25
Africa-Asia trade flows
Ecobank: The Pan-African Bank
08
11
06
04
02
1 1
0
07
18
13
16
21 19
31
30
39
40
36
33
35
34
28
17 27
29
25
24
9
5
3
20
22 26
23
32
37
41
14
38
12
Country Guide and Map Key
Ecobank Representative Office in Addis Abeba, Ethipia
Ecobank Representative Office in Luanda, Angola
Francophone 01. Benin 06. Mali
West Africa 02. Burkina Faso 07. Niger
03. Cape Verde 08. Senegal
04. Côte d'Ivoire 09. Togo
05. Guinea-Bissau
Nigeria and 10. Ghana 13. Nigeria
Rest of West 11. Guinea 14. Sierra Leone
Africa 12. Liberia 15. Gambia
Central 16. Cameroon 20. Equatorial Guinea
Africa 17. Central Africa Rep 21. Gabon
18. Chad 22. Sao Tomé
19. Republic of Congo and Principe
East Africa 23. Burundi 27. South Sudan
24. Ethiopia 28. Tanzania
25. Kenya 29. Uganda
26. Rwanda
Southern 30. Angola 33. Mozambique
Africa 31. Democ Rep Congo 34. Zambia
32. Malawi 35. Zimbabwe
Nedbank 36. Botswana 39. Namibia
Regions 37. Lesotho 40. South Africa
Malawi * 41. Swaziland
38. Mauritius Zimbabwe *
Mozambique *
* These countries have already been numbered (see above)
Ecobank and Nedbank presence in Malawi, Mozambique
and Zimbabwe
2
An unparalleled footprint in Middle Africa
Niger Chad
Nigeria Benin
Togo
Ghana
Mali
Cote
d’Ivore
Kenya
Tanzania
DR Congo
Zambia
Zimbabwe
Liberia
Sierra Leone
Gambia
Cape Verde
Guinea Bissau
Senegal
C.A.R.
Luanda,
Angola
Eq. Guinea Uganda
Rwanda
Congo
Burundi
Malawi
Burkina Faso
Guinea
Johannesburg,
South Africa
Dubai
Rep Office
Paris
Affiliate
London
Rep Office Beijing
Rep Office
Addis Ababa,
Ethiopia
South
Sudan Cameroon
Gabon
s
Mozambique
$24.2B Total assets
10.8mn Customers
3 African stock
market listings
36 African
countries
Top 3 position
In ½ of our markets
$2.3B Net
revenue
20,000+ Employees
2,690 ATMs
1,265 Branches &
Offices
Note: information is as of 31 December 2014
UEMOA
Burkina Faso 1
G. Bissau 1
Cote d’Ivoire 3
Benin 2
Mali 3
Togo 2
Niger 1
Senegal 3
Cape Verde 7
WAMZ
Ghana 1
Guinea 1
Liberia 1
Gambia 3
Sierra Leone 5
CEMAC
Chad 1
CAR 1
Sao Tome 4
Gabon 5
C. Brazza 2
G. Equatorial 5
Cameroun 5
EAC
Rwanda 4
Burundi 4
South Sudan 8
Uganda 15
Kenya 19
Tanzania 21
SADC
DRC 6
Malawi 5
Zambia 12
Zimbabwe 11
Mozambique 11
NIGERIA
Nigeria 6
Strong Market Position
UEMOA
• Assets: $6.8 Bn
• Revenue: $472 m
• Employees: 3,172 • Branches: 290
WAMZ
• Assets: $2.7 Bn
• Revenue: $382 m
• Employees: 2,840 • Branches: 151
CEMAC
• Assets: $2.3 Bn
• Revenue: $199 m
• Employees: 1,334 • Branches: 102
EAC
• Assets: $1.1 Bn
• Revenue: $85 m
• Employees: 1,320 • Branches: 98
SADC
• Assets: $0.7 Bn
• Revenue: $102 m
• Employees: 875 • Branches: 75
NIGERIA
• Assets: $9.7 Bn
• Revenue: $989 m
• Employees: 9,940 • Branches: 516
INTERNATIONAL
• Assets: $1.0 Bn
• Revenue: $28 m
• Employees: 86 • Branches: NA
Figures as at 31 December 2014
Total Equity: $2.7 Bn
Total Assets : $24.2 Bn
Customers Deposits: $17.4 Bn
Branches & Offices: 1,265
