

Source: UNDP


If you use the Global Competitiveness Index to provide information

of their most pressing infrastructure shortfalls, it seems as if the

countries that provide most opportunities for infrastructure

development (South Africa, Nigeria, Angola, Ethiopia, Uganda,

Tanzania and Ghana) will have to spend money on electricity and

railroad infrastructure to improve their competitiveness (Table A21).

Additionally, Nigeria, Angola, Tanzania and Uganda will have to

develop their roads, ports (actual ports and access to) and air

transport. More specifically, government investment (and therefore

opportunities for private investors) will go to the following areas:

• South Africa: Electricity supply and rail infrastructure

• Nigeria: Electricity, rail, road, port and air transport infrastructure

• Angola: Electricity, rail, road, port and air transport infrastructure

• Ethiopia: Electricity and rail infrastructure

• Uganda: Electricity, rail, road, port and air transport

infrastructure

• Tanzania: Electricity, rail, road, port and air transport

infrastructure

• Ghana: Electricity, rail and road infrastructure

While Africa’s infrastructure deficit is a significant constraint, it is

recognised. But we acknowledge Angola, Ethiopia, Tanzania, Ghana

and Uganda are all forecast to spend the most on infrastructure

development over the next five years.

(US$bn) 2010 – 2015 2016 – 2030 2010 – 2030

Africa 81 262 343

Sub-Saharan Africa 80 262 342

World 223 477 700


Snapshot (2010 statistics)

• Investment attractiveness: 3.5 (9th out of 45)

• GDP (market prices): US$85.3bn (3rd out of 45)

• GDP (purchasing power): US$107bn (3rd out of 45)

• GDP growth 2011 – 16: 7.5% (7th out of 45)

Most problematic factors for doing business

Note: From a list of 15 factors, respondents were asked to list the five most problematic for doing business in the specific country and to rank them 1 (most problematic) and 5

(least problematic). The bars in the figure show the responses weighted according to their rankings

Source: Global Competitiveness Report 2010 – 2011 (World Economic Forum)


Strengths

• SSA’s third largest economy, with a rising middle class

• One of the fastest growing economies in the world

• Oil wealth

• Great need for infrastructure

Challenges

• A very weak operating environment: The highest levels of

corruption on the continent; inadequate physical infrastructure

and insufficient investment; high levels of bureaucracy; regular

electricity shortages; high tax rates; highest property costs on

the continent; a judiciary lacking in independence; lack of skilled

labour and restrictive local hiring requirements

• Underdeveloped financial sector: Extreme difficulty in raising

capital; restrictions on capital flows; a currency that is not always

tradable

• Dependence on oil, with production forecast to peak in 2015

0% 5% 10% 15% 20% 25% 30%

Government bureaucracy



Corruption

Access to financing


Labour regulation

Poor work ethic

Inflation

Tax regulations

Policy instability

Tax rates

Poor public health

Government instability/coups

Crime and theft

Angola

• Population: 19.1m (14th out of 45)

• GDP/capita (market prices): US$4,478 (8th out of 45)

• Operating environment score 1.9 (37th of 45)

• Openness to foreign investment: Very restrictive




• GDP (market prices): US$14.0bn (14th out of 45)

• GDP (purchasing power): US$28.5bn (12th out of 45)







Strengths

• A very good operating environment: Good infrastructure, an

efficient legal environment, the least corrupt country in SSA, low

taxes, an efficient financial sector, open to foreign investors

• A history of strong economic growth, democracy and good

economic management

• Extremely low political risk

• Proximity and access via SACU to the South African and

Namibian markets and ports

• A good resource endowment and good regulatory policies

• Tourism potential

Challenges

• A small population of only 1.8m spread over a large area

• High income inequality

• A poor work ethic and lack of education in the workforce

• High wages relative to productivity

• Excessive red tape

• The high prevalence of HIV

• The economy needs to restructure after the financial crisis

• The maturity of the diamond sector

0% 5% 10% 15% 20% 25% 30%

Poor work ethic



Access to financing


Labour regulation

Inflation

Corruption

Crime and theft

Poor public health

Policy instability

Tax rates


Tax regulations


Botswana

• Population: 1.8m (35th of 45)


• Operating environment score: 6.5 (2nd out of 45)

• Openness to foreign investment: Very open




• GDP (market prices): US$8.8bn (23rd out of 45)

• GDP (purchasing power): US$20bn (19th out of 45)







Strengths

• Economic reforms are ongoing

• A stable commercial environment and a relatively free economic

environment

• Good rates of economic growth

• Considerable mining potential

• Access to Francophone West Africa

• Monetary stability because of its utilisation of the West African

franc

• It is welcoming to foreign investment

Challenges

• A small economy, with high levels of poverty

• Because the country is landlocked, trade is often affected by

political instability in neighbouring countries

• Poor infrastructure

• An undeveloped financial sector

• Corruption

• A poorly educated workforce

0% 5% 10% 15% 20% 25% 30%

Access to financing

Corruption

Tax regulations




Tax rates

Labour regulation

Inflation

Poor work ethic


Poor public health

Crime and theft

Policy instability


Burkina Faso


• GDP/capita (market prices): US$598 (27th out of 45)

• Operating environment score: 3.2 (21st out of 45)

• Openness to foreign investment: Open












Strengths

• A large population and economy

• Relatively high GDP/capita and low income inequality

• Monetary stability because of its use of the Central African franc

• Decent fiscal management

• Low trade barriers

• Open to foreign investment

• New investment in oil production and accompanying investment

spending

• Relatively well educated workforce

Challenges

• Uninspiring economic growth

• An undeveloped financial sector

• A very problematic tax regime

• High levels of corruption

• Low levels of legal rights

• Electricity shortages

• High incidence of violent crime

0% 5% 10% 15% 20% 25% 30%

Corruption

Access to financing

Tax regulations



Tax rates

Labour regulation

Poor work ethic

Inflation



Crime and theft

Policy instability

Poor public health


Cameroon



• Operating environment score: 2.7 (28th out of 45)







• GDP growth 2011 – 16: 3.3% (43rd out of 45)






Strengths

• A decent size economy

• Good macroeconomic management

• Good port infrastructure, making it a gateway to the region

• A stock exchange and corporate bond market

• A flexible labour market

Challenges

• High political risk, high corruption

• Low rates of economic growth

• Low levels of economic freedom

• A difficult environment for international trade

• An undeveloped financial system, making accessing business

funding extremely difficult

• Dependence on a few export commodities

0% 5% 10% 15% 20% 25% 30%

Access to financing

Corruption


Policy instability

Tax regulations

Crime and theft

Tax rates




Poor work ethic

Labour regulation

Poor public health

Inflation


Côte d’Ivoire

• Population: 22m (10th out of 45)











Note: Percentage of firms identifying the problem as their greatest obstacle

Source: World Bank Group


Strengths

• A fast growing economy

• Third largest population in SSA

• Huge mineral potential

• The country is “normalising” after decades of economic

mismanagement

Challenges

• A very weak operating environment: Complex regulations and

high levels of bureaucracy; regular electricity blackouts;

dilapidated infrastructure; high property rental costs; tax rates

that can be above 100%; legal rights that aren’t protected; lack

of public services; high internal transport costs

• Low income levels

• High political risk; history of instability; armed groups still

operating; democracy not entrenched

• Extreme levels of corruption

• Macroeconomic instability, with a history of hyper-inflation

• A lack of financial services

DRC

• Population: 70.5m (3rd out of 45)


• Operating environment score: 1.5 (43rd out of 45)

• Openness to foreign investment: Restrictive

0% 10% 20% 30% 40% 50%

Electricity

Access to financing

Tax rates

Practices informal sector

Transportation

Policy instability

Customs & trade reg

Crime, theft and disorders

Licences & permits

Tax administration






• GDP growth 2011 – 16: 3.7% (41st out of 45)

Note: There was no survey available on the operating environment for Equatorial Guinea

Strengths

• A few very rich consumers

• The highest GDP/capita in Africa

• Oil wealth, with new production probably coming online in

2013

• Construction and tourism development

Challenges

• Very low real GDP growth expected

• A very weak operating environment; high corruption, high tax

rates, bureaucracy and a lack of the rule of law

• One of the worst human rights records in the world

• Political uncertainty — questions over who will succeed the

current president

Equatorial Guinea


• GDP/capita (market prices): US$11,033 (1st out of 45)








• GDP growth 2011 – 16: 8.1% (2nd out of 45)






Strengths

• The second largest population in SSA, the fifth largest economy

• Economic growth has averaged over 8% in the past decade

• Forecast to be one of the fastest growing economies in the

world in the next five years

• Investment ratios are good

• Some liberalisation of foreign investment restrictions

• Air infrastructure is good

• Effective tax rates and one of the lowest in SSA. Investment

incentives are available

Challenges

• While the economy is large in aggregate, GDP/capita remains

very low

• Financial matters are complicated: The currency suffers from

endemic liquidity shortages and regular devaluations; the

banking sector is undeveloped; difficult to access funding locally

• Bouts of very high inflation

• Judiciary is seen as weak, lacking in independence and skills, and

corrupt. Property cannot be purchased but only leased from the

state

• Shortage of skilled labour

• While the government is engaged in a slow process of economic

liberalisation, it still remains active in many sectors

0% 5% 10% 15% 20% 25% 30%


Access to financing

Inflation


Corruption


Tax regulations


Poor work ethic

Tax rates

Policy instability

Labour regulation

Poor public health

Crime and theft


Ethiopia

• Population: 84.8m (2nd out of 45)











Note: Percentage of firms identifying the problem as their greatest obstacle

Source: World Bank Group


Strengths

• Meaningful size economy

• High incomes per capita

• Tourism sector performing well

• High investment spending

• Monetary stability because of its involvement in the Central

African franc


Challenges

• Low rates of economic growth, dependence on declining oil

production

• A small population, high levels of poverty

• An unfavourable (but workable) operating environment: High

corruption levels; poor infrastructure (particularly problems with

electricity provision); lack of skilled labour, non-tariff trade

barriers

• Lack of economic reforms, internal political dissent

0% 5% 10% 15% 20% 25% 30%

Electricity

Transportation

Corruption


Informal sector

Access to financing

Tax administration

Customs & trade reg

Crime, theft and disorder

Tax rates

Gabon


• GDP/capita (market prices): US$8,724 (3rd out of 45)

• Operating environment score: 3.2 (22nd out of 45)




• Investment attractiveness: 4.4 (3rd out of 45)



• GDP growth 2011 – 16: 7.9% (3rd out of 45)






Strengths

• Large population and economy

• One of the fastest growing economies in the world, aided by the

recent production of oil

• A relatively good policy environment: Moderate levels of

corruption; low government regulations; a high degree of

investor protection

• Good ports and airports

• A relatively developed financial sector

• Potential for resource and infrastructure development

• A history of democratic and policy stability

Challenges

• Poor rail, road and electricity infrastructure

• High property costs

• Poor health of the population

• Retaining control of public finances given the expenditure

demands spurred by oil production coming online

• The lack of financial development and financial instability is

caused by high inflation

0% 5% 10% 15% 20% 25% 30%

Access to financing


Inflation


Corruption

Tax rates

Poor work ethic

Tax regulations

Policy instability


Crime and theft


Labour regulation

Poor public health


Ghana
















Strengths

• Large population and economy, hub of East Africa

• Good rates of economic growth, driven by consumption, and a

growing and urbanising population

• A developed financial sector, with a sophisticated financial

market and a liquid local currency

• Well developed manufacturing sector

• Decent infrastructure; notably ports and airports

• The cheapest property costs in Africa, strong legal rights, an

efficient labour market and a good education system

Challenges

• High tax rates

• High levels of corruption, burdensome customs procedures

• Continued heightened political risks and ethnic tensions

following the disputed 2007 elections and the need to

implement the new constitution

• Poor rail and electricity infrastructure

• Reliant on agriculture, and on Europe as an export market

0% 5% 10% 15% 20% 25% 30%

Corruption

Access to financing



Crime and theft

Inflation

Tax rates

Tax regulations

Policy instability

Poor work ethic


Labour regulation



Poor public health

Kenya


• GDP/capita (market prices): US$809 (21st out of 45)





• Investment attractiveness: 2.7 (22nd out of 45)









