RMB FICC Research Where to invest in Africa
15 August 2011
2 RMB FICC Research Please see the last page for the disclaimer
3 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
+27 11 282-1923
John Cairns
+27 11 282-8656
Theuns de Wet
+27 11 269-9503
4 RMB FICC Research Please see the last page for the disclaimer
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
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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.
Source: RMB FICC Research
Data as at August 2011
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
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Figure 2: Most problematic factors for doing business in SSA (% of
respondents)
Source: World Economic Forum
Data as at August 2011
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
Data as at August 2011
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
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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.
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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
Data as at August 2011
• 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
Source: IMF, RMB FICC Research
Data as at August 2011
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
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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.
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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)
Source: IMF, RMB FICC Research
Data as at August 2011
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)
Source: IMF, RMB FICC Research
Data as at August 2011
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$20bn, and 15
in the smallest category. The size of the economies is put into
perspective in Figure 10.
Other, 407
South
Africa, 50
Nigeria, 156
Angola, 19
Ethiopia, 85
Kenya, 40
Tanzania,
41Sudan, 40
Note: 1 Gross domestic product (GDP) can be converted into US dollar terms using either market exchange rates or purchasing power parity levels (PPP). In this document, we use
primarily the latter method as it avoids the volatility in measurement because of fluctuating exchange rates. Relative to using market exchange rates, the PPP method in-creases the reported size of all economies, generally, the more so, the poorer the country. PPP GDP effectively measures the volume of goods and services that can be bought in the local economy based on local rather than international prices. The Appendix and Country Snapshots provide GDP based on both PPP and market exchange rates but, unless otherwise stated, GDP refers to 2010 PPP GDP as calculated by the IMF
South Africa, 524
Nigeria, 378
Angola, 107
Ethiopia, 86Kenya, 66
Tanzania, 58
Sudan, 100
Other, 581
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Geographical size does not necessarily correspond with economic
size. Because it is surrounded by some of the largest countries on
the continent, one can easily forget that Uganda has the eighth
largest population in SSA, and the 10th largest economy. And
population densities remain high further down the Rift Valley with
Figure 8: SSA GDP by country (US$bn 2010)
Source: IMF
Data as at August 2011
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
Data as at August 2011
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
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Figure 10: SSA economic sizes1
Note:
1 Circle size represents total GDP with the top 11 economies numbered
Source: IMF, RMB FICC Research
Data as at August 2011
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
Source: IMF, RMB FICC Research
Data as at August 2011
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)
Source: IMF, RMB FICC Research
Data as at August 2011
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
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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
Data as at August 2011
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
16 RMB FICC Research Please see the last page for the disclaimer
17 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
Source: IMF, RMB FICC Research
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
18 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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$)
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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
Data as at August 2011
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
21 RMB FICC Research Please see the last page for the disclaimer
Figure 16: Most problematic factors for doing business in SSA (% of
respondents)
Source: World Economic Forum
Data as at August 2011
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
Data as at August 2011
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
Uneducated workforce
Tax regulation
Tax rates
Inefficient govt bureaucracy
Inadequate infrastructure
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
22 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
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Figure 19: Infrastructure
Note:
1 None of the SSA countries are ranked as having excellent infrastructure. Data
available for only certain countries
Source: World Economic Forum
Data as at August 2011
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
24 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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%
25 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
Data as at August 2011
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
26 RMB FICC Research Please see the last page for the disclaimer
Figure 23: Political risk
Note:
1 No SSA country’s risk profile was rated as “low”
Source: AON Risk Solutions
Data as at August 2011
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”
Source: World Economic Forum
Data as at August 2011
Medium low
Medium
Medium high
High
Very high
Strong
Medium
Weak
Very weak
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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$669bn in 2008), demonstrating that SSA has
become a more substantial player in emerging market banking
(Figure 25).
Figure 25: 2008 total banking assets
Source: McKinsey & Company
Data as at August 2011
South Africa, Namibia, Mauritius, Kenya and Zambia offer a wider
variety of financial products and services which are also more
affordable (Table A10). However, extending credit in local SSA
markets remains constrained due to various factors: poor credit
discipline; high transactions costs; ceilings on bank lending rates;
and borrowers having insufficient collateral (as banks in some
countries only accept a certain range of assets as collateral). When
measuring financial intermediation by looking at the total private
credit extended by banks as a percentage of GDP, most SSA nations
still fall far behind South Africa (Table 3).
Table 3: Private credit by banks as a percentage of GDP (2007)
Source: World Bank Data as at August 2011
According to the World Economic Forum, it is most difficult to
obtain a bank loan in Côte d’Ivoire, Burkina Faso, Burundi,
Cameroon and Mali (these countries were also ranked in the bottom
10 in the world). Kenya, Botswana, Mauritius, South Africa and
Namibia are the easiest five countries in SSA in which to obtain
bank loans (Table A9).