Ecobank Customers: 10.8 M
Ecobank ATMs: 2,690
4 4
• Ecobank is the leading independent Pan-African Banking Group with presence in
more countries in Africa than any other bank in the world
• Ecobank provides a full range of corporate, retail, and investment banking services
• Ecobank provides seamless and rapid payments and receipts across the broadest
network in Africa unlike any other bank in the world
• It employs more than 20,000 people across a network of 1,265 branches and offices
in 36 African countries and international offices in Paris, London, Dubai and Beijing
• Ecobank Transnational Inc. (ETI) is the parent company of the Ecobank Group
• ETI is listed on the Nigerian Stock Exchange, Ghana Stock Exchange and Bourse
Régionale des Valeurs Mobilières (« BRVM »)
• ETI is supervised by Commission Bancaire of the UEMOA (Côte d’Ivoire)
Ecobank: Who We Are …
5 5
May 2000 March 2013
Real Progress…According to The Economist
6
Africa Rising” narrative is out of date… Africa is no longer “rising” but it is changing
Africa is Changing
7
• So what is going to change?
• Countries that didn’t build up fiscal or FX reserves, such as Angola and Nigeria, will continue to
be seen as too risky by most foreign investors
• But most African economies are not experiencing large capital outflows because they are not
dependent on global capital markets – they rely more on donors and private transfers
Public Debt Structure (2014, % of total)
Source: World Bank
8
Compound Annual Growth Rate (%)
1/6: Africa is One of the Fastest Growing Regions
• Since the beginning of
the 21st century, Africa
has seen a period of
robust economic
growth, supported by
high commodity prices,
increased foreign
investment, and
improved economic
governance and
political stability.
• Despite ongoing global
challenges, Africa is
expected to remain
resilient, growing by
7.0% CAGR between
2016-20, after Asia.
Source: IMF WEO
0
2
4
6
8
10
12
14
16
18
20
2000-15 2016-20
BRICs
Asia
SSA
US
World
EU
9
Middle Africa: High Growth Continent
9
Top Performers in 2015
Ethiopia 8.7%
DRC 8.4%
Côte d’Ivoire 8.2%
Mozambique 7.0%
Chad 6.9%
Tanzania 6.9%
Kenya 6.5%
Rwanda 6.5%
Benin 5.5%
CAR 5.5%
………… ………..
………… ………..
Ghana 3.8%
Nigeria 3.0%
Top Performers in 2016
Mozambique 8.2%
Ethiopia 8.1%
Côte d'Ivoire 7.6%
DRC 7.3%
Rwanda 7.0%
Tanzania 7.0%
Kenya 6.8%
Rep. of Congo 6.5%
Burkina Faso 6.0%
Senegal 5.9%
…………… ……..
…………… ……..
Ghana 4.8%
Nigeria 3.6%
Source: IMF; Ecobank Research
10 Source: IMF WEO
• The relative importance of
Africa in delivering global
growth is likely to increase
with the slowdown of growth
in the BRIC economies
(Brazil, Russia, India, China).
• The gap between growth in
emerging Asia and Africa is
expected to narrow in the next
five years as Africa’s policies
continue to strengthen and
domestic demand increases.
• Africa’s GDP is set to grow
nearly US$1.0 trn over the
next 5 years to US$3.1 trn.