Strengths

• A large population

• A relatively efficient labour market


• A relatively free economic environment

• Resource and tourism potential

• Good levels of basic education

Challenges

• Political and policy instability — the international community

does not recognise the current government

• A poor operating environment: Weakness in the judicial system,

problems in electricity provision; a complex regulatory

environment; poor internal transport infrastructure; high

corruption; relatively high tax and customs duties

• An uninspiring growth outlook

• One of the poorest countries in the world

• Poor financial sector development

0% 5% 10% 15% 20% 25% 30%


Policy instability

Corruption

Access to financing

Crime and theft

Inflation

Tax regulations


Tax rates

Poor work ethic




Labour regulation

Poor public health

Madagascar
















Strengths

• Decent rates of economic growth, prospects from uranium

production

• A growing and urbanising population

• Low effective tax rates and property rental costs

• Strong institutions, liberalised investment laws and strong

protection of legal rights

Challenges

• Very low income levels

• Chronic shortage of foreign exchange can lead to fuel shortages

• Poor levels of infrastructure, notably rail, and high costs of

transport because of its landlocked position

• Reliance on donor funding and tobacco

• Corruption and bureaucracy

• Populist price setting policies

• Lack of skilled labour

0% 5% 10% 15% 20% 25% 30%

Access to financing



Tax rates

Tax regulations

Corruption


Poor work ethic

Crime and theft

Inflation


Policy instability

Labour regulation

Poor public health


Malawi


• GDP/capita (market prices): US$322 (42nd out of 45)


• Openness to foreign investment: Neutral




• GDP (market prices): US$9.7bn (21st out of 45)

• GDP (purchasing power): US$18.1bn (21st out of 45)







Strengths

• High income levels

• Very stable economic and political environment

• The best operating environment in Africa: Advanced and well

regulated financial sector; attractive tax regime; good port

infrastructure; low bureaucracy; good investor protection; a well

developed legal and commercial infrastructure; clear property

rights; a strong independent judiciary; transparent public

institutions

• One of the most open economies in the world to foreign

investment

Challenges

• Small population and limited market size

• Competition, supplier collusion, geographical remoteness

• Government control of key sectors and restrictions and controls

of certain imported products

• Very dependent on trade relations with Europe

0% 5% 10% 15% 20% 25% 30%




Poor work ethic

Access to financing

Corruption

Labour regulation

Inflation

Crime and theft

Tax regulations


Policy instability

Poor public health

Tax rates


Mauritius



• Operating environment score: 7.2 (1st out of 45)













Strengths

• One of the fastest growing economies in the world, spurred by

large FDI projects and continued economic reform

• Relatively low political risk with generally good macroeconomic

policies

• Links with the large South African market

• Excellent resource and tourism potential


Challenges

• An undeveloped financial sector, making accessing financing

difficult, while foreign exchange market regulations can be

problematic

• Low income levels

• Poor physical infrastructure, notably road and rail

• A challenging operating environment: Complex bureaucracy and

high level of corruption; a cumbersome legal system; a lack of

legal rights including the ownership of land; a rigid labour

market

0% 5% 10% 15% 20% 25% 30%

Access to financing

Corruption


Inflation



Crime and theft


Tax rates

Tax regulations

Labour regulation

Poor work ethic

Poor public health

Policy instability


Mozambique
















Strengths

• Political and policy stability, investor-friendly laws

• Excellent port and road infrastructure

• A possible physical entry point into the Angolan, Botswana and

South African markets

• A good operating environment: A very favourable tax regime; a

sophisticated financial sector linked to South Africa’s; relatively

low levels of corruption

• Large mineral and metal resources

Challenges

• Moderate rates of economic growth

• Socioeconomic challenges: Poverty, income inequality, HIV,

education

• Poor labour relations, strong unions, lack of skills, high pay to

productivity, restrictive labour practices

• A relatively small economy, with the population widely spread

out

• The reliance on diamond revenue

0% 5% 10% 15% 20% 25% 30%


Access to financing


Labour regulation

Poor work ethic

Corruption

Tax rates


Crime and theft

Inflation

Tax regulations

Poor public health


Policy instability


Namibia







• Investment attractiveness: 4.9 (2nd out of 45)

• GDP (market prices): US$216.8bn (2nd out of 45)

• GDP (purchasing power): US$377.9bn (2nd out of 45)







Strengths

• Largest population in Africa, second largest economy, gateway

to West Africa,

• Fast economic growth

• Oil wealth

• Large infrastructure spending

• Developed capital markets

• Low-cost labour pool

• Strong non-oil sector

Challenges

• High levels of corruption, bureaucracy and crime, and an

inconsistent regulatory environment with arbitrary policy

changes

• Poor infrastructure, notably rail; and major problems in electricity

provision

• Average operating environment: Difficulty in accessing loans;

very high property costs; restrictive import regulations;

cumbersome and slow clearance of goods through the ports; an

inefficient property registration system; slow and ineffective

courts and dispute resolution mechanisms

• Political risk: Ethnic and religious divide causing sporadic political

violence; uncertainty over democracy; the protectionist

tendencies of policymakers; sporadic attacks on oil facilities

0% 5% 10% 15% 20% 25% 30%

Access to financing


Corruption

Policy instability



Inflation


Crime and theft

Poor work ethic


Labour regulation

Poor public health

Tax rates

Tax regulations

Nigeria

• Population: 156.1m (1st out of 45)















Strengths

• The world’s top reformer: The operating environment is

improving rapidly, macroeconomic policy is sound and the

country welcomes foreign investment

• In spite of its small geographical size, it has a high population

• A relatively efficient government

• Very low crime, low corruption

• Good economic growth

• A strong legal system

• A liberalised labour market

Challenges

• Access to ports can be difficult even though the country is part

of the East African Community

• Poverty

• High energy costs

• The financial sector is still relatively undeveloped and accessing

finance can be particularly problematic

• While the regulatory environment has improved rapidly,

adequate physical infrastructure is still lacking

• Tax regulations and rates can still be very restrictive

• An inadequately educated workforce

0% 5% 10% 15% 20% 25% 30%

Access to financing

Tax regulations

Tax rates



Poor work ethic


Policy instability

Inflation


Poor public health

Corruption

Crime and theft

Labour regulation


Rwanda
















Strengths

• A decent size economy

• A regional hub serving as a gateway to French West Africa,

given its good airport and port infrastructure

• Strong infrastructure spending

• Low political risk — a long history of democracy although this is

under threat from President Wade’s intentions to run for an

unconstitutional third term as president

• Monetary policy stability because of its participation in the West

African franc

• Decent education and skill levels

Challenges

• Moderate rates of economic growth

• A financial system that is relatively undeveloped

• High taxes and an inefficient tax system

• Regulatory and judicial decisions are frequently inconsistent,

while bureaucracy remains burdensome

• Electricity shortages

• Labour laws make it difficult to fire workers

0% 5% 10% 15% 20% 25% 30%

Access to financing

Tax regulations

Corruption

Tax rates


Inflation

Labour regulation




Poor work ethic

Policy instability

Crime and theft

Poor public health


Senegal







• Investment attractiveness: 5.6 (1st out of 45)

• GDP (market prices): US$357.3bn (1st out of 45)

• GDP (purchasing power): US$524.0bn (1st out of 45)







Strengths

• By far the largest economy on the continent with developed

infrastructure, well developed financial services and good access

into the rest of the continent

• Diversified economy

• Good legal system

• Huge mineral and metal resources

• Massive infrastructure build

Challenges

• Growth rates that are well below the rest of SSA

• Socioeconomic challenges of income inequality, unemployment,

crime and poor health of the population

• Uncertainty over the policy environment

• Restrictive labour policies, high wages to productivity,

antagonistic labour-employee relationships and a skills shortage

• The threat of further electricity shortages

• A mature market with many players

0% 5% 10% 15% 20% 25% 30%



Crime and theft

Labour regulation

Corruption


Poor work ethic

Access to financing

Policy instability

Poor public health


Inflation

Tax rates

Tax regulations


South Africa



• Operating environment score: 6.1 (3rd out of 45)






• GDP (purchasing power): US$100bn (4th out of 45)

• GDP growth 2011 – 16: 5.6% (21st out of 45)

Note: There was no survey available on the operating environment for Sudan

Strengths

• Fourth largest economy in SSA, sixth largest population

• Oil wealth

• Scope for an improved political outlook and relations with the

international community after the secession of the South

• Huge inward capital flows from China and Middle Eastern

countries

• Regional concentration of wealth, particularly in Khartoum

• An untapped market

• Privatisation initiatives

Challenges

• Extremely high political risk, notably the threat of civil war

• US sanctions result in many banks not being willing to transact

with the country

• Limitations on what can be exported/imported between the US

and Sudan

• Goods containing US parts may not be sold in Sudan

• Dependence on and uncertainty over the access to oil wealth

• Weak operating environment: Extremely high levels of

corruption and bureaucracy; a judicial system that is subservient

to the government; absence of the rule of law, very poor

infrastructure

• Massive socioeconomic problems: Unemployment; displaced

people; poverty, illiteracy

Sudan (pre-secession of the South)
















Strengths

• Large population and economic size

• One of the fastest growing economies in the world

• Abundant natural resources, particularly for agriculture, energy

and mining. Investors can import capital goods at zero duty

• Infrastructure spending is good, especially in the tourism and the

telecommunications and information technology sector

• Low political risk environment

Challenges

• Poor infrastructure — underdeveloped transport system,

unreliable power sector

• Average operating environment: Bureaucratic red tape and

widespread corruption; the enforcement of laws, regulations

and penalties to combat corruption has largely been ineffective

• Limited availability of skilled labour: Tertiary education is very

limited; labour and immigration regulations permit foreign

investors to recruit up to five expatriates

• Foreign access to land can be complex and bureaucratic, with

periodic and confusing export bans on agricultural goods

0% 5% 10% 15% 20% 25% 30%

Corruption

Access to financing


Tax rates

Tax regulations

Crime and theft


Inflation

Poor work ethic


Labour regulation


Poor public health

Policy instability


Tanzania
















Strengths

• A decent size economy with good growth rates

• High population growth

• Oil production from 2015

• Good macroeconomic management

• Relatively low levels of government regulation and an efficient

labour market

Challenges

• High corruption

• Poor infrastructure, notably rail and electricity

• High wages relative to productivity

• Dependent on foreign aid

• Difficulty in accessing financing

• A lack of policy consistency towards foreign investment

0% 5% 10% 15% 20% 25% 30%

Corruption

Access to financing


Tax rates

Poor work ethic


Inflation


Tax regulations

Crime and theft

Poor public health

Policy instability


Labour regulation


Uganda


• GDP/capita (market prices): US$501 (32nd out of 45)














Strengths

• Rapid economic growth

• A decent sized economy

• A relatively developed financial system

• Relatively good political risk profile

• A relatively good operating environment: Moderate levels of

corruption; high levels of economic freedom; relatively reliable

electricity supply; low tax rates; ranked by the World Bank as

one of the easiest countries in which to do business; top

business reformer

• High potential for resource extraction


• A freely tradable currency

Challenges

• Thinly dispersed population, high income inequality

• Poor rail and road infrastructure, and restricted access to the sea

• Poor levels of health and basic education

• A history of double-digit inflation

• Problems in enforcing contracts, crime problems, labour market

rigidity, high levels of bureaucracy

0% 5% 10% 15% 20% 25% 30%

Access to financing

Corruption


Tax rates


Inflation

Poor work ethic

Tax regulations

Crime and theft


Policy instability


Poor public health

Labour regulation


Zambia







• Investment attractiveness: 1.5 (43rd out of 45)


• GDP (purchasing power): US$5.5bn (33rd out of 45)







Strengths

• Potential for good economic growth, especially if there is a

political transition

• Huge resource potential

• High education levels

• Access to and from South Africa

• Monetary stability after the Zimbabwe dollar was removed from

circulation

Challenges

• A very poor operating environment: Lack of property rights,

indigenisation laws; high corruption; dilapidated infrastructure;

policies hostile to business; policy instability; shortage of

electricity; high wage costs

• High political risk, thus no international financial support for the

government

• High country debt

0% 5% 10% 15% 20% 25% 30%

Access to financing

Policy instability




Corruption

Labour regulation

Crime and theft

Poor public health

Tax rates

Tax regulations

Poor work ethic



Inflation

Zimbabwe

• Population: 12.6m (21st out of 45)





Table A1: Economic size and the composition of GDP (2010)

Note:

The ranking is according to size of GDP (US$bn)

Source: IMF, World Development Indicators


Market

size Composition of economic production (% of GDP) Composition of economic expenditure (% of GDP)