West Africa Central Africa East Africa Southern Africa
<10% Niger Cameroon,
Chad, DRC
Uganda Lesotho,
Malawi,
Zambia
10 – 20% Benin, Burkina
Faso, Nigeria,
Côte d’Ivoire,
Rwanda,
Sudan,
Tanzania
Madagascar,
Mozambique
20 – 50% Senegal Ethiopia,
50 – 75% Cape Verde Namibia
<75% South Africa
2,122
1,210
995
669
497
0 500 1,000 1,500 2,000 2,500
India
Russia
SSA
North Africa
US$bn
Central and Eastern Europe
29 RMB FICC Research Please see the last page for the disclaimer
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
30 RMB FICC Research Please see the last page for the disclaimer
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 -
31 RMB FICC Research Please see the last page for the disclaimer
32 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
Data as at August 2011
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
33 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
34 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
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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.
36 RMB FICC Research Please see the last page for the disclaimer
37 RMB FICC Research Please see the last page for the disclaimer
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)
Source: RMB FICC Research
Data as at August 2011
Figure 31: Average consumer spending growth (2000 – 2010)
Source: EIU
Data as at August 2011
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
38 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
Data as at August 2011
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
Data as at August 2011
<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
39 RMB FICC Research Please see the last page for the disclaimer
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)
Source: IMF, RMB FICC Research
Data as at August 2011
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
40 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
Source: RMB FICC Research
Data as at August 2011
-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
41 RMB FICC Research Please see the last page for the disclaimer
42 RMB FICC Research Please see the last page for the disclaimer
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
Source: World Economic Forum
Data as at August 2011
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$55bn respectively). South Africa’s investment spending is
focussed on developing electricity generating capacity, rail and
roads. Nigeria’s investment spending focuses on improving
electricity generation capacity, roads and telecommunications. The
25 African countries that had the highest level of investment
spending in 2010 are illustrated in Figure 38.
Figure 38: Investment spending in 2010
Source: IMF, RMB FICC Research
Data as at August 2011
0
28
56
84
112
140
Namibia
Mauritius
South Africa
Botswana
Swaziland
Rwanda
Kenya
Ghana
Cape Verde
Benin
Ethiopia
Zambia
Mozambique
Lesotho
Mali
Cameroon
Uganda
Zimbabwe
Madagascar
Malawi
Burundi
Burkina Faso
Nigeria
Angola
Chad
Rank Better infrastructure Weaker infrastructure
0
20
40
60
80
South Africa
Nigeria
Angola
Kenya
Equatorial G
Ghana
Ethiopia
Tanzania
Uganda
Zambia
Botswana
Senegal
Cameroon
DRC
Gabon
Namibia
Chad
Niger
Mauritius
Congo
Mozambique
Madagascar
Mali
Burkina Faso
Malawi
US$bn
43 RMB FICC Research Please see the last page for the disclaimer
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
Source: IMF, RMB FICC Research
Data as at August 2011
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
44 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
45 RMB FICC Research Please see the last page for the disclaimer
46 RMB FICC Research Please see the last page for the disclaimer
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)
Data as at August 2011
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
Uneducated workforce
Inadequate infrastructure
Corruption
Access to financing
Currency regulations
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
47 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.9 (6th out of 45)
• GDP (market prices): US$14.0bn (14th out of 45)
• GDP (purchasing power): US$28.5bn (12th out of 45)
• GDP growth 2011 – 16: 6.1% (17th 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)
Data as at August 2011
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
Uneducated workforce
Government bureaucracy
Access to financing
Inadequate infrastructure
Labour regulation
Inflation
Corruption
Crime and theft
Poor public health
Policy instability
Tax rates
Currency regulations
Tax regulations
Government instability/coups
Botswana
• Population: 1.8m (35th of 45)
• GDP/capita (market prices): US$7,627 (4th out of 45)
• Operating environment score: 6.5 (2nd out of 45)
• Openness to foreign investment: Very open
48 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.0 (17th out of 45)
• GDP (market prices): US$8.8bn (23rd out of 45)
• GDP (purchasing power): US$20bn (19th out of 45)
• GDP growth 2011 – 16: 6.1% (18th 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)
Data as at August 2011
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
Inadequate infrastructure
Uneducated workforce
Government bureaucracy
Tax rates
Labour regulation
Inflation
Poor work ethic
Currency regulations
Poor public health
Crime and theft
Policy instability
Government instability/coups
Burkina Faso
• Population: 14.7m (16th out of 45)
• GDP/capita (market prices): US$598 (27th out of 45)
• Operating environment score: 3.2 (21st out of 45)
• Openness to foreign investment: Open
49 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.9 (19th out of 45)
• GDP (market prices): US$22.5bn (10th out of 45)
• GDP (purchasing power): US$44.3bn (9th out of 45)