Nominal GDP (US$ billion)
Africa is One of the Fastest Growing Regions (continued)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2000 2004 2008 2012 2016 2020
North Africa
Sub-Saharan Africa
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10 11 12 13
11
• Natural resources remain an important contributor to growth, but there is an
ongoing structural shift towards more broad-based service-driven economies that
are less reliant on volatile commodity prices.
• Many African economies are now moving from resource exporters to consumer
markets, fuelled by rising demand from the emerging middle class.
• The downturn in the global commodity market will help to accelerate this
transformation.
2/6: Africa’s Economy is Going Through an Impressive
Transformation
Source: World Bank
Natural Resources (Share of GDP %)
-------- average per period
-600 -400 -200 0 200 400 600
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Imports Exports
12
• Supported by rising demand for oil, natural gas, food, minerals and other resources, Africa
continues not only to attract investment but also to benefit from export-led growth.
• Between 2003 and 2014, Africa’s total trade flows tripled, from US$295bn to US$1.18bn.
• The EU remains Africa’s key trade partner, accounting for around one third of Africa’s trade flows,
dominated by France, the UK, Germany and the Netherlands.
• China has overtaken the USA as Africa’s single largest trading partner, with a 14% market share
in 2014, while the USA’s total share has shrunk to 6%.
Source: Intracen.
Increased Trade and Regional Integration
Africa: Trade flows (US$ bn) Africa: Key trade partners, 2014
33%
15% 14%
6%
6%
2%
24%
EU
Other Africa
China
USA
India
Brazil
Others
13
• Between 2005 and 2014, Africa’s intra-regional trade more than doubled to US$173bn, around
15% of total African trade flows. Considering that informal cross-border trade is not capture by
official data, the true level of intra-regional flows could be substantially higher.
• The share of intra-African trade remains low compared to other parts of the world (40% in the EU
and NAFTA, 60% in Asia), but it is rising each year.
• Over the past decade Africa’s regional economic integration has progressed with the
strengthening of Regional Economic Communities (RECs) and regional development corridors.
• SADC, the EAC and ECOWAS lead efforts to boost intra-regional flows and reduce trade barriers,
but long-term plans to create a single Africa Free Trade Zone (AFTZ) remain fanciful.
Increased Trade and Regional Integration (continued)
Regional Economic Communities (RECs) Year of
Establishment
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Southern African Development Community (SADC) 1992
East African Community (EAC) 2000
Economic Community of West African States
(ECOWAS) 1975
Common Market for Eastern & Southern Africa
(COMESA) 1994
Economic Community of Central African States
(ECCAS) 1983
Arab Maghreb Union (AMU) 1989
Community of Sahel-Sahara 1998
Intergovernmental Authority on Development (IGAD) 1936
Established Envisaged Non-Envisaged
14
Pillar I: Unprecedented population growth
• Africa’s population is projected to increase from around 1 billion in 2014 to almost 2 billion by
2040.
• By 2025, 20% of the world’s population will be African.
• Africa’s population will exceed that of Europe, South and North America combined.
• Compared to Asia, growth in Africa’s population is lagged by around 25 years.
4/6: Growing Population
Source: UN Population Division Source: UN Population Division
0
2
4
6
8
10
12
2015 2020 2030 2040 2050 2060 2070 2080 2090 2100
Africa
Asia
Rest of the world
Population Growth Forecast (bn) Global Population by Region (% share)
0
10
20
30
40
50
60
70
80
1980 2010 2015 2025
Asia sub-Sahara Africa
Europe Latin America
North America
15
Growing Population (continued)
Pillar II: Rise of the Middle Class
• Over the past three decades,
the number of Africa’s Middle
Class people has tripled to
around 300 million people.
• This is more than one-
third of the population.
• By 2030, over 500 million
Africans are projected to be
Middle Class.
• This is one of the fastest
rates of growth in the
Middle Class.
• Disposable income will rise in-
line with the increase in the
Middle Class.
• As will demand for better
quality goods and
services.