US$bn

PPP Agriculture Industry Manufacturing Services

Household

consumption

Government

consumption Investment Exports Imports

1 South Africa 524.0 3 31 15 66 60 21 21.7 27 28

2 Nigeria 377.9 33 41 - 27 - - 24.7 36 27

3 Angola 107.3 10 59 6 31 - - 10.4 52 46

4 Sudan 100.0 30 26 7 44 67 14 20.9 15 21

5 Ethiopia 86.1 51 11 4 39 88 8 22.3 11 29

6 Kenya 66.0 23 15 9 62 76 16 22.6 25 38

7 Ghana 62.0 32 19 7 49 82 10 21.8 31 41

8 Tanzania 58.4 29 24 10 47 62 20 28.8 23 35

9 Cameroon 44.3 19 31 17 50 72 9 16.4 27 31

10 Uganda 42.2 25 26 8 50 76 11 24.3 23 35

11 Côte d'Ivoire 37.0 24 25 18 50 72 9 9.6 42 34

12 Botswana 28.5 3 40 4 57 63 24 27.4 34 45

13 Senegal 23.9 17 22 13 62 83 9 29.8 24 44

14 Equatorial Guinea 23.8 - - - - - - 48.3 - -

15 DRC 23.1 - - - - - - 27.0 - -

16 Gabon 22.5 5 54 4 41 41 12 25.7 52 33

17 Mozambique 21.8 31 24 14 45 84 13 21.9 25 44

18 Zambia 20.0 22 34 10 44 61 13 23.8 36 32

19 Burkina Faso 20.0 - - - - - - 20.3 - -

20 Madagascar 19.4 29 16 14 55 80 11 25.8 28 52

21 Mauritius 18.1 4 29 19 67 75 15 25.1 48 59

22 Chad 17.4 14 49 7 38 79 16 39.7 42 70

23 Congo 17.1 - - - - - - 20.8 - -

24 Mali 16.8 37 24 3 0 77 10 19.2 26 36

25 Namibia 14.6 9 33 15 58 62 24 27.6 47 60

26 Benin 14.0 - - - - - - 18.7 14 28

27 Malawi 13.0 31 16 10 53 62 21 30.1 30 38

28 Rwanda 12.2 34 15 6 51 81 15 23.4 12 29

29 Niger 11.1 - - - - - - 47.0 - -

30 Guinea 10.8 17 53 5 30 75 8 10.5 41 45

31 Swaziland 6.1 7 49 44 43 73 27 12.5 60 76

32 Togo 6.0 - - - - - 9 16.9 42 62

33 Zimbabwe 5.5 18 29 17 53 113 14 - 36 65

34 Sierra Leone 4.7 51 22 - 27 84 14 18.3 16 29

35 Eritrea 3.6 14 22 6 63 86 31 9.3 4 20

36 Gambia 3.5 17.4

37 CAR 3.4 56 15 - 30 93 4 13.9 14 22

38 Burundi 3.4 - - - - - - 20.6 - -

39 Lesotho 3.3 8 34 17 58 79 50 37.5 51 112

40 Seychelles 2.1 - - - - - - 54.0 - -

41 Cape Verde 1.9 - - - - - - 47.1 - -

42 Guinea-Bissau 1.8 55 13 10 32 83 14 9.8 26 47

43 Liberia 1.7 61 17 13 22 202 19 - 31 173

44 Comoros 0.8 - - - - - - 16.5 - -

45 Sao Tome and Principe 0.3 - - - - - - 39.2 - -


Table A2: Long-term real GDP forecasts according to different sources (2011 – 2016 average)

Note: The ranking is according to size of GDP (US$bn) Source: IMF, BMI, IHS Global Insight, RMB FICC Research Data as at August 2011

IMF IHS Global Insight BMI Average growth Standard deviation

South Africa 4.1 4.1 4.0 4.1 0.1

Nigeria 6.4 5.8 7.6 6.6 0.9

Angola 7.5 6.4 8.5 7.5 1.0

Sudan 5.6 4.8 2.0 4.1 1.9

Ethiopia 8.1 9.0 6.8 7.9 1.1

Kenya 6.5 5.6 5.5 5.9 0.6

Ghana 7.9 10.4 10.1 9.5 1.3

Tanzania 7.1 6.7 6.3 6.7 0.4

Cameroon 4.4 4.0 4.1 4.2 0.2

Uganda 6.7 6.9 8.7 7.4 1.1

Côte d'Ivoire 6.1 3.9 2.2 4.1 1.9

Botswana 6.1 4.0 4.8 5.0 1.0

Senegal 3.7 0.6 4.3 2.9 0.3

Equatorial Guinea 5.0 4.5 4.3 4.6 1.9

DRC 6.5 6.4 7.1 6.6 0.4

Gabon 3.1 3.5 4.3 3.6 0.6

Mozambique 7.8 6.5 6.6 7.0 0.7

Zambia 7.6 6.7 6.5 6.9 0.6

Burkina Faso 6.1 5.0 5.7 5.6 0.5

Madagascar 4.1 4.2 3.1 3.8 0.6

Mauritius 4.3 4.3 5.2 4.6 0.5

Chad 4.0 2.3 4.5 3.6 1.2

Congo 6.5 5.1 2.9 4.8 1.8

Mali 5.2 5.0 5.1 5.1 0.1

Namibia 4.5 3.7 5.2 4.5 0.7

Benin 4.5 4.3 3.8 4.2 0.4

Malawi 5.5 6.7 6.2 6.1 0.6

Rwanda 6.7 5.4 7.1 6.4 0.9

Niger 7.3 5.3 5.2 5.9 1.2

Guinea 4.7 3.8 4.2 4.2 0.4

Swaziland 1.9 2.7 2.5 2.4 0.4

Togo 3.9 3.7 3.5 3.7 0.2

Zimbabwe 5.6 5.1 7.1 5.9 1.1

Sierra Leone 5.7 5.6 5.9 5.7 0.1

Eritrea 4.5 2.8 - 3.6 2.3

Gambia 5.5 5.4 5.5 5.5 0.1

CAR 5.2 4.5 3.1 4.3 1.0

Burundi 4.9 4.9 3.7 4.5 0.7

Lesotho 4.3 4.2 4.9 4.5 0.4

Seychelles 4.7 4.9 5.1 4.9 0.2

Cape Verde 6.9 5.5 6.0 6.1 0.7

Guinea-Bissau 4.6 2.4 4.0 3.7 1.1

Liberia 7.7 6.8 - 7.3 4.2

Comoros 3.6 2.9 - 3.2 1.9

Sao Tome and Principe 11.9 11.3 3.7 8.9 4.6


Table A3: Indicators of growth risks (2010)

Note: The ranking is according to size of GDP (US$bn) 1. Composition of exports data is for 2008 2. Where 1 is least diversified and 0 is most diversified 3. Economic volatility is for the period 1990 – 2011, based on IMF figures Source: World Bank, IMF, UNCTAD, AfDB Data as at August 2011

Composition of exports1 (% of total) Export

diversification

index2

Investment-to-

GDP ratio

Economic

volatility3 Food and agriculture Fuels Mining Manufactures

South Africa 12 11 29 47 27 0.59 21.7 2.3

Nigeria 6 90 - 4 36 0.83 24.7 5.1

Angola - - - - 52 0.84 10.4 10.8

Sudan 7 92 - - 15 0.69 20.9 3.7

Ethiopia 89 0 1 9 11 0.79 22.3 6.6

Kenya 57 4 3 37 25 0.70 22.6 2.3

Ghana 72 2 6 19 23 0.86 21.8 2.1

Tanzania 45 1 25 25 23 0.73 28.8 2.3

Cameroon - - - - 27 0.77 16.4 3.4

Uganda 69 1 2 27 23 0.72 24.3 2.4

Côte d'Ivoire 54 30 0 15 42 0.71 9.6 4.3

Botswana - - 16 78 34 0.88 27.4 3.7

Senegal 31 24 3 41 24 0.65 29.8 2.1

Equatorial Guinea - - - - - 0.73 48.3 33.4

DRC - - - - - 0.83 27.0 4.3

Gabon - - - - 25 0.80 25.7 3.6

Mozambique 26 17 4 12 25 0.82 21.9 4.3

Zambia 9 1 81 8 36 0.84 23.8 4.7

Burkina Faso 87 - 1 12 - 0.71 20.3 2.8

Madagascar 34 5 3 57 28 0.78 25.8 4.9

Mauritius - - - - 48 0.72 25.1 2.6

Chad - - - - 42 - 39.7 7.8

Congo - - - - - 0.77 20.8 3.8

Mali 70 6 1 22 26 0.85 19.2 3.4

Namibia - - 31 45 47 0.81 27.6 3.1

Benin - - - - 14 0.73 18.7 1.6

Malawi 91 - 1 9 30 0.83 30.1 5.7

Rwanda 44 - 32 19 12 0.83 23.4 12.5

Niger 22 2 69 7 - 0.77 47.0 5.0

Guinea - - - - 41 0.72 10.5 1.5

Swaziland 28 1 1 70 60 0.78 12.5 1.8

Togo 25 - 13 62 42 0.73 16.9 5.6

Zimbabwe 42 1 22 34 36 0.78 - 9.1

Sierra Leone - - - - 16 - 18.3 11.3

Eritrea - - - - 4 0.62 9.3 7.5

Gambia - - - - - 0.59 17.4 3.0

CAR - - - - 14 0.70 13.9 3.9

Burundi 72 2 5 21 - 0.66 20.6 4.3

Lesotho - - - - - - 37.5 1.8

Seychelles - - - - - 0.72 54.0 4.7

Cape Verde - - - - - 0.68 47.1 2.6

Guinea-Bissau - - - - - 0.62 9.8 6.9

Liberia - - - - - 0.73 - 11.3

Comoros - - - - - - 16.5 3.1

Sao Tome and Principe - - - - - 0.61 39.2 3.0

Exports to GDP

(%)


Table A4: General indices specifying the economic/business operating environment

Note:

The ranking is according to size of GDP (US$bn) 1. We aggregated four key studies, specifically: The World Bank’s Ease of Doing Business Index, the World Economic Forum’s Global Competitiveness Index, the Heritage Foundation’s Index of Economic Freedom and Transparency International’s Corruption Perceptions Index Source: RMB FICC Research, World Bank, World Economic Forum, Heritage Foundation, Transparency International


Composite operating

environment index1

Ease of Doing Business

Index

Global

Competitiveness Index

Index of Economic

Freedom

Corruption

Perceptions Index

The higher the better 1 = best; 183 = worst 1 = poor; 7 = good 0 = poor; 100 = good 0 = high; 10 = low

South Africa 6.2 34 4.3 62.8 4.5

Nigeria 3.2 137 3.4 56.8 2.4

Angola 1.9 163 2.9 48.4 1.8

Sudan 1.9 154 - - 1.4

Ethiopia 3.5 104 3.5 51.2 2.7

Kenya 3.7 98 3.6 57.5 2.0

Ghana 4.9 67 3.6 60.2 4.1

Tanzania 3.6 128 3.6 58.3 2.7

Cameroon 2.8 168 3.6 52.3 2.2

Uganda 3.8 122 3.5 62.2 2.5

Côte d'Ivoire 4.1 169 3.3 54.1 2.2

Botswana 6.6 52 4.1 70.3 5.8

Senegal 3.4 152 3.7 54.6 2.9

Equatorial Guinea 2.1 164 - 48.6 1.7

DRC 1.5 175 - 41.4 1.7

Gabon 3.2 156 - 55.4 2.8

Mozambique 3.3 126 3.3 56.0 2.7

Zambia 4.2 76 3.5 58.0 3.0

Burkina Faso 3.3 151 3.2 59.4 3.1

Madagascar 3.6 140 3.5 63.2 2.6

Mauritius 7.3 20 4.3 76.3 5.4

Chad 1.4 183 2.7 47.5 1.6

Congo 1.7 177 - 43.2 1.9

Mali 3.0 153 3.3 55.6 2.7

Namibia 5.5 69 4.1 62.2 4.4

Benin 3.2 170 3.7 55.4 2.8

Malawi 3.6 133 3.4 54.1 3.4

Rwanda 5.3 58 4.0 59.1 4.0

Niger 2.8 173 - 52.9 2.6

Guinea 2.2 179 - 51.8 1.8

Swaziland 3.7 118 3.4 57.4 3.2

Togo 2.5 160 - 47.1 2.4

Zimbabwe 1.0 157 3.0 21.4 2.4

Sierra Leone 2.7 143 - 47.9 2.4

Eritrea 1.6 180 - 35.3 2.6

Gambia 3.8 146 3.9 55.1 3.2

CAR 2.1 182 - 48.4 2.1

Burundi 1.6 181 3.0 47.5 1.6

Lesotho 3.2 138 3.4 48.1 3.5

Seychelles 4.6 95 - 47.9 4.8

Cape Verde 4.6 132 3.5 61.8 5.1

Guinea-Bissau 1.8 176 - 43.6 2.0

Liberia 2.9 155 - 46.2 3.3

Comoros 2.0 159 - 44.9 1.7

Sao Tome and Principe 2.6 178 - 48.8 3.0


Table A5: Global Competitiveness indices (from 1 = poor to 7 = good)