• GDP growth 2011 – 16: 4.4% (34th 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)
Data as at August 2011
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
Inadequate infrastructure
Government bureaucracy
Tax rates
Labour regulation
Poor work ethic
Inflation
Currency regulations
Uneducated workforce
Crime and theft
Policy instability
Poor public health
Government instability/coups
Cameroon
• Population: 20.4m (13th out of 45)
• GDP/capita (market prices): US$1,101 (17th out of 45)
• Operating environment score: 2.7 (28th out of 45)
• Openness to foreign investment: Open
50 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.0 (16th out of 45)
• GDP (market prices): US$22.8bn (8th out of 45)
• GDP (purchasing power): US$37.0bn (11th out of 45)
• GDP growth 2011 – 16: 3.3% (43rd 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)
Data as at August 2011
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
Government instability/coups
Policy instability
Tax regulations
Crime and theft
Tax rates
Government bureaucracy
Inadequate infrastructure
Uneducated workforce
Poor work ethic
Labour regulation
Poor public health
Inflation
Currency regulations
Côte d’Ivoire
• Population: 22m (10th out of 45)
• GDP/capita (market prices): US$1,036 (18th out of 45)
• Operating environment score: 4.0 (10th out of 45)
• Openness to foreign investment: Very open
51 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.4 (26th out of 45)
• GDP (market prices): US$13.1bn (15th out of 45)
• GDP (purchasing power): US$23.1bn (15th out of 45)
• GDP growth 2011 – 16: 6.5% (14th out of 45)
Most problematic factors for doing business
Note: Percentage of firms identifying the problem as their greatest obstacle
Source: World Bank Group
Data as at August 2011
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)
• GDP/capita (market prices): US$186 (44th 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
52 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.0 (34th out of 45)
• GDP (market prices): US$14.5bn (13th out of 45)
• GDP (purchasing power): US$23.8bn (14th out of 45)
• 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
• Population: 1.3m (39th out of 45)
• GDP/capita (market prices): US$11,033 (1st out of 45)
• Operating environment score: 2.1 (34th out of 45)
• Openness to foreign investment: Restrictive
53 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 4.3 (4th out of 45)
• GDP (market prices): US$29.7bn (7th out of 45)
• GDP (purchasing power): US$86.1bn (5th out of 45)
• GDP growth 2011 – 16: 8.1% (2nd 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)
Data as at August 2011
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%
Currency regulations
Access to financing
Inflation
Government bureaucracy
Corruption
Inadequate infrastructure
Tax regulations
Uneducated workforce
Poor work ethic
Tax rates
Policy instability
Labour regulation
Poor public health
Crime and theft
Government instability/coups
Ethiopia
• Population: 84.8m (2nd out of 45)
• GDP/capita (market prices): US$350 (40th out of 45)
• Operating environment score: 3.4 (18th out of 45)
• Openness to foreign investment: Very restrictive
54 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.4 (25th out of 45)
• GDP (market prices): US$13.1bn (16th out of 45)
• GDP (purchasing power): US$22.5bn (16th out of 45)
• GDP growth 2011 – 16: 3.1% (44th out of 45)
Most problematic factors for doing business
Note: Percentage of firms identifying the problem as their greatest obstacle
Source: World Bank Group
Data as at August 2011
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
• Open to foreign investment
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
Uneducated workforce
Informal sector
Access to financing
Tax administration
Customs & trade reg
Crime, theft and disorder
Tax rates
Gabon
• Population: 1.5m (38th out of 45)
• GDP/capita (market prices): US$8,724 (3rd out of 45)
• Operating environment score: 3.2 (22nd out of 45)
• Openness to foreign investment: Open
55 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 4.4 (3rd out of 45)
• GDP (market prices): US$31.1bn (6th out of 45)
• GDP (purchasing power): US$62.0bn (7th out of 45)
• GDP growth 2011 – 16: 7.9% (3rd 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)
Data as at August 2011
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
Inadequate infrastructure
Inflation
Government bureaucracy
Corruption
Tax rates
Poor work ethic
Tax regulations
Policy instability
Uneducated workforce
Crime and theft
Currency regulations
Labour regulation
Poor public health
Government instability/coups
Ghana
• Population: 23.7m (9th out of 45)
• GDP/capita (market prices): US$1,312 (14th out of 45)
• Operating environment score: 4.8 (6th out of 45)
• Openness to foreign investment: Very open
56 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.9 (7th out of 45)
• GDP (market prices): US$32.2bn (5th out of 45)
• GDP (purchasing power): US$66.0bn (6th out of 45)
• GDP growth 2011 – 16: 6.5% (13th 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)
Data as at August 2011
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
Government bureaucracy
Inadequate infrastructure
Crime and theft
Inflation
Tax rates
Tax regulations
Policy instability
Poor work ethic
Government instability/coups
Labour regulation
Currency regulations
Uneducated workforce
Poor public health
Kenya
• Population: 39.7m (7th out of 45)
• GDP/capita (market prices): US$809 (21st out of 45)
• Operating environment score: 3.6 (14th out of 45)
• Openness to foreign investment: Open
57 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.7 (22nd out of 45)
• GDP (market prices): US$8.3bn (24th out of 45)