Source: Devarajan & Fager “Is Africa’s growth sustainable, 2012”.
2025 Likelihood of Reaching Middle Income Status
50% or more are Middle Class citizens
Between 25 - 50 % are Middle Class citizens
Lower than 25% are Middle Class citizens
16
Growing Population (continued)
Source: UN Population Division
Pillar III: Africa’s Youth
• Nearly 500 million Africans, or just over 45% of the population, are aged between 15 and 44, and
that demographic is expected to grow to around 700 million by 2030.
• Africa will be home to 30% of the world’s young people (0-14) by 2040 and have the largest
workforce.
• By 2040, the continent will have an average of about 1.1bn, more than the size of China’s or India
labour force (GBSH Consult Group).
2015 Population (million)
0 500 1,000 1,500 2,000 2,500
Age 0-14
Age 15-49
Age 50-64
Age 65+
Asia
Africa
Europe
Northern America
17
Growing Population (continued)
Source: UN Population Division
Pillar IV: Rapid Urbanisation of the
Population
• Africa’s population is increasingly clustered
in large urban centres, and urbanisation will
be a key driver of economic activity.
• From 1960 to 2011, the urban share of
Africa’s population rose from 19% to 39%,
equivalent to 416 million people in 2011.
• The urban population’s share of total
population is expected to grow from 38% in
2010 to 47% in 2030.
• By 2030, urban populations will increase by
an additional 350 million people.
• Africa has 52 cities with populations of one
million or higher, the same number as for
Europe.
0
200
400
600
800
1000
1200
1400
1600
2000 2015 2050
Southern Africa
Central Africa
North Africa
East Africa
West Africa
Urban Population (million)
18
5/6: Fiscal Discipline • 24 countries out of 52 SSA countries are now rated – nearly half.
• Majority of Africa’s sovereigns have sub-investment grade ratings, typically within the range of B- to
BB+ (S&P and Fitch scale) and one notch higher in the Moody’s framework).
• Sub-Saharan African sovereigns’ public debt ratios are relatively benign – average 30% of GDP.
• Debt profiles improved markedly in the mid-2000s following a series of debt-relief deals, often within
the framework of the HIPC and MDRI debt relief initiatives.
• Moreover, much of their debt is on concessional terms with long maturity profiles, further decreasing
risk of financial distress.
• Multilateral support from the IMF, the World bank or AfDB is key from a signalling perspective.
• But, the debt level is likely to rise amid falling commodity export earnings and hence, tax revenue.
Source: IMF, WEO
Government Debt (gross, % GDP)
0
100
200
300
400
500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016f
Russia China Sub-Saharan Africa India Brazil EU US
19
• Of the 189 nations surveyed, around one-fifth of African economies made the top 50 most
reformed economies.
• Uganda, Kenya, Senegal and Benin are amongst the global top 10 improvers in making the
biggest improvements in business regulations.
• 32 African countries implemented 74 economic reforms making it easier to do business.
• Majority of reforms were in starting a business, paying taxes, obtaining electricity and getting
credit; areas with least reforms were in trading across borders and obtaining construction
permits.
6/6:Improved Business Environment but Challenges
Remain
0
20
40
60
80
Starting aBusiness
Dealing withConstruction
Permits
GettingElectricity
RegisteringProperty
Getting Credit
ProtectingMinority
Investors
Paying Taxes
Trading AcrossBorders
EnforcingContracts
ResolvingInsolvency
Source: World Bank, Ease of Doing Business 2016
Ease of Doing Business (% score)
Low % score =
worse performer
High % score =
better performer
20
• Between 2000-12, Africa has experienced
an overall improvement in its governance.
• Around 89% of African countries have
improved their capacity to deliver economic
opportunity and human development.
• Some 67% of countries have made
progress in fostering political participation,
gender equality and human rights.
• However, the past two years have seen
some stagnation in regulatory reforms,
reflecting the tightening of markets amid
the global commodity downturn.