Note:

The ranking is according to size of GDP (US$bn) Source: World Economic Forum Data as at August 2011

Infrastructure quality Financial market development

Labour

market

efficiency

Enabling

Trade

Index

Overall

score Overall Road Rail Ports Airports Electricity Overall

Availability

of financial

services

Ease of

access to

loans

Restriction on

capital flows Overall Overall

South Africa 4.3 4.0 4.8 3.3 4.7 6.1 3.8 5.3 6.2 3.2 3.9 4.1 4.0

Nigeria 3.4 2.0 2.4 1.5 3.0 3.9 1.3 4.0 4.2 2.0 4.0 4.3 3.1

Angola 2.9 1.9 2.8 1.4 2.1 3.0 1.5 2.9 3.3 2.2 1.9 4.2 -

Sudan - - - - - - - - - - - - -

Ethiopia 3.5 2.7 4.1 1.5 4.4 5.4 2.7 3.3 3.4 2.1 3.1 4.4 3.5

Kenya 3.6 3.0 3.6 2.3 3.8 5.0 3.4 4.7 5.0 3.7 4.2 4.6 3.5

Ghana 3.6 2.9 3.4 1.4 4.5 4.2 3.2 4.2 4.3 2.3 4.5 4.2 3.6

Tanzania 3.6 2.4 2.9 2.4 3.0 3.4 2.5 4.0 3.6 2.8 3.9 4.3 3.6

Cameroon 3.6 2.4 2.8 2.3 3.3 3.3 2.8 3.3 3.3 1.9 3.9 4.1 3.4

Uganda 3.5 2.4 2.7 1.2 3.5 3.9 2.8 4.1 4.3 2.3 4.8 4.8 3.7

Côte d'Ivoire 3.3 3.1 3.2 2.1 5.0 4.5 3.5 3.5 3.9 1.5 3.7 4.0 2.9

Botswana 4.1 3.5 4.6 3.5 3.8 4.0 4.1 4.5 4.5 3.5 5.2 4.5 4.2

Senegal 3.7 2.7 3.3 1.9 4.7 4.5 2.3 3.6 4.3 2.3 3.7 4.0 -

Equatorial Guinea - - - - - - - - - - - - -

DRC - - - - - - - - - - - - -

Gabon - - - - - - - - - - - - -

Mozambique 3.3 2.6 2.4 2.4 3.5 4.1 3.3 3.4 4.2 2.0 3.4 3.9 3.7

Zambia 3.5 2.6 2.8 2.0 3.6 3.6 3.3 4.5 4.7 2.3 4.6 4.0 3.8

Burkina Faso 3.2 2.1 2.6 1.8 3.9 3.0 2.2 3.1 3.1 1.6 3.2 4.2 3.4

Madagascar 3.5 2.4 2.9 1.7 3.4 3.8 2.6 2.9 3.6 2.9 3.0 4.4 3.8

Mauritius 4.3 4.2 4.1 - 4.5 5.0 5.1 4.7 5.1 3.4 5.7 4.5 -

Chad 2.7 1.8 2.4 - 2.6 2.8 1.5 2.8 2.5 2.1 3.0 4.2 2.9

Congo - - - - - - - - - - - - -

Mali 3.3 2.6 2.9 2.0 3.7 3.2 3.3 2.9 3.7 1.9 3.3 3.8 3.4

Namibia 4.1 4.3 5.8 4.1 5.6 5.1 5.7 4.7 5.2 3.1 4.0 4.5 4.0

Benin 3.7 2.7 2.9 1.9 4.0 3.9 3.3 3.8 4.3 2.9 4.0 4.2 3.5

Malawi 3.4 2.3 3.6 2.2 3.6 3.3 2.0 4.2 4.0 2.2 3.7 4.6 3.8

Rwanda 4.0 3.0 4.1 - 2.8 3.9 4.1 4.1 4.0 2.2 4.6 5.3 -

Niger - - - - - - - - - - - - -

Guinea - - - - - - - - - - - - -

Swaziland 3.4 3.3 5.1 3.7 4.2 3.2 3.8 4.0 4.1 2.8 4.0 4.2 -

Togo - - - - - - - - - - - - -

Zimbabwe 3.0 2.4 3.2 2.8 4.4 3.9 1.8 3.6 3.6 2.0 3.6 3.5 3.0

Sierra Leone - - - - - - - - - - - - -

Eritrea - - - - - - - - - - - - -

Gambia 3.9 3.8 4.3 - 5.1 4.8 4.8 4.0 4.6 2.9 4.5 4.9 3.8

CAR - - - - - - - - - - - - -

Burundi 3.0 2.2 2.7 - 3.0 3.3 2.5 2.3 2.9 1.6 2.7 4.3 2.8

Lesotho 3.4 2.6 2.9 - 3.1 2.3 3.6 3.5 3.0 2.3 3.7 4.2 3.6

Seychelles - - - - - - - - - - - - -

Cape Verde 3.5 2.8 3.9 - 3.5 4.3 1.8 3.7 3.7 2.3 4.3 3.7 -

Guinea-Bissau - - - - - - - - - - - - -

Liberia - - - - - - - - - - - - -

Comoros - - - - - - - - - - - - -

Sao Tome and Principe - - - - - - - - - - - - -


Table A6: Other operating environment indicators

Note:

The ranking is according to size of GDP (US$bn) Source: RMB FICC Research, World Bank, IFC, PWC, Knight Frank Data as at August 2011

Electricity

outages

Logistic

Performance

Index

Average

customs duty

Total effec-

tive tax rate

Property

rental costs:

Office

Property

rental costs:

Retail

Property

rental costs:

Industrial

Property rental

costs:

Residential

Hours/

month

1 = poor;

5 = good (%) (%)

US$/sq m/

month

US$/sq m/

month

US$/sq m/

month US$/month

South Africa 9 3.5 6 31 21.0 40.0 7.0 5,500

Nigeria 216 2.6 8 32 70.0 45.0 8.0 11,500

Angola 158 2.3 10 53 150.0 100.0 16.0 20,000

Sudan - 2.2 11 36 30.0 35.0 10.0 4,000

Ethiopia 19 2.4 13 31 - - - -

Kenya 31 2.6 7 50 10.0 31.0 3.6 4,000

Ghana 121 2.5 9 33 30.0 40.0 4.0 4,000

Tanzania 95 2.6 10 45 20.0 16.0 5.0 7,000

Cameroon 32 2.6 14 49 18.0 15.0 2.0 2,500

Uganda 111 2.8 8 36 17.0 28.0 6.5 4,500

Côte d'Ivoire 17 2.5 10 44 19.0 23.0 4.0 3,500

Botswana 4 2.3 10 20 16.5 30.0 5.0 2,000

Senegal 73 2.9 10 46 18.0 20.0 4.0 3,000

Equatorial Guinea - - - 60 30.0 18.0 6.0 4,000

DRC 160 2.7 11 340 45.0 35.0 8.0 8,000

Gabon 39 2.4 14 44 - - - -

Mozambique 13 2.3 8 34 28.0 30.0 2.5 3,000

Zambia 11 2.3 4 16 20.0 35.0 5.0 3,000

Burkina Faso 36 2.2 7 45 - - - -

Madagascar 31 2.7 10 38 16.0 40.0 5.0 3,000

Mauritius 10 2.7 3 24 26.0 43.0 6.6 3,300

Chad 199 2.5 13 65 30.0 35.0 6.0 4,500

Congo 870 2.5 14 66 - - - -

Mali 16 2.3 9 52 14.0 10.0 2.0 3,000

Namibia 4 2.0 1 10 16.0 35.0 6.0 2,500

Benin 36 2.8 18 66 - - - -

Malawi 4 - 6 25 10.5 17.5 5.0 1,500

Rwanda 60 2.0 14 31 15.0 25.0 1.5 2,500

Niger 32 2.5 8 47 - - - -

Guinea 230 2.6 11 55 - - - -

Swaziland 5 - 7 37 - - - -

Togo 63 2.6 16 51 30.0 35.0 8.0 4,000

Sierra Leone 162 2.0 - 236 20.0 10.0 2.0 4,000

Zimbabwe - - 15 40 10.0 15.0 3.0 2,000

Eritrea 8 1.7 7 85 - - - -

Gambia 162 2.5 17 292 - - - -

CAR - - 13 204 15.0 15.0 1.0 3,500

Burundi 123 - 11 153 - - - -

Lesotho 37 - 17 20 - - - -

Seychelles - - 6 44 - - - -

Cape Verde 45 - 12 37 - - - -

Guinea-Bissau 165 2.1 10 46 - - - -

Liberia - 2.4 - 44 - - - -

Comoros - 2.5 - 218 - - - -

Sao Tome and Principe - - - 33 - - - -

SSA average 92.1 2.5 10 68 27.6 30.4 5.3 4,567


Table A7: Political risk for trade and investment

Note:

The ranking is according to size of GDP (US$bn) Source: Financial Times and Aon Risk Solutions Data as at August 2011

Overall risk

Exchange

transfer War/civil war Strikes/riots

Sovereign non-

payment

Legal and

regulatory

Political

interference

Supply chain

vulnerability

South Africa Medium low � � �

Nigeria High � � � � �

Angola Medium high � � � � �

Sudan Very high � � � � � �

Ethiopia Medium high � � � � �

Kenya Medium high � � � � �

Ghana Medium high � � � � �

Tanzania Medium high � � � �

Cameroon Medium � � �

Uganda Medium � � � � � �

Côte d'Ivoire High � � � � � � �

Botswana Medium low

Senegal Medium high � � �

Equatorial Guinea High � � � �

DRC Very high � � � � � � �

Gabon Medium � � �

Mozambique Medium � � �

Zambia Medium � � � �

Burkina Faso Medium high � � � �

Madagascar Medium high � � � � � �

Mauritius Not rated - - - - - - -

Chad High � � � � � �

Congo High � � �

Mali Medium high �

Namibia Medium low �

Benin Medium high � � �

Malawi Medium high � � � �

Rwanda Medium high � � � �

Niger High � � � � � �

Guinea High � � � � � �

Swaziland Medium high � �

Togo Medium high � � �

Zimbabwe Very high � � � � � �

Sierra Leone Medium high � � �

Eritrea High � � � � � �

Gambia Medium high �

CAR High � � � � � �

Burundi High � � � � �

Lesotho Medium � �

Seychelles Not rated - - - - - - -

Cape Verde Not rated - - - - - - -

Guinea-Bissau High � � � � � �

Liberia High � � � � �

Comoros Not rated - - - - - - -

Sao Tome and Principe Not rated - - - - - - -


Table A8: Strength of the legal and administrative environment

Note:

The ranking is according to size of GDP (US$bn) Source: World Economic Forum Data as at August 2011