• GDP (purchasing power): US$19.4bn (20th out of 45)
• GDP growth 2011 – 16: 4.1% (38th 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)
Data as at August 2011
Strengths
• A large population
• A relatively efficient labour market
• High investment spending
• 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%
Government instability/coups
Policy instability
Corruption
Access to financing
Crime and theft
Inflation
Tax regulations
Inadequate infrastructure
Tax rates
Poor work ethic
Government bureaucracy
Currency regulations
Uneducated workforce
Labour regulation
Poor public health
Madagascar
• Population: 21.3m (12th out of 45)
• GDP/capita (market prices): US$392 (38th out of 45)
• Operating environment score: 3.6 (16th out of 45)
• Openness to foreign investment: Restrictive
58 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.9 (20th out of 45)
• GDP (market prices): US$5.1bn (30th out of 45)
• GDP (purchasing power): US$13.0bn (27th out of 45)
• GDP growth 2011 – 16: 5.5% (22nd 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)
Data as at August 2011
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
Currency regulations
Inadequate infrastructure
Tax rates
Tax regulations
Corruption
Uneducated workforce
Poor work ethic
Crime and theft
Inflation
Government bureaucracy
Policy instability
Labour regulation
Poor public health
Government instability/coups
Malawi
• Population: 15.7m (15th out of 45)
• GDP/capita (market prices): US$322 (42nd out of 45)
• Operating environment score: 3.5 (17th out of 45)
• Openness to foreign investment: Neutral
59 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.4 (11th out of 45)
• GDP (market prices): US$9.7bn (21st out of 45)
• GDP (purchasing power): US$18.1bn (21st out of 45)
• GDP growth 2011 – 16: 4.3% (36th 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)
Data as at August 2011
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%
Government bureaucracy
Inadequate infrastructure
Uneducated workforce
Poor work ethic
Access to financing
Corruption
Labour regulation
Inflation
Crime and theft
Tax regulations
Currency regulations
Policy instability
Poor public health
Tax rates
Government instability/coups
Mauritius
• Population: 1.3m (40th out of 45)
• GDP/capita (market prices): US$7,593 (5th out of 45)
• Operating environment score: 7.2 (1st out of 45)
• Openness to foreign investment: Very open
60 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.3 (13th out of 45)
• GDP (market prices): US$9.9bn (20th out of 45)
• GDP (purchasing power): US$21.8bn (17th out of 45)
• GDP growth 2011 – 16: 7.8% (4th 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)
Data as at August 2011
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
• Open to foreign investment
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
Government bureaucracy
Inflation
Inadequate infrastructure
Currency regulations
Crime and theft
Uneducated workforce
Tax rates
Tax regulations
Labour regulation
Poor work ethic
Poor public health
Policy instability
Government instability/coups
Mozambique
• Population: 21.6m (11th out of 45)
• GDP/capita (market prices): US$458 (34th out of 45)
• Operating environment score: 3.3 (20th out of 45)
• Openness to foreign investment: Open
61 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.0 (15th out of 45)
• GDP (market prices): US$11.9bn (18th out of 45)
• GDP (purchasing power): US$14.6bn (25th out of 45)
• GDP growth 2011 – 16: 4.5% (32nd 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)
Data as at August 2011
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%
Uneducated workforce
Access to financing
Government bureaucracy
Labour regulation
Poor work ethic
Corruption
Tax rates
Inadequate infrastructure
Crime and theft
Inflation
Tax regulations
Poor public health
Currency regulations
Policy instability
Government instability/coups
Namibia
• Population: 2.1m (34th out of 45)
• GDP/capita (market prices): US$5,652 (7th out of 45)
• Operating environment score: 5.5 (4th out of 45)
• Openness to foreign investment: Very open
62 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• 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)
• GDP growth 2011 – 16: 6.4% (15th 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)
Data as at August 2011
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
Inadequate infrastructure
Corruption
Policy instability
Government instability/coups
Government bureaucracy
Inflation
Uneducated workforce
Crime and theft
Poor work ethic
Currency regulations
Labour regulation
Poor public health
Tax rates
Tax regulations
Nigeria
• Population: 156.1m (1st out of 45)
• GDP/capita (market prices): US$1,389 (13th out of 45)
• Operating environment score: 3.1 (25th out of 45)
• Openness to foreign investment: Open
63 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.3 (12th out of 45)
• GDP (market prices): US$5.6bn (28th out of 45)
• GDP (purchasing power): US$12.2bn (28th out of 45)
• GDP growth 2011 – 16: 6.7% (12th 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)
Data as at August 2011
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
Inadequate infrastructure
Uneducated workforce
Poor work ethic
Government bureaucracy
Policy instability
Inflation
Currency regulations
Poor public health
Corruption
Crime and theft
Labour regulation
Government instability/coups
Rwanda
• Population: 10m (24th out of 45)
• GDP/capita (market prices): US$562 (29th out of 45)
• Operating environment score: 5.2 (5th out of 45)
• Openness to foreign investment: Very open
64 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 2.9 (18th out of 45)
• GDP (market prices): US$12.9bn (17th out of 45)
• GDP (purchasing power): US$23.9bn (13th out of 45)