• Corruption continues to be prevalent in
many African countries.
• However Transparency
International’s Corruption
Perceptions Index records some
modest improvements in recent
years.
Improved Governance, although Reforms have Stalled
Source: Transparency International
Corruptions Perception Index (higher = better)
Ibrahim Index of African Governance (2015)
Source: Mo Ibrahim Foundation
0
10
20
30
40
50
602012
2013
2014
2015
40
45
50
55
60
2009 2010 2011 2012 2013 2014
HumanDevelopment
Safety & Rule ofLaw
Participation &Human Rights
SustainableEconomicOpportunityOverall Score
21
Logistics Performance Index:
• According to EY’s 2015 Africa attractiveness survey, inadequate supply of infrastructure is the
4th largest problematic factors for doing business in Africa, political instability, corruption and
insecurity.
• In 2014, SSA rated 2.46, which is the lowest LPI score globally, compared to East Asia (2.85).
• A regional comparison of the World bank’s Logistics Performance index suggests that SSA is
doing particularly poorly in terms of rail and airports infrastructure, as well as ICT.
African Transport Infrastructure Gap Remains
Source: Ernst & Young, Africa Attractiveness Survey 2015
22
Infrastructure deficit:
• 48 African countries with a population of
around 800m generate roughly the same
amount of power as Spain.
• Household electrification rate in Africa
stands at just 43%, leaving 600 million
people without access to electricity.
• Electricity coverage ranges from 65% in
urban areas to 28% in rural areas.
• While power reforms are underway,
weaker tax revenue and implementation
challenges pose risks.
African Power Deficit Persists Despite Reforms
Source: World Bank
Access to Electricity (% population)
Electricity Consumption (kWh per capita) Electricity Consumption (kWh per capita)
4000
4100
4200
4300
4400
4500
4600
4700
4800
4900
5000
0
50
100
150
200
250
300
350
400
00 02 04 06 08 10 12
Angola
Cote d'Ivoire
Ethiopia
Ghana
Kenya
Nigeria
South Africa (rhs)
0
20
40
60
80
100
120
1990 2000 2010 2012
Angola
Côte d'Ivoire
Ethiopia
Ghana
Kenya
Nigeria
South Africa
Brazil
China
India
Russia
0
2000
4000
6000
8000
10000
12000
14000
16000
00 02 04 06 08 10 12
Sub-Saharan Africa
BRIC
EU
US
23
• Africa is not one but 54 countries with different:
• Growth prospects
• Infrastructure
• Trade agreements
• Tax regulations
• Culture
• Levels of technological development
• Investors should be prepared to engage with African countries on a long-term basis
• Investors should avoid abrupt changes in investment focus because of perceived instability
in certain markets
• Investors need to manage risks associated with doing business in Africa, including:
• Fiscal and monetary policy issues such as FX restrictions
• Transparency and compliance
• Political instability and corruption
• Resource and infrastructure challenges
Strategies for Managing Risk in Africa’s Growth Markets
24
• A market entry strategy should revolve around:
• Assessing which market represents the best balance of risk and reward
• Finding and vetting an appropriate local partner
• Understanding local market regulations
• Local environmental factors and understanding the local business culture
• Levels of technological development
• Market entry risks include elements of :
• Political risk
• Reputational risk
• Operational risk
• Physical risk to staff and assets
Strategies for Managing Risk in Africa’s Growth
Markets (continued)
25
• A Risk Review Team should be established. This will help to ensure the right level and
scope of on-going risk monitoring.
• Agenda of the Risk Review Team:
• A formal and comprehensive country risk assessment
• What are the political context and drivers?
• Challenge the country risk assessment
• Has thorough due diligence been carried out on business partners?
• Is there a strategy to manage identified risks?
• What is the public profile of the business in the new market?
Strategies for Managing Risk in Africa’s Growth
Markets (continued)