Overall ranking Judicial

independence

Strength of investor protection Property rights

Efficiency of legal framework in settling disputes

Efficiency of legal framework in challenging regulations

Protection of minority

shareholders' interests

1 = worst environment; 7 = best

environment

1 = heavily influenced; 7 = entirely independent

1 – 10 (best) scale

1 = very weak; 7 = very strong

1 = extremely inefficient; 7 = highly effective

1 = extremely inefficient; 7 = highly effective

1 = not protected at all; 7 = fully protected

South Africa 4.4 4.7 8.0 5.4 5.1 4.7 5.6

Nigeria 3.2 3.5 5.7 3.3 3.7 3.3 3.6

Angola 3.2 3.0 5.7 2.9 2.9 3.2 3.6

Sudan - - - - - - -

Ethiopia 4.0 3.3 4.3 4.5 3.7 3.5 4.9

Kenya 3.2 2.6 5.0 3.7 3.1 3.0 3.9

Ghana 3.9 3.8 6.0 4.2 4.0 3.8 4.6

Tanzania 3.7 3.5 5.0 3.7 3.7 3.5 4.0

Cameroon 3.4 2.6 4.3 3.7 3.3 3.1 4.4

Uganda 3.4 3.4 4.0 3.8 3.7 3.7 4.0

Cote d'Ivoire 3.0 1.9 3.3 3.4 3.0 2.8 3.9

Botswana 4.8 5.2 6.0 5.3 4.6 4.5 4.8

Senegal 3.8 3.1 3.0 4.7 3.6 3.3 4.5

Equatorial Guinea - - - - - - -

DRC - - - - - - -

Gabon - - - - - - -

Mozambique 3.5 2.9 6.0 3.3 3.5 3.4 3.9

Zambia 4.0 3.8 5.3 4.1 3.9 3.6 4.4

Burkina Faso 3.6 2.5 3.7 4.2 3.7 3.2 4.1

Madagascar 3.1 2.5 5.7 3.0 2.8 3.0 3.5

Mauritius 4.6 4.8 7.7 5.3 4.7 4.4 5.2

Chad 2.9 2.7 4.0 2.4 2.9 3.0 3.7

Congo - - - - - - -

Mali - - - - - - -

Namibia 4.8 5.5 5.3 5.6 4.9 4.9 5.2

Benin 3.6 3.3 3.3 4.7 3.7 3.4 4.3

Malawi 4.3 4.6 5.3 4.2 3.9 3.9 4.4

Rwanda 5.3 5.1 6.3 5.0 4.5 4.2 4.7

Niger - - - - - - -

Guinea - - - - - - -

Swaziland 3.9 3.6 2.0 4.9 4 3.8 4.3

Togo - - - - - - -

Zimbabwe 3.4 2.3 4.3 2.2 3.4 2.4 4.6

Sierra Leone - - - - - - -

Eritrea - - - - - - -

Gambia 4.8 4.6 2.7 5.1 4.9 4.2 5.1

CAR - - - - - - -

Burundi 2.8 1.9 3.3 3.0 2.9 2.6 3.3

Lesotho 3.5 3.2 3.7 3.7 3.0 2.7 3.6

Seychelles - - - - - - -

Cape Verde 4.1 4.1 4.0 3.7 3.4 3.2 4.1

Guinea-Bissau - - - - - - -

Liberia - - - - - - -

Comoros - - - - - - -

Sao Tome and Principe - - - - - - -


Table A9: Sovereign long-term foreign currency ratings

Note: The ranking is according to size of GDP (US$bn) P = Positive outlook N = Negative outlook Source: Fitch Ratings, Moody’s, Standard and Poor’s Data as at August 2011

Fitch Moody's Standard and Poor's

South Africa BBB+ (N) A3 BBB+

Nigeria BB- (N) - B+

Angola BB- Ba3 BB-

Sudan - - -

Ethiopia - - -

Kenya B+ - B+

Ghana B+ (N) - B

Tanzania - - -

Cameroon B - B

Uganda B - B+

Côte d'Ivoire - - -

Botswana - A2 A-

Senegal - - B+ (N)

Equatorial Guinea - -

DRC - - -

Gabon BB- - BB-

Mozambique B - B+

Zambia B+ - B+

Burkina Faso - - B+

Madagascar - - -

Mauritius - Baa2 -

Chad - - -

Congo - - -

Mali B- - -

Namibia BBB- - -

Benin B - B

Malawi B- - -

Rwanda B- (P) - -

Niger - - -

Guinea - - -

Swaziland - - -

Togo - - -

Zimbabwe - - -

Sierra Leone - - -

Eritrea - - -

Gambia - - -

CAR - - -

Burundi - - -

Lesotho BB- (N) - -

Seychelles - - -

Cape Verde B+ - B+ (N)

Guinea-Bissau - - -

Liberia - - -

Comoros - - -

Sao Tome and Principe - - -


Table A10: Financial market development

Note: The ranking is according to size of GDP (US$bn) Source: World Economic Forum Data as at August 2011

Financial market

development

Availability of financial

services

Affordability of financial

services

Financing through local

equity market

Ease of access to

loans

1= best;

139 = worst

1 = not at all;

7 = wide variety

1 = not at all;

7 = extremely well

1 = very difficult;

7 = very easy

1 = very difficult;

7 = very easy

South Africa 9 6.2 4.7 4.7 3.2

Nigeria 84 4.2 3.9 4.0 2.0

Angola 134 3.3 2.9 1.5 2.2

Sudan - - - - -

Ethiopia 121 3.4 3.3 2.8 2.1

Kenya 27 5.0 4.3 4.4 3.7

Ghana 60 4.3 3.9 4 2.3

Tanzania 90 3.6 3.4 3.4 2.8

Cameroon 123 3.3 3.1 3.1 1.9

Uganda 72 4.3 3.8 3.4 2.3

Côte d'Ivoire 112 3.9 3.6 4.1 1.5

Botswana 47 4.5 3.9 3.6 3.5

Senegal 107 4.3 4.0 3.3 2.3

Equatorial Guinea - - - - -

DRC - - - - -

Gabon - - - - -

Mozambique 116 4.2 3.8 3.0 2.0

Zambia 49 4.7 4.1 3.8 2.3

Burkina Faso 128 3.1 2.7 3.1 1.6

Madagascar 131 3.6 2.9 1.8 2.9

Mauritius 29 5.1 4.8 3.8 3.4

Congo - - - - -

Chad 137 2.5 2.8 2.4 2.1

Mali 133 3.7 3.2 2.5 1.9

Namibia 24 5.2 4.0 3.8 3.1

Benin 95 4.3 4.1 3.7 2.9

Malawi 64 4.0 3.5 3.9 2.2

Rwanda 69 4.0 4.0 3.1 2.2

Niger - - - - -

Guinea - - - - -

Swaziland 80 4.1 3.6 3.2 2.8

Togo - - - - -

Zimbabwe 105 3.6 3.7 3.9 2.0

Sierra Leone - - - - -

Eritrea - - - - -

Gambia 76 4.6 4.4 3.1 2.9

CAR - - - - -

Burundi 139 2.9 2.8 1.5 1.6

Lesotho 114 3.0 3.1 2.1 2.3

Seychelles - - - - -

Cape Verde 104 3.7 3.7 3.8 2.3

Guinea-Bissau - - - - -

Liberia - - - - -

Comoros - - - - -

Sao Tome and Principe - - - - -


Table A11: Financial market development (continued)

Note: The ranking is according to size of GDP (US$bn) Source: World Economic Forum Data as at August 2011

Venture capital

availability

Restriction on capital

flows Soundness of banks

Regulation of securities

exchange

1 = very difficult;

7 = very easy

1 = highly restrictive;

7 = not restrictive

1 = insolvent;

7 = healthy with good

balance sheet

1 = ineffective;

7 = effective

South Africa 3.0 3.9 6.5 6.0

Nigeria 2.0 4.0 4.1 4.0

Angola 1.8 1.9 4.6 2.5

Sudan - - - -

Ethiopia 2.1 3.1 4.7 3.1

Kenya 3.1 4.2 5.1 3.7

Ghana 2.1 4.5 5.3 4.5

Tanzania 2.6 3.9 4.3 3.8

Cameroon 1.8 3.9 4.9 3.2

Uganda 1.9 4.8 5.2 3.9

Côte d'Ivoire 1.6 3.7 4.7 4.3

Botswana 2.9 5.2 5.6 4.4

Senegal 2.3 3.7 5.4 3.6

Equatorial Guinea - - - -

DRC - - - -

Gabon - - - -

Mozambique 2.1 3.4 5.2 3.7

Zambia 2.0 4.6 5.3 4.4

Burkina Faso 1.5 3.2 4.8 3.4

Madagascar 2.5 3.0 4.8 2.2

Mauritius 2.8 5.7 6.1 5.7

Chad 2.3 3.0 3.6 2.5

Congo - - - -

Mali 1.7 3.3 3.9 2.6

Namibia 2.6 4.0 6.2 5.0

Benin 2.6 4.0 5.1 4.3

Malawi 1.8 3.7 5.7 4.2

Rwanda 2.5 4.6 4.7 4.2

Niger - - - -

Guinea - - - -

Swaziland 2.3 4.0 5.5 3.9

Togo - - - -

Zimbabwe 1.7 3.6 3.4 3.9

Sierra Leone - - - -

Eritrea - - - -

Gambia 2.5 4.5 5.1 4.0

CAR - - - -

Burundi 1.5 2.7 3.5 1.9

Lesotho 2.1 3.7 4.5 2.9

Seychelles - - - -

Cape Verde 2.1 4.3 5.4 4.5

Guinea-Bissau - - - -

Liberia - - - -

Comoros - - - -

Sao Tome and Principe - - - -


Table A12: Ease of getting credit

Note: The ranking is according to size of GDP (US$bn) Source: World Bank Data as at August 2011

Getting credit

Strength of Legal

Rights Index

Depth of Credit

Information Index

Public registry

coverage

Private bureau

coverage

1 = easiest to get;

183 = most

difficult to get 0 – 10 (best) 0 – 6 (best) % of adults % of adults

South Africa 2 9 6 0 55

Nigeria 89 8 0 0 0

Angola 116 4 3 2 0

Sudan 138 5 0 0 0

Ethiopia 128 4 2 0 0

Kenya 6 10 4 0 3

Ghana 46 8 3 0 10

Tanzania 89 8 0 0 0

Cameroon 138 3 2 3 0

Uganda 46 7 4 0 1

Côte d'Ivoire 152 3 1 0 0

Botswana 46 7 4 0 58

Senegal 152 3 1 0 0

Equatorial Guinea 138 3 2 3 0

DRC 168 3 0 0 0

Gabon 138 3 2 23 0

Mozambique 128 2 4 2 0

Zambia 6 9 5 0 3

Burkina Faso 152 3 1 0 0

Madagascar 176 2 0 0 0

Mauritius 89 5 3 50 0

Chad 152 3 1 1 0

Congo 138 3 2 3 0

Mali 152 3 1 0 0

Namibia 15 8 5 0 59

Benin 152 3 1 10 0

Malawi 116 7 0 0 0

Rwanda 32 8 4 1 0

Niger 152 3 1 0 0

Guinea 168 3 0 0 0

Swaziland 46 6 5 0 36

Togo 152 3 1 0 0

Zimbabwe 128 6 0 0 0

Sierra Leone 128 6 0 0 0

Eritrea 176 2 0 0 0

Gambia 138 5 0 0 0

CAR 138 3 2 2 0

Burundi 168 2 1 0 0

Lesotho 128 6 0 0 0

Seychelles 152 4 0 0 0

Cape Verde 152 2 2 22 0

Guinea-Bissau 152 3 1 0 0

Liberia 138 4 1 0 0

Comoros 168 3 0 0 0

Sao Tome and Principe 176 2 0 0 0


Table A13: Stock exchanges (end-2010)

Note: The ranking is according to size of GDP (US$bn) 1 Data as at 2007 Source: Respective stock exchange websites, Bloomberg, Reuters, RMB Morgan Stanley Data as at August 2011

Stock exchange

Number of listed

companies

Market capitalisation

(US$m) Turnover ratio Web address

South Africa � 400 957,000 39.6 www.jse.co.za

Nigeria � 217 53,610 12.5 www.nigerianstockexchange.com

Angola � - - -

Sudan � n/a n/a n/a www.kse.com.sd

Ethiopia � - - -

Kenya � 56 14,461 8.6 www.nse.co.ke

Ghana � 30 5,214 3.4 www.gse.com.gh

Tanzania � 12 3,298 - www.dse.co.tz

Cameroon � 2 - - www.douala-stock-exchange.com

Uganda � 7 627 - www.use.or.ug

Côte d'Ivoire � 38 7,122 2.0 www.brvm.org

Botswana � 22 3,902 3.5 www.bse.co.bw

Senegal � 38 7,122 -

Equatorial Guinea � n/a n/a n/a

DRC � - - -

Gabon � n/a n/a n/a

Mozambique � 1 - www.bvm.co.mz

Zambia � 21 5,9351 4.1 www.luse.co.zm

Burkina Faso � 38 7,122 - www.brvm.org

Madagascar � - - -

Mauritius � 87 5,718 6.4 www.stockexchangeofmauritius.com

Chad � n/a n/a n/a

Congo � n/a n/a n/a

Mali � 38 7,122 - www.brvm.org

Namibia � 33 700 1.8 www.nsx.com.na/about.php

Benin � 38 7,122 - www.brvm.org

Malawi � 14 1,360 1.5 www.mse.co.mw

Rwanda � 1 -

Niger � 38 7,122 - www.brvm.org

Guinea � - - -

Swaziland � 5 233 - www.ssx.org.sz

Togo � 38 7,122 - www.brvm.org

Zimbabwe � 86 4,2401 5.1 www.zse.co.zw

Sierra Leone � - - -

Eritrea � - - -

Gambia � - - -

CAR � n/a n/a n/a

Burundi � - - -

Lesotho � - - -

Seychelles � - - -

Cape Verde � 4 - - www.bvc.cv

Guinea-Bissau � 38 7,122 - www.brvm.org

Liberia � - - -

Comoros � - - -

Sao Tome and Principe � - - -


Table A14: Corporate bonds

Note: The ranking is according to size of GDP (US$bn) 1 These countries are part of the Bourse Regionale des Valuers Mobilieres (BRVM) ,

which lists 27 corporate bonds. It does not mean that each country has issued 27 corporate bonds

Source: Respective stock exchange websites, Bloomberg, Reuters, RMB Morgan Stanley Data as at August 2011

Corporate bonds Issued (est.)