• GDP growth 2011 – 16: 5.0% (26th 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)
Data as at August 2011
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
Inadequate infrastructure
Inflation
Labour regulation
Government bureaucracy
Currency regulations
Uneducated workforce
Poor work ethic
Policy instability
Crime and theft
Poor public health
Government instability/coups
Senegal
• Population: 13.1m (20th out of 45)
• GDP/capita (market prices): US$981 (19th out of 45)
• Operating environment score: 3.4 (19th out of 45)
• Openness to foreign investment: Very open
65 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• 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)
• GDP growth 2011 – 16: 4.1% (37th 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)
Data as at August 2011
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%
Government bureaucracy
Uneducated workforce
Crime and theft
Labour regulation
Corruption
Inadequate infrastructure
Poor work ethic
Access to financing
Policy instability
Poor public health
Currency regulations
Inflation
Tax rates
Tax regulations
Government instability/coups
South Africa
• Population: 49.9m (4th out of 45)
• GDP/capita (market prices): US$7,158 (6th out of 45)
• Operating environment score: 6.1 (3rd out of 45)
• Openness to foreign investment: Open
66 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.1 (14th out of 45)
• GDP (market prices): US$68.4bn (4th 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)
• Population: 40.1m (6th out of 45)
• GDP/capita (market prices): US$1,705 (12th out of 45)
• Operating environment score: 1.9 (38th out of 45)
• Openness to foreign investment: Very restrictive
67 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.9 (5th out of 45)
• GDP (market prices): US$22.7bn (9th out of 45)
• GDP (purchasing power): US$58.4bn (8th out of 45)
• GDP growth 2011 – 16: 7.1% (9th 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)
Data as at August 2011
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
Inadequate infrastructure
Tax rates
Tax regulations
Crime and theft
Government bureaucracy
Inflation
Poor work ethic
Uneducated workforce
Labour regulation
Currency regulations
Poor public health
Policy instability
Government instability/coups
Tanzania
• Population: 41.3m (5th out of 45)
• GDP/capita (market prices): US$548 (30th out of 45)
• Operating environment score: 3.6 (15th out of 45)
• Openness to foreign investment: Open
68 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.7 (8th out of 45)
• GDP (market prices): US$17.0bn (11th out of 45)
• GDP (purchasing power): US$42.2bn (10th out of 45)
• GDP growth 2011 – 16: 6.7% (11th 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)
Data as at August 2011
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
Inadequate infrastructure
Tax rates
Poor work ethic
Government bureaucracy
Inflation
Uneducated workforce
Tax regulations
Crime and theft
Poor public health
Policy instability
Currency regulations
Labour regulation
Government instability/coups
Uganda
• Population: 34m (8th out of 45)
• GDP/capita (market prices): US$501 (32nd out of 45)
• Operating environment score: 3.7 (12th out of 45)
• Openness to foreign investment: Open
69 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 3.5 (10th out of 45)
• GDP (market prices): US$16.2bn (12th out of 45)
• GDP (purchasing power): US$20.0bn (18th out of 45)
• GDP growth 2011 – 16: 7.6% (6th 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)
Data as at August 2011
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
• High investment spending
• 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
Inadequate infrastructure
Tax rates
Government bureaucracy
Inflation
Poor work ethic
Tax regulations
Crime and theft
Uneducated workforce
Policy instability
Currency regulations
Poor public health
Labour regulation
Government instability/coups
Zambia
• Population: 13.3m (19th out of 45)
• GDP/capita (market prices): US$1,221 (15th out of 45)
• Operating environment score: 4.2 (9th out of 45)
• Openness to foreign investment: Very open
70 RMB FICC Research Please see the last page for the disclaimer
Snapshot (2010 statistics)
• Investment attractiveness: 1.5 (43rd out of 45)
• GDP (market prices): US$7.5bn (26th out of 45)
• GDP (purchasing power): US$5.5bn (33rd out of 45)
• GDP growth 2011 – 16: 5.6% (20th 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)
Data as at August 2011
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
Inadequate infrastructure
Government instability/coups
Government bureaucracy
Corruption
Labour regulation
Crime and theft
Poor public health
Tax rates
Tax regulations
Poor work ethic
Uneducated workforce
Currency regulations
Inflation
Zimbabwe
• Population: 12.6m (21st out of 45)
• GDP/capita (market prices): US$594 (28th out of 45)
• Operating environment score: 1.0 (45th out of 45)
• Openness to foreign investment: Very restrictive
71 RMB FICC Research Please see the last page for the disclaimer
72 RMB FICC Research Please see the last page for the disclaimer
Table A1: Economic size and the composition of GDP (2010)
Note:
The ranking is according to size of GDP (US$bn)
Source: IMF, World Development Indicators
Data as at August 2011
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 - -
73 RMB FICC Research Please see the last page for the disclaimer
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
74 RMB FICC Research Please see the last page for the disclaimer
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
(%)
75 RMB FICC Research Please see the last page for the disclaimer
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
Data as at August 2011
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
76 RMB FICC Research Please see the last page for the disclaimer
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 - - - - - - - - - - - - -
77 RMB FICC Research Please see the last page for the disclaimer
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
78 RMB FICC Research Please see the last page for the disclaimer
Table A7: Political risk for trade and investment
Note:
The ranking is according to size of GDP (US$bn) Source: Financial Times and Aon Risk Solutions Data as at August 2011
Overall risk
Exchange
transfer War/civil war Strikes/riots
Sovereign non-
payment
Legal and
regulatory
Political
interference
Supply chain
vulnerability
South Africa Medium low � � �
Nigeria High � � � � �
Angola Medium high � � � � �
Sudan Very high � � � � � �
Ethiopia Medium high � � � � �
Kenya Medium high � � � � �
Ghana Medium high � � � � �
Tanzania Medium high � � � �
Cameroon Medium � � �
Uganda Medium � � � � � �
Côte d'Ivoire High � � � � � � �
Botswana Medium low
Senegal Medium high � � �
Equatorial Guinea High � � � �
DRC Very high � � � � � � �
Gabon Medium � � �
Mozambique Medium � � �
Zambia Medium � � � �
Burkina Faso Medium high � � � �
Madagascar Medium high � � � � � �
Mauritius Not rated - - - - - - -
Chad High � � � � � �
Congo High � � �
Mali Medium high �
Namibia Medium low �
Benin Medium high � � �
Malawi Medium high � � � �
Rwanda Medium high � � � �
Niger High � � � � � �
Guinea High � � � � � �
Swaziland Medium high � �
Togo Medium high � � �
Zimbabwe Very high � � � � � �
Sierra Leone Medium high � � �
Eritrea High � � � � � �
Gambia Medium high �
CAR High � � � � � �
Burundi High � � � � �
Lesotho Medium � �
Seychelles Not rated - - - - - - -
Cape Verde Not rated - - - - - - -
Guinea-Bissau High � � � � � �
Liberia High � � � � �
Comoros Not rated - - - - - - -
Sao Tome and Principe Not rated - - - - - - -
79 RMB FICC Research Please see the last page for the disclaimer
Table A8: Strength of the legal and administrative environment
Note:
The ranking is according to size of GDP (US$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 - - - - - - -
80 RMB FICC Research Please see the last page for the disclaimer
Table A9: Sovereign long-term foreign currency ratings
Note: The ranking is according to size of GDP (US$bn) P = Positive outlook N = Negative outlook Source: Fitch Ratings, Moody’s, Standard and Poor’s Data as at August 2011
Fitch Moody's Standard and Poor's
South Africa BBB+ (N) A3 BBB+
Nigeria BB- (N) - B+
Angola BB- Ba3 BB-
Sudan - - -
Ethiopia - - -
Kenya B+ - B+
Ghana B+ (N) - B
Tanzania - - -
Cameroon B - B
Uganda B - B+
Côte d'Ivoire - - -
Botswana - A2 A-
Senegal - - B+ (N)
Equatorial Guinea - -
DRC - - -
Gabon BB- - BB-
Mozambique B - B+
Zambia B+ - B+
Burkina Faso - - B+
Madagascar - - -
Mauritius - Baa2 -
Chad - - -
Congo - - -
Mali B- - -
Namibia BBB- - -
Benin B - B
Malawi B- - -
Rwanda B- (P) - -
Niger - - -
Guinea - - -
Swaziland - - -
Togo - - -
Zimbabwe - - -
Sierra Leone - - -
Eritrea - - -
Gambia - - -
CAR - - -
Burundi - - -
Lesotho BB- (N) - -
Seychelles - - -
Cape Verde B+ - B+ (N)
Guinea-Bissau - - -
Liberia - - -
Comoros - - -
Sao Tome and Principe - - -
81 RMB FICC Research Please see the last page for the disclaimer
Table A10: Financial market development
Note: The ranking is according to size of GDP (US$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 - - - - -
82 RMB FICC Research Please see the last page for the disclaimer
Table A11: Financial market development (continued)
Note: The ranking is according to size of GDP (US$bn) Source: World Economic Forum Data as at August 2011
Venture capital
availability
Restriction on capital
flows Soundness of banks
Regulation of securities
exchange
1 = very difficult;
7 = very easy
1 = highly restrictive;
7 = not restrictive
1 = insolvent;
7 = healthy with good
balance sheet
1 = ineffective;
7 = effective
South Africa 3.0 3.9 6.5 6.0
Nigeria 2.0 4.0 4.1 4.0
Angola 1.8 1.9 4.6 2.5
Sudan - - - -
Ethiopia 2.1 3.1 4.7 3.1
Kenya 3.1 4.2 5.1 3.7
Ghana 2.1 4.5 5.3 4.5
Tanzania 2.6 3.9 4.3 3.8
Cameroon 1.8 3.9 4.9 3.2
Uganda 1.9 4.8 5.2 3.9
Côte d'Ivoire 1.6 3.7 4.7 4.3
Botswana 2.9 5.2 5.6 4.4
Senegal 2.3 3.7 5.4 3.6
Equatorial Guinea - - - -
DRC - - - -
Gabon - - - -
Mozambique 2.1 3.4 5.2 3.7
Zambia 2.0 4.6 5.3 4.4
Burkina Faso 1.5 3.2 4.8 3.4
Madagascar 2.5 3.0 4.8 2.2
Mauritius 2.8 5.7 6.1 5.7
Chad 2.3 3.0 3.6 2.5
Congo - - - -
Mali 1.7 3.3 3.9 2.6
Namibia 2.6 4.0 6.2 5.0
Benin 2.6 4.0 5.1 4.3
Malawi 1.8 3.7 5.7 4.2
Rwanda 2.5 4.6 4.7 4.2
Niger - - - -
Guinea - - - -
Swaziland 2.3 4.0 5.5 3.9
Togo - - - -
Zimbabwe 1.7 3.6 3.4 3.9
Sierra Leone - - - -
Eritrea - - - -
Gambia 2.5 4.5 5.1 4.0
CAR - - - -
Burundi 1.5 2.7 3.5 1.9
Lesotho 2.1 3.7 4.5 2.9
Seychelles - - - -
Cape Verde 2.1 4.3 5.4 4.5
Guinea-Bissau - - - -
Liberia - - - -
Comoros - - - -
Sao Tome and Principe - - - -
83 RMB FICC Research Please see the last page for the disclaimer
Table A12: Ease of getting credit
Note: The ranking is according to size of GDP (US$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
84 RMB FICC Research Please see the last page for the disclaimer
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 � - - -
85 RMB FICC Research Please see the last page for the disclaimer
Table A14: Corporate bonds
Note: The ranking is according to size of GDP (US$bn) 1 These countries are part of the Bourse Regionale des Valuers Mobilieres (BRVM) ,
which lists 27 corporate bonds. It does not mean that each country has issued 27 corporate bonds
Source: Respective stock exchange websites, Bloomberg, Reuters, RMB Morgan Stanley Data as at August 2011
Corporate bonds Issued (est.)