South Africa � 240

Nigeria � 4

Angola � -

Sudan - -

Ethiopia - -

Kenya � 5

Ghana � 1

Tanzania � 6

Cameroon - -

Uganda � -

Côte d'Ivoire1 � 27

Botswana � 27

Senegal1 � 27

Equatorial Guinea - -

DRC - -

Gabon � -

Mozambique � 5

Zambia � 7

Burkina Faso1 � 27

Madagascar - -

Mauritius � 25

Chad - -

Congo � -

Mali1 � 27

Namibia � 16

Benin1 � 27

Malawi � -

Rwanda � -

Niger1 � 27

Guinea - -

Swaziland � -

Togo1 � 27

Zimbabwe � -

Sierra Leone - -

Eritrea - -

Gambia - -

CAR - -

Burundi - -

Lesotho - -

Seychelles �

Cape Verde - -

Guinea-Bissau1 � 27

Liberia - -

Comoros - -

Sao Tome and Principe � -


Table A15: Production of major resources (2008)

Note: The ranking is according to size of GDP (US$bn) Source: US Geological Survey Data as at August 2011

Bauxite Cobalt Copper Gold Iron ore Lead Zinc Cement Diamonds Graphite Oil Uranium

‘000 metric

tonnes

metric

tonnes

‘000 metric

tonnes kilograms

‘000 metric

tonnes

metric

tonnes

metric

tonnes

‘000 metric

tonnes

‘000

carats

metric

tons

‘000

barrels

metric

tonnes

South Africa 400 109 212,744 48,983 46,440 29,002 13,323 12,901 - 1,976 654

Nigeria -- - - 200 62 57,960 - 5,000 - - 768,800 -

Angola - - - - - - - 1,780 8,907 - 684,375 -

Sudan - - - 2,276 - - - 330 - - 168,898 -

Ethiopia - - - 3,465 - - - 1,834 - - - -

Kenya - - - 340 - - - 3,135 - - - -

Ghana 738 - - 80,503 - - - 1,800 643 - - -

Tanzania 5 - 3 36,000 - - - 1,756 180 - - -

Cameroon - - - 1,800 - - - 1,000 12 - 31,000 -

Uganda - - - 20 - - - 650 - - - -

Côte d'Ivoire - - - 4,205 - - - 650 300 - 22,000 -

Botswana - - 22 3,176 - - - - 32,595 - - -

Senegal - - - 600 - - - 3,084 - - 99 -

Equatorial Guinea - - - 200 - - - - - - 120,000 -

DRC - - - 100 - - - 100 110 - 85,037 -

Gabon - - - 300 - - - 230 1 - 85,775 -

Mozambique 5 - - 298 - - - 730 - - - -

Zambia - 6,900 583 1,930 - - - 700 - - - -

Burkina Faso - - - 7,633 - - - 30 - - - -

Madagascar - - - 72 - - - 460 - 5,000 14 -

Mauritius - - - - - - - - - - - -

Chad - - - 150 - - - - - - 49,400 -

Congo - 31,000 243 3,300 - - 18,000 411 20,947 - 8,000 -

Mali - - - 41,160 - - - - - - - -

Namibia - - 7 2,126 - 14,062 38,319 - 2,435 - - 5,074

Benin - - - 20 - - - 1,500 - - - -

Malawi - - - - - - - 240 - - - -

Rwanda - - - 20 - - - 103 - - - -

Niger - - - 2,314 - - - 40 - - - 3,575

Guinea 17,200 - - 19,945 - - - 360 3,098 - - -

Swaziland - - - - - - - - - - - -

Togo - - - - - - - 800 9 - - -

Zimbabwe - 50 2 3,600 50 - - 400 797 2,000 - -

Sierra Leone 954 - - 196 - - - 254 371 - - -

Eritrea - - - 32 - - - 45 - - - -

Gambia - - - - - - - - - - - -

CAR - - - 10 - - - - 377 - - -

Burundi - - - 750 - - - - - - - -

Lesotho - - - - - - - - 450 - - -

Seychelles - - - - - - - - - - - -

Cape Verde - - - - - - - 160 - - - -

Guinea-Bissau - - - - - - - - - - - -

Liberia - - - 624 - - - 94 61 - - -

Comoros - - - - - - - - - - - -

Sao Tome and Principe - - - - - - - - - - - -

Share of world total 9% 52% 6% 22% 3% 4% 2% 5% 55% 1% 12% 19%


Table A16: Forecast change in the volume of production (2008 – 2015)

Note: The ranking is according to size of GDP (US$bn) Source: US Geological Survey Data as at August 2011

Bauxite Copper Gold Iron ore Nickel Platinum Palladium Tin Zinc Diamonds Coal Uranium

‘000

metric

tonnes

‘000

metric

tonnes kilograms

‘000

metric

tonnes

‘000

metric

tonnes kilograms kilograms

‘000

metric

tonnes

‘000

metric

tonnes

‘000

carats

‘000

metric

tonnes

metric

tonnes

South Africa - 8 61,256 17,400 25,125 34,859 22,763 - 15 -2,401 96,787 1,746

Nigeria - - - 30 - - - 15 - - - -

Angola - - - - - - - - - 10,093 - -

Sudan - - -2,100 - - - - - - - - -

Ethiopia - - 2,235 - - - - - - - - -

Kenya - - - - - - - - - - - -

Ghana 112 - 7,697 - - - - - - 257 - -

Tanzania - - 2,600 - - - - - - 510 3,473 960

Cameroon - - - - - - - - - - - -

Uganda - - - - - - - - - - - -

Côte d'Ivoire - - 10,895 - - - - - - - - -

Botswana - 8 -1,476 - -940 - - - - -4,595 90 -

Senegal - - 4,700 7,500 - - - - - - - -

Equatorial Guinea - - - - - - - - - - - -

DRC - - - - - - - - - 40 - -

Gabon - - - 11,500 - - - - - - - -

Mozambique - - 522 - - - - - - - 16,262 -

Zambia - 217 70 - 9,000 - - - - - 80 -

Burkina Faso - - 1,767 - - - - - - - - -

Madagascar - - -2 - 60,000 - - - - - - -

Mauritius - - - - - - - - - - - -

Chad - - -100 - - - - - - - - -

Congo - 519 28,700 - - - - -2,400 - 53 4 -

Mali - - 1,840 - - - - - - - - -

Namibia - - 74 - - - - - - -35 - 12,898

Benin - - - - - - - - - - - -

Malawi - - - - - - - - - - 20 1,400

Rwanda - - - - - - - 1,500 - - - -

Niger - - -14 - - - - - - - -3 4,968

Guinea - - -1,445 - - - - - - 2 - -

Swaziland - - - - - - - - - - -25 -

Togo - - - - - - - - - 1 - -

Zimbabwe - - 16,400 - -1,354 4,358 3,614 - - 203 2,000 -

Sierra Leone 6 - 4 - - - - - - 29 - -

Eritrea - 73 -2 - - - - - - - - -

Gambia - - - - - - - - - - - -

CAR - - 6,290 - - - - - - 23 - -

Burundi - - - - - - - -1 - - - -

Lesotho - - - - - - - - - 30 - -

Seychelles - - - - - - - - - - - -

Cape Verde - - - - - - - - - - - -

Guinea-Bissau - - - - - - - - - - - -

Liberia - - 26 - - - - - - 39 - -

Comoros - - - - - - - - - - - -

Sao Tome and Principe - - - - - - - - - - - -

Total 118 825 139,937 36,430 91,831 39,217 26,377 -886 15 4,249 118,688 21,972


Table A17: Forecast increase in production between 2008 and 2015 in percent of current global production

Note:

The ranking is according to size of GDP (US$bn) Source: US Geological Survey Data as at August 2011

Copper Gold Iron ore Nickel Platinum Palladium Tin Zinc Diamonds Coal Uranium

‘000

metric

tonnes kilograms

‘000 metric

tonnes

‘000 metric

tonnes kilograms kilograms

‘000 metric

tonnes

‘000 metric

tonnes ‘000 carats

‘000 metric

tonnes

metric

tonnes

South Africa - 2.6% 0.8% 1.6% 17.4% 11.1% - 0.1% -3.1% 1.4% 4.0%

Nigeria - - - - - - - - - - -

Angola - - - - - - - - 13.1% - -

Sudan - - - - - - - - - - -

Ethiopia - - - - - - - - - - -

Kenya - - - - - - - - - - -

Ghana - 0.3% - - - - - - 0.3% - -

Tanzania - 0.1% - - - - - - 0.7% - 2.2%

Cameroon - - - - - - - - - - -

Uganda - - - - - - - - - - -

Côte d'Ivoire - 0.5% - - - - - - - - -

Botswana - - - - - - - - -6.0% - -

Senegal - 0.2% 0.3% - - - - - - - -

Equatorial Guinea - - - - - - - - - - -

DRC - - - - - - - - - - -

Gabon - - 0.5% - - - - - - - -

Mozambique - - - - - - - - - 0.2% -

Zambia 1.4% - - 0.6% - - - - - - -

Burkina Faso - - - - - - - - - - -

Madagascar - - - 3.7% - - - - - - -

Mauritius - - - - - - - - - - -

Chad - - - - - - - - - - -

Congo 3.3% 1.2% - - - - -0.7% - - - -

Mali - - - - - - - - - - -

Namibia - - - - - - - - - - 29.4%

Benin - - - - - - - - - - -

Malawi - - - - - - - - - - 3.2%

Rwanda - - - - - - 0.5% - - - -

Niger - - - - - - - - - - 11.3%

Guinea - - - - - - - - - - -

Swaziland - - - - - - - - - - -

Togo - - - - - - - - - - -

Zimbabwe - 0.7% - - 2.2% 1.8% - - 0.3% - -

Sierra Leone - - - - - - - - - - -

Eritrea 0.5% - - - - - - - - - -

Gambia - - - - - - - - - - -

CAR - 0.3% - - - - - - - - -

Burundi - - - - - - - - - - -

Lesotho - - - - - - - - - - -

Seychelles - - - - - - - - - - -

Cape Verde - - - - - - - - - - -

Guinea-Bissau - - - - - - - - - - -

Liberia - - - - - - - - - - -

Comoros - - - - - - - - - - -

Sao Tome and Principe - - - - - - - - - - -

Total 5.2% 5.9% 1.7% 5.8% 19.6% 12.8% -0.3% 0.1% 5.3% 1.7% 50.1%


Table A18: Prospective deposits, current projects, and mines

Note:


The table includes information on diamonds, gold, copper, uranium, platinum and iron

ore only.

Source: Resource Information Unit


Prospects Projects Mines

South Africa 89 72 99

Nigeria 5 1 0

Angola 15 9 9

Sudan 5 2 3

Ethiopia 13 3 1

Kenya 6 0 1

Ghana 45 14 9

Tanzania 107 14 8

Cameroon 12 2 1

Uganda 16 0 1

Côte d'Ivoire 22 3 4

Botswana 28 10 11

Senegal 14 3 2

Equatorial Guinea 0 0 0

DRC 0 0 0

Gabon 7 2 0

Mozambique 22 4 0

Zambia 33 10 10

Burkina Faso 56 4 6

Madagascar 25 1 1

Mauritius - - -

Chad 1 0 0

Congo - - -

Mali 40 5 7

Namibia 60 14 9

Benin 0 0 0

Malawi 9 1 1

Rwanda 0 0 0

Niger 19 3 3

Guinea 24 5 3

Swaziland 1 1 0

Togo 1 0 0

Zimbabwe 18 14 12

Sierra Leone 13 11 2

Eritrea 14 0 0

Gambia - - -

CAR 6 3 0

Burundi 1 0 0

Lesotho 0 4 2

Seychelles - - -

Cape Verde - - -

Guinea-Bissau - - -

Liberia 19 4 0

Comoros - - -

Sao Tome and Principe - - -


Table A19: Number of individuals in different household consumption brackets

Note:

The ranking is according to size of GDP (US$bn) Source: Canback Dangel Data as at August 2011

Household consumption (Constant 2005 US$PPP m)

< US$2,000 (‘000)

US$2,000- 5,000 (‘000)

US$5,000- 1,0000 (‘000)

US$10000- 20,000 (‘000)

> US$20,000(‘000)

South Africa 318,600 19,189 14,652 8,223 4,900.4 3,154.3

Nigeria 236,977 124,517 26,095 5,618 1,236.4 232.5

Angola 22,127 16,339 2,079 470 159.1 32.8

Sudan 81,573 31,021 10,269 1,788 400.8 64.1

Ethiopia 69,189 79,371 3,252 299 22.2 0.6

Kenya 54,412 34,432 4,729 971 316.8 56.6

Ghana 25,977 21,684 2,299 334 65.5 5.7

Tanzania 39,251 42,090 2,527 203 17.3 0.4

Cameroon 31,714 15,460 3,261 643 190.7 40.4

Uganda 36,012 30,195 2,609 509 100.6 8.7

Côte d'Ivoire 24,800 17,093 2,032 418 158.5 34.0

Botswana 10,043 855 689 302 80.2 81.1

Equatorial Guinea 1,297 517 144 27 10.7 2.3

Senegal 17,993 10,030 2,047 290 59.2 5.9

DRC 15,036 65,600 339 26 0.6 0.0

Gabon 6,357 449 696 262 74.1 24.5

Mozambique 18,219 21,986 1,066 263 66.5 8.3

Zambia 11,786 11,937 922 182 42.0 4.9

Burkina Faso 13,174 15,500 817 127 21.7 1.5

Madagascar 15,396 19,690 689 242 78.8 13.0

Mauritius 12,311 27 288 580 324.3 79.0

Chad 5,462 11,012 201 13 0.7 0.0

Congo 6,714 3,110 737 141 45.6 9.0

Mali 9,989 14,769 543 53 5.2 0.1

Namibia 9,063 1,520 412 187 72.3 90.9

Benin 9,092 8,057 670 102 18.3 1.6

Malawi 9,037 14,410 431 53 5.8 0.2

Rwanda 9,255 9,868 582 136 33.1 4.1

Niger 7,504 15,118 341 48 5.1 0.2

Guinea 7,462 9,400 491 76 13.4 0.9

Swaziland 5,311 417 493 190 53.3 32.7

Togo 4,845 5,634 348 40 4.7 0.1

Zimbabwe 3,620 12,412 143 16 1.1 0.0

Sierra Leone 3,655 5,621 216 26 3.4 0.1

Eritrea 2,281 5,204 47 3 0.1 0.0

Gambia 2,389 1,439 232 43 12.9 1.4

CAR 3,302 4,137 231 28 3.7 0.1

Burundi 3,807 8,279 98 5 0.2 0.0

Lesotho 3,825 1,606 443 86 29.9 5.4

Seychelles 1,079 4 37 29 9.8 6.7

Cape Verde 1,539 264 164 46 15.3 7.0

Guinea-Bissau 1,378 1,430 76 9 0.5 0.0

Liberia 3,088 3,768 198 24 3.5 0.1

Comoros 667 681 31 14 6.9 1.7

Sao Tome and Principe 325 126 30 5 2.8 1.4


Table A20: Drivers of consumption

Note:


1 Change between 2010 – 2020, not the annual average change

Source: IMF, World Economic Forum, RMB FICC Research


GDP per capita ($bn) Population (m)

GDP per capita

growth rate (%)

(2010 – 2016)

Population growth rate

(%)

(2010 – 2016)

Urbanisation growth rate

(%)

(2010 – 2020)1

South Africa 7,158 49.9 2.9 1.2 12.3

Nigeria 1,389 156.1 3.5 2.8 39.2

Angola 4,478 19.1 4.1 3.0 47.5

Sudan 1,705 49.9 2.9 1.2 12.3

Ethiopia 350 84.8 5.6 2.3 55.0

Kenya 809 39.7 3.5 2.9 52.4

Ghana 1,312 23.7 4.6 2.6 35.3

Tanzania 548 41.3 5.0 2.0 50.7

Cameroon 1,101 20.4 1.8 2.5 33.1

Uganda 501 34.0 3.0 3.6 64.6

Côte d'Ivoire 1,036 - - - -

Botswana 7,627 1.8 4.2 1.3 22.6

Senegal 981 13.1 2.6 2.4 35.6

Equatorial Guinea 11,033 1.3 -0.4 2.9 61.5

DRC 186 70.5 3.3 3.0 34.8

Gabon 8,724 1.5 1.7 1.5 18.7

Mozambique 458 21.6 5.6 2.0 13.5

Zambia 1,221 13.3 5.0 2.5 31.2

Burkina Faso 598 14.7 3.7 2.3 22.6

Madagascar 392 21.3 1.7 2.5 46.4

Mauritius 7593 1.3 3.7 0.6 13.5

Chad 768 10.2 1.3 2.5 60.8

Congo 2,983 - - - -

Mali 692 13.4 2.1 3.0 60.0

Namibia 5,652 2.1 3.6 0.8 31.6

Benin 689 9.6 1.7 2.8 46.5

Malawi 322 15.7 2.5 2.8 64.4

Rwanda 562 10.0 4.4 2.1 55.3

Niger 381 14.6 4.4 3.1 31.6

Guinea 448 10.3 2.2 2.5 51.5

Swaziland 3,061 1.2 2.4 -0.4 24.6

Togo 459 7.0 1.4 2.5 46.5

Zimbabwe 594 12.6 5.4 0.0 27.3

Sierra Leone 326 5.8 3.0 2.6 39.7

Eritrea 398 5.3 1.1 2.9 65.9

Gambia 617 1.5 1.7 1.5 18.7

CAR 436 4.6 2.7 2.5 29.1

Burundi 180 8.3 2.8 2.0 83.6

Lesotho 837 2.5 2.6 1.8 36.0

Seychelles 10,682 0.1 4.5 0.2 15.7

Cape Verde 3,157 0.5 3.7 2.8 34.4

Guinea-Bissau 509 1.6 2.1 2.5 48.4

Liberia 226 4.3 4.0 3.1 49.8

Comoros 802 0.7 1.5 2.1 34.8

Sao Tome and Principe 1,183 - - - -


Table A21: Indicators of the state of infrastructure and spending

Note: The ranking is according to size of GDP (US$bn) Source: IMF, World Economic Forum, RMB FICC Research Data as at August 2011

Ranking on quality of infrastructure (from 1 = poor to 7 = good) Investment spending (US$bn)

Roads Railroads Ports Air transport Electricity supply 2010 2016

South Africa 4.8 3.3 4.7 6.1 3.8 77.5 103.4

Nigeria 2.4 1.5 3.0 3.9 1.3 53.5 77.8

Angola 2.8 1.4 2.1 3.0 1.5 8.9 25.3

Sudan - - - - - - -

Ethiopia 4.1 1.5 4.4 5.4 2.7 6.6 11.8

Kenya 3.6 2.3 3.8 5.0 3.4 7.3 11.6

Ghana 3.4 1.4 4.5 4.2 3.2 6.8 11.1

Tanzania 2.9 2.4 3.0 3.4 2.5 6.5 10.7

Cameroon 2.8 2.3 3.3 3.3 2.8 3.7 6.7

Uganda 2.7 1.2 3.5 3.9 2.8 4.1 5.6

Côte d'Ivoire 3.2 2.1 5.0 4.5 3.5 - -

Botswana 4.6 3.5 3.8 4.0 4.1 3.8 4.6

Senegal 2.7 3.3 1.9 4.7 4.5 2.3 6.0

Equatorial Guinea - - - - - - -

DRC - - - - - - -

Gabon - - - - - 3.4 4.9

Mozambique 2.4 2.4 3.5 4.1 3.3 2.2 4.7

Zambia 2.8 2.0 3.6 3.6 3.3 3.9 8.0

Burkina Faso 2.6 1.8 3.9 3.0 2.2 1.8 3.2

Madagascar 2.9 1.7 3.4 3.8 2.6 2.2 3.3

Mauritius 4.1 - 4.5 5.0 5.1 2.4 4.0

Chad 2.4 - 2.6 2.8 1.5 3.1 2.3

Congo - - - - - - -

Mali 2.9 2.0 3.7 3.2 3.3 1.8 3.6

Namibia 5.8 4.1 5.6 5.1 5.7 3.3 4.6

Benin 2.9 1.9 4.0 3.9 3.3 1.2 2.2

Malawi 3.6 2.2 3.6 3.3 2.0 1.5 2.0

Rwanda 4.1 - 2.8 3.9 4.1 1.3 1.9

Niger - - - - - 2.6 2.4

Guinea - - - - - 0.5 1.5

Swaziland 5.1 3.7 4.2 3.2 3.8 0.4 0.6

Togo - - - - - 0.5 1.0

Zimbabwe 3.2 2.8 4.4 3.9 1.8 - -

Sierra Leone - - - - - 0.3 0.9

Eritrea - - - - - 0.2 0.4

Gambia 3.8 4.3 - 5.1 4.8 4.8 -

CAR - - - - - 0.3 0.6

Burundi 2.7 - 3 3.3 2.5 0.3 0.5

Lesotho 2.9 - 3.1 2.3 3.6 0.8 1.1

Seychelles - - - - - 0.5 0.2

Cape Verde 3.9 - 3.5 4.3 1.8 0.8 1.2

Guinea-Bissau - - - - - 0.1 0.1

Liberia - - - - - - -

Comoros - - - - - 0.1 0.2

Sao Tome and Principe - - - - - - -


Sources and further information

Main reference documents

Rand Merchant Bank’s annual Africa Investor Guide provides

details of macroeconomics and financial markets of seventeen

economies. To log on to the research portal, go to:

www.ficc.rmb.co.za

Rand Merchant Bank’s Managing African Currency Risk discusses

the currency regimes, risks and hedging possibilities across sub-

Saharan Africa. To log on to the research portal, go to:

www.ficc.rmb.co.za

The US Commercial Service provides detailed Country

Commercial Guides on almost all countries. These are rich in detail

for the on-the-ground environment.

http://www.buyusainfo.net/adsearch.cfm?search_type=int&loadnav=no

The World Economic Forum’s annual Global Competitiveness

Report provides cross-country rankings on over 100 economic,

regulatory and political issues. It also provides survey results on the

most problematic business-environment factors.