South Africa � 240
Nigeria � 4
Angola � -
Sudan - -
Ethiopia - -
Kenya � 5
Ghana � 1
Tanzania � 6
Cameroon - -
Uganda � -
Côte d'Ivoire1 � 27
Botswana � 27
Senegal1 � 27
Equatorial Guinea - -
DRC - -
Gabon � -
Mozambique � 5
Zambia � 7
Burkina Faso1 � 27
Madagascar - -
Mauritius � 25
Chad - -
Congo � -
Mali1 � 27
Namibia � 16
Benin1 � 27
Malawi � -
Rwanda � -
Niger1 � 27
Guinea - -
Swaziland � -
Togo1 � 27
Zimbabwe � -
Sierra Leone - -
Eritrea - -
Gambia - -
CAR - -
Burundi - -
Lesotho - -
Seychelles �
Cape Verde - -
Guinea-Bissau1 � 27
Liberia - -
Comoros - -
Sao Tome and Principe � -
86 RMB FICC Research Please see the last page for the disclaimer
Table A15: Production of major resources (2008)
Note: The ranking is according to size of GDP (US$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%
87 RMB FICC Research Please see the last page for the disclaimer
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
88 RMB FICC Research Please see the last page for the disclaimer
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%
89 RMB FICC Research Please see the last page for the disclaimer
Table A18: Prospective deposits, current projects, and mines
Note:
The ranking is according to size of GDP (US$bn)
The table includes information on diamonds, gold, copper, uranium, platinum and iron
ore only.
Source: Resource Information Unit
Data as at August 2011
Prospects Projects Mines
South Africa 89 72 99
Nigeria 5 1 0
Angola 15 9 9
Sudan 5 2 3
Ethiopia 13 3 1
Kenya 6 0 1
Ghana 45 14 9
Tanzania 107 14 8
Cameroon 12 2 1
Uganda 16 0 1
Côte d'Ivoire 22 3 4
Botswana 28 10 11
Senegal 14 3 2
Equatorial Guinea 0 0 0
DRC 0 0 0
Gabon 7 2 0
Mozambique 22 4 0
Zambia 33 10 10
Burkina Faso 56 4 6
Madagascar 25 1 1
Mauritius - - -
Chad 1 0 0
Congo - - -
Mali 40 5 7
Namibia 60 14 9
Benin 0 0 0
Malawi 9 1 1
Rwanda 0 0 0
Niger 19 3 3
Guinea 24 5 3
Swaziland 1 1 0
Togo 1 0 0
Zimbabwe 18 14 12
Sierra Leone 13 11 2
Eritrea 14 0 0
Gambia - - -
CAR 6 3 0
Burundi 1 0 0
Lesotho 0 4 2
Seychelles - - -
Cape Verde - - -
Guinea-Bissau - - -
Liberia 19 4 0
Comoros - - -
Sao Tome and Principe - - -
90 RMB FICC Research Please see the last page for the disclaimer
Table A19: Number of individuals in different household consumption brackets
Note:
The ranking is according to size of GDP (US$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$20,000(‘000)
South Africa 318,600 19,189 14,652 8,223 4,900.4 3,154.3
Nigeria 236,977 124,517 26,095 5,618 1,236.4 232.5
Angola 22,127 16,339 2,079 470 159.1 32.8
Sudan 81,573 31,021 10,269 1,788 400.8 64.1
Ethiopia 69,189 79,371 3,252 299 22.2 0.6
Kenya 54,412 34,432 4,729 971 316.8 56.6
Ghana 25,977 21,684 2,299 334 65.5 5.7
Tanzania 39,251 42,090 2,527 203 17.3 0.4
Cameroon 31,714 15,460 3,261 643 190.7 40.4
Uganda 36,012 30,195 2,609 509 100.6 8.7
Côte d'Ivoire 24,800 17,093 2,032 418 158.5 34.0
Botswana 10,043 855 689 302 80.2 81.1
Equatorial Guinea 1,297 517 144 27 10.7 2.3
Senegal 17,993 10,030 2,047 290 59.2 5.9
DRC 15,036 65,600 339 26 0.6 0.0
Gabon 6,357 449 696 262 74.1 24.5
Mozambique 18,219 21,986 1,066 263 66.5 8.3
Zambia 11,786 11,937 922 182 42.0 4.9
Burkina Faso 13,174 15,500 817 127 21.7 1.5
Madagascar 15,396 19,690 689 242 78.8 13.0
Mauritius 12,311 27 288 580 324.3 79.0
Chad 5,462 11,012 201 13 0.7 0.0
Congo 6,714 3,110 737 141 45.6 9.0
Mali 9,989 14,769 543 53 5.2 0.1
Namibia 9,063 1,520 412 187 72.3 90.9
Benin 9,092 8,057 670 102 18.3 1.6
Malawi 9,037 14,410 431 53 5.8 0.2
Rwanda 9,255 9,868 582 136 33.1 4.1
Niger 7,504 15,118 341 48 5.1 0.2
Guinea 7,462 9,400 491 76 13.4 0.9
Swaziland 5,311 417 493 190 53.3 32.7
Togo 4,845 5,634 348 40 4.7 0.1
Zimbabwe 3,620 12,412 143 16 1.1 0.0
Sierra Leone 3,655 5,621 216 26 3.4 0.1
Eritrea 2,281 5,204 47 3 0.1 0.0
Gambia 2,389 1,439 232 43 12.9 1.4
CAR 3,302 4,137 231 28 3.7 0.1
Burundi 3,807 8,279 98 5 0.2 0.0
Lesotho 3,825 1,606 443 86 29.9 5.4
Seychelles 1,079 4 37 29 9.8 6.7
Cape Verde 1,539 264 164 46 15.3 7.0
Guinea-Bissau 1,378 1,430 76 9 0.5 0.0
Liberia 3,088 3,768 198 24 3.5 0.1
Comoros 667 681 31 14 6.9 1.7
Sao Tome and Principe 325 126 30 5 2.8 1.4
91 RMB FICC Research Please see the last page for the disclaimer
Table A20: Drivers of consumption
Note:
The ranking is according to size of GDP (US$bn)
1 Change between 2010 – 2020, not the annual average change
Source: IMF, World Economic Forum, RMB FICC Research
Data as at August 2011
GDP per capita ($bn) Population (m)
GDP per capita
growth rate (%)
(2010 – 2016)
Population growth rate
(%)
(2010 – 2016)
Urbanisation growth rate
(%)
(2010 – 2020)1
South Africa 7,158 49.9 2.9 1.2 12.3
Nigeria 1,389 156.1 3.5 2.8 39.2
Angola 4,478 19.1 4.1 3.0 47.5
Sudan 1,705 49.9 2.9 1.2 12.3
Ethiopia 350 84.8 5.6 2.3 55.0
Kenya 809 39.7 3.5 2.9 52.4
Ghana 1,312 23.7 4.6 2.6 35.3
Tanzania 548 41.3 5.0 2.0 50.7
Cameroon 1,101 20.4 1.8 2.5 33.1
Uganda 501 34.0 3.0 3.6 64.6
Côte d'Ivoire 1,036 - - - -
Botswana 7,627 1.8 4.2 1.3 22.6
Senegal 981 13.1 2.6 2.4 35.6
Equatorial Guinea 11,033 1.3 -0.4 2.9 61.5
DRC 186 70.5 3.3 3.0 34.8
Gabon 8,724 1.5 1.7 1.5 18.7
Mozambique 458 21.6 5.6 2.0 13.5
Zambia 1,221 13.3 5.0 2.5 31.2
Burkina Faso 598 14.7 3.7 2.3 22.6
Madagascar 392 21.3 1.7 2.5 46.4
Mauritius 7593 1.3 3.7 0.6 13.5
Chad 768 10.2 1.3 2.5 60.8
Congo 2,983 - - - -
Mali 692 13.4 2.1 3.0 60.0
Namibia 5,652 2.1 3.6 0.8 31.6
Benin 689 9.6 1.7 2.8 46.5
Malawi 322 15.7 2.5 2.8 64.4
Rwanda 562 10.0 4.4 2.1 55.3
Niger 381 14.6 4.4 3.1 31.6
Guinea 448 10.3 2.2 2.5 51.5
Swaziland 3,061 1.2 2.4 -0.4 24.6
Togo 459 7.0 1.4 2.5 46.5
Zimbabwe 594 12.6 5.4 0.0 27.3
Sierra Leone 326 5.8 3.0 2.6 39.7
Eritrea 398 5.3 1.1 2.9 65.9
Gambia 617 1.5 1.7 1.5 18.7
CAR 436 4.6 2.7 2.5 29.1
Burundi 180 8.3 2.8 2.0 83.6
Lesotho 837 2.5 2.6 1.8 36.0
Seychelles 10,682 0.1 4.5 0.2 15.7
Cape Verde 3,157 0.5 3.7 2.8 34.4
Guinea-Bissau 509 1.6 2.1 2.5 48.4
Liberia 226 4.3 4.0 3.1 49.8
Comoros 802 0.7 1.5 2.1 34.8
Sao Tome and Principe 1,183 - - - -
92 RMB FICC Research Please see the last page for the disclaimer
Table A21: Indicators of the state of infrastructure and spending
Note: The ranking is according to size of GDP (US$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 - - - - - - -
93 RMB FICC Research Please see the last page for the disclaimer
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/
94 RMB FICC Research Please see the last page for the disclaimer
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
95 RMB FICC Research Please see the last page for the disclaimer
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/
96 RMB FICC Research Please see the last page for the disclaimer
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/
97 RMB FICC Research Please see the last page for the disclaimer
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/
98 RMB FICC Research Please see the last page for the disclaimer
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100 RMB FICC Research
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accounting, appraisal, valuation or actuarial services. A rating should not be viewed as a replacement for such advice or services. Ratings may be raised,
lowered, placed on Rating Watch or withdrawn at any time for any reason in the sole discretion of the agencies. The assignment of a rating by the agencies
does not constitute consent by the ratings agencies to the use of its name as an expert in connection with any registration statement or other filings under
US, UK or any other relevant securities laws.