A component of the annual Global Competitiveness Report is the

Executive Opinion Survey which polls over 13,000 business

executives worldwide on the economic and business environment of

the countries covered.

http://www.weforum.org/issues/global-competitiveness

The World Economic Forum’s annual Africa Competitiveness

Report provides some additional information on Africa that is that

contained in the Global Competitiveness Report.

http://www.weforum.org/s?s=competitiveness

The International Monetary Fund’s World Economic Outlook

provides economic data for all economies.

http://www.imf.org/external/ns/cs.aspx?id=28

Operating environment

Business environment

The International Finance Corporation’s Enterprise Survey

provides summary statistics on the business operating environment

on issues of access to financing, regulations, electricity, taxes, crime,

transportation, land, education, corruption, and customs duties. It

also contains a database of the underlying survey data from

120,000 firms in 125 countries.

http://www.enterprisesurveys.org/

The World Bank’s Business Planet: Mapping the Business

Environment gives a graphical perspective of many key indicators

on the ease of operating. This covers Doing Business, Enterprise

Surveys, Privatisation, Private Infrastructure and Entrepreneurship.

http://rru.worldbank.org/businessplanet/default.aspx?p=8*t=37*r=0*c=0

The IFC/PWC Paying Taxes Annual Report measures tax rates and

regimes.

http://www.doingbusiness.org/reports/special-reports/paying-taxes-2011

The World Bank’s Doing Business Report provides details on the

costs, time and procedures to follow in various aspects of doing

business (starting a business, dealing with construction permits,

registering property, getting credit, protecting investors, paying

taxes, trading across borders, enforcing contracts and closing a

business).

http://www.doingbusiness.org/

The World Bank’s Getting Electricity presents findings on the

constraints entrepreneurs around the world face in getting access to

electricity and illustrates patterns in connection processes. The study

tracks all the procedures, the time, and the cost required for a

business to obtain an electricity connection for a newly constructed

building. It highlights economies where this process is efficient and

others where it could be made simpler and more efficient.

http://www.doingbusiness.org/data/exploretopics/getting-electricity

Knight Frank’s Africa report provides a brief description and

details of property rental costs for 33 African countries.

http://my.knightfrank.com/research-reports/africa-report.aspx

The World Bank’s Global Entrepreneurship Snapshots reports

on business creation globally.

http://econ.worldbank.org/

The World Bank's Enterprise Surveys provide results from many

companies around the world revealing the major challenges they

face in emerging and developing economies, ranging from

corruption to infrastructure. Data are used to create indicators that

benchmark the quality of the business and investment climate

across 125 countries.

http://www.enterprisesurveys.org/


Labour

The Conference Board’s Total Economy Database provides

labour data for 123 economies (21 in SSA).

http://www.conference-board.org/data/economydatabase/

Governance

The World Bank’s Worldwide Governance Indicators provides

indicators for 213 economies on Voice and Accountability, Political

Stability and Absence of Violence, Government Effectiveness,

Regulatory Quality, Rule of Law, and Control of Corruption.

http://info.worldbank.org/governance/wgi/index.asp

The Heritage Foundation’s Index of Economic Freedom report

scores nations on 10 broad factors of economic freedom. It provides

a two-page discussion on the operating environment for each

country. The Fraser Institute’s Economic Freedom of the World

Report and Freedom House’s Freedom in the World survey

provide similar analysis/datasets.

http://www.heritage.org/index/

http://www.freetheworld.com/release.html

http://freedomhouse.org/template.cfm?page=15

Transparency International’s Corruption Perceptions Index

ranks almost 200 countries by their perceived level of corruption as

determined by expert assessments and opinion surveys. It also has

country survey data on perceptions of corruption (Global Corruption

Barometer), the Bribe Payers Index, and the promotion of revenue

transparency, which assess information disclosures in 41 resource

rich economies.

http://www.transparency.org/policy_research/surveys_indices/cpi

The Mo Ibrahim Foundation publishes a comprehensive index

assessing the quality of governance of African countries

http://www.moibrahimfoundation.org/en

The Global Integrity Report assesses the strengths and

weaknesses of national-level anti-corruption systems.

http://report.globalintegrity.org/

The US government’s Millennium Challenge Corporation

provides country scorecards on ruling justly, investing in people, and

economic freedom for selected countries.

http://www.mcc.gov/pages/selection/scorecards

Rules and regulations

UNCTAD's Investment Policy Reviews provide an objective

evaluation of countries’ legal, regulatory and institutional

framework for FDI. This is done from the perspective of what

countries need to do to attract more FDI. This information is very

useful. Unfortunately, the reports are often outdated. The same

goes for the investment guides.

http://www.unctad.org/Templates/Startpage.asp?intItemID=2554

The World Bank’s Doing Business website provides a good cross-

country summary of labour laws and costs and details of laws and

regulations

http://www.doingbusiness.org/data/exploretopics/employing-workers

http://www.doingbusiness.org/law-library

The World Bank’s Investing Across Borders report provides

selected indicators of FDI regulations in 87 countries (21 in SSA),

including information on restrictions in different sectors. It provides

reference to FDI related laws as well as contact details of experts in

each country.

http://iab.worldbank.org/

The Property Rights Alliance publishes an International Property

Rights Index covering 120 countries.

http://www.internationalpropertyrightsindex.org/

Risk insurance

Aon provides political risk insurance and analysis.

http://www.aon.com/risk-services/political-risk.jsp

The PRS Group’s International Country Risk Guide provides

ratings for a fee on a wide range of risks to international businesses

and institutions, particularly in the political space.

http://www.prsgroup.com/

Infrastructure

The African Development Bank’s Africa Infrastructure and

Country Diagnosis website has data and analysis on the status of

the main network infrastructures, including energy, information and

communication technologies, irrigation, transport, and water and

sanitation. The analysis encompasses public expenditure trends,

future investment needs and sector performance reviews. Their

interactive mapping function is incredibly powerful — it allows for

analysis of country infrastructure needs under assumptions that the

user can set. Detailed reports are available on each sector with

analysis of selected countries.

http://www.infrastructureafrica.org/

http://www.infrastructureafrica.org/aicd/tools/maps


The Infrastructure Consortium for Africa provides details on large

infrastructural projects across the continent — mainly those

supported by donors.

http://www.icafrica.org/en/

The World Bank’s Private Participation in Infrastructure

Database provides data for 4,600 projects in 137 low- and middle-

income countries.

http://ppi.worldbank.org/

Trade

The World Economic Forum’s Enabling Trade Report ranks 125

countries on 45 issues, assessing the countries’ attributes for

enabling trade.

http://www.weforum.org/

The World Trade Organisation provides extensive details on tariffs

and trade matters globally.

http://www.wto.org/

The World Trade Organisation’s Trade Policy Reviews provide

surveillance of national trade policies.

http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm

The World Bank’s Logistics Performance Index rates 155

countries on the quality of customs, infrastructure, international

shipments, logistics competence, tracking and tracing and

timeliness.

http://web.worldbank.org/

The International Trade Centre provides detailed information for

exporters, including: trade trends, supply and demand statistics,

alternative markets, competitors and custom tariffs. Data is available

for all countries and covers 72 industries broken down into 5,300

products. The ITC’s web tools allow for extensive analysis.

http://www.intracen.org

Legal framework

The Strength of Legal Rights Index measures the degree to which

collateral and bankruptcy laws protect the rights of borrowers and

lenders and thus facilitate lending.

http://data.worldbank.org/indicator/IC.LGL.CRED.XQ

The World Economic Forum takes a look at the strength of

institutions as one of its pillars of global competitiveness. It is

determined by the legal and administrative framework within which

individuals, firms, and governments interact to generate income and

wealth in the economy.

http://www.weforum.org/issues/global-competitiveness

Sectors

Financial

The World Economic Forum’s Financial Development Report

assesses the financial markets in 57 countries. Unfortunately, it

covers very few African countries.

http://www.weforum.org/s?s=financial+development+report

Tourism

The World Economic Forum’s Travel and Tourism

Competitiveness Report ranks 139 countries on 77 issues,

assessing their actual and potential attractiveness.

http://www.weforum.org/s?s=tourism

Information technology

The World Economic Forum’s Global Information Technology

Report assesses how prepared 138 countries are to use information

communication technology effectively.

http://www.weforum.org/

Agriculture

The United Nations Food and Agricultural Organisation

provides information relating to food and agriculture for all

countries.

http://faostat.fao.org/

Resources

The Fraser Institute’s Survey of Mining Companies looks at the

best and worst countries for mining investment.

http://www.fraserinstitute.org/

The US Geological Survey provides information on the ecosystem

and environment, natural hazards, natural resources and climate

and land-use change in the world. More specifically, it provides

country-specific information on what resources and reserves are

available in each country.

http://www.usgs.gov/

The Resource Information Unit has published the Registrar of

African Mining 2011, which is a useful source for companies

working or considering investing in Africa’s resources sector. The

book provides country specific information ranging from the type of

resources available, production figures, the laws and regulations

covering mining and exploration, and the mining companies active

in the particular countries.

http://www.riu.com.au/


Manufacturing

The Africa Business Panel surveys business leaders throughout the

African community to gain a good understanding of trends and

business activity across the continent. It also has a Africa Business

Confidence Index measuring the activity in the Africa

manufacturing and non-manufacturing sectors.

http://www.africabusinesspanel.com/

Consumption

The United Nations Data Service provides good access to

population and labour force figures.

http://data.un.org/DataMartInfo.aspx

Canback Dangel provides a useful online tool for estimating the

size of income groups per country. This can be valuable in

estimating the present and forecast market size. This is a pay-for-use

site.

https://www.cgidd.com/

UN Habitat provides analysis on population trends and

urbanisation.

http://www.unhabitat.org/

General data sources and background to countries

The United Nations Data Service provides links to 33 official

sources of country data on everything from agriculture to tourism.

http://data.un.org/DataMartInfo.aspx

The World Bank’s World Development Indicators provides

statistics on 420 economic, market and industry specific indicators

for each country.

http://data.worldbank.org/indicator

Euromonitor International provides detailed market analysis on

industries, countries and consumers on a pay-per-report basis. Its

African Marketing Data and Statistics report is the most

extensive database on Africa that we have seen.

http://www.euromonitor.com/

Wikipedia’s Country International Rankings page provides a link

to many useful sources of data.

http://en.wikipedia.org/wiki/List_of_international_rankings

The US Department of State’s Background Notes provide facts

about the land, people, history, government, political conditions,

economy and foreign relations.

http://www.state.gov/r/pa/ei/bgn/

The OECD Country Reports give a good brief background to each

country.

http://www.oecd.org/publications/

The African Economic Outlook provides good background

information and data on each country

http://www.africaneconomicoutlook.org/en/countries/

McKinsey & Company’s Lions on the Move: The progress and

potential of African economies.

http://www.mckinsey.com/mgi/publications/

World Bank's Commission on Growth and Development looks

at how developing nations can achieve sustained and equitable

growth. The 2011 report identifies some of the characteristics of

high-growth economies and how other developing countries can

emulate them. The report offers a framework that should help

policy makers create a growth strategy of their own.

http://www.growthcommission.org/

Business Monitor International, the Economic Intelligence Unit and the IHS Global Insight provide regular country reviews for a fee.

http://www.businessmonitor.com/

http://www.eiu.com/

http://www.ihs.com/


Investment agencies

FDI.net offers analysis and information on all things related to FDI

in 175 countries. The site combines business and public resources

with World Bank Group analysis to provide users with a single entry

point for the full-spectrum of information needed to make a

decision about investing in a foreign country. The site offers links to

investment promotion, privatisation and public-private partnership

agencies as well as location consultants.

http://www.fdi.net/index.cfm

The Multilateral Investment Guarantee Agency promotes FDI

into developing countries by providing political risk insurance

(guarantees) to the private sector. Their World Investment and

Political Risk report offers a snapshot of political risk perceptions

of the largest multinational enterprises and perspectives of the

political risk insurance industry.

http://www.miga.org/

fDiIntelligence provides general and bespoke reports on locations,

investment incentives and sectors worldwide for a fee.

http://www.fdiintelligence.com/

IBM’s Plant Location International provides advice to companies

on their location decisions, covering all sectors and types of business

functions.

http://www-935.ibm.com/services/us/index.wss/offering/bcs/a1001639

The World Association of Investment Promotion Agencies

provides links to all country promotion agencies.

http://www2.waipa.org/cms/Waipa

TradeInvest Africa provides good information on business

opportunities as well as some general background information.

http://www.tradeinvestafrica.com/

OCO Global advises governments and companies on international

investment and trade attraction strategies for a fee.

http://www.ocoglobal.com/


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+267 395-6579/364 2883 [email protected]

Mozambique

Ebrahim Motala

+258 21 356921

[email protected]

Namibia

Michelle van Wyk

+264 61 299-2265

[email protected]

Swaziland

Khetsiwe Dlamini

+268 404 2463

[email protected]

Tanzania

Keith Blakeway

+255 768 989 049

[email protected]

Zambia

Llewellyn Foxcroft

+260 (211) 366 800

[email protected]

India

Head of FICC India

Harihar Krishnamoorthy:

+91 22 6625-8701

[email protected]

United Kingdom

Sales and Structuring

Dieter Erasmus

+44 20 7939-1738

[email protected]

Debt Capital Markets

Martin Richardson

+44 20 7939-1731

[email protected]

Business Development — Africa

Banks and DFIs

Minos Gerakaris

+27 11 282-8269

[email protected]

Structured Trade and Commodity Finance

Gregory Havermahl

+27 11 282-4847

[email protected]

Investment Banking Business Development: Africa

Ayodele Olajiga

+27 11 282-4619/+ 234 808 300 2890

[email protected]

Investment Banking — Property Finance (Africa)

Ryan Rhodes

+27 11 282-4354

[email protected]

100 RMB FICC Research

This research has been written by the financial markets research team at FirstRand Bank Limited (“the Bank”) (acting through its Rand Merchant Bank

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