Transcript PwC - The Africa Experience

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An African Experience:
A PwC Perspective
Danie Fölscher
26May 2014
Agenda
- The case for Africa
- A clear industry focus
- Our incubation network
An African Experience: a PwC perspective
May 2014
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The case for Africa
An African Experience: a PwC perspective
May 2014
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Africa megatrends
2
1
3
5
An African Experience: a PwC perspective
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PwC Africa – responding to needs and
opportunities
• Delivering Assurance, Advisory,
Tax and Internal Firm Services in
three market areas
• Combined staff: more than 9 000
• Approach by industry
• An aligned governance, leadership
and management structure
A clear industry focus
Mining
Agriculture
Energy
Financial Services
Telecommunication
May 2014
6
We see several key sectors developing rapidly
Agriculture
Energy and mining
• Large part of global reserves
• New discoveries
80%
with no bank account
• Opportunity for services in
this space
12 %
Financial services
• Productivity gains
• Growth of agricultural
exports
27%
• Significant opportunities in
banking and insurance
unused agricultural land
• Annual growth of over 20%
• Opportunities with new
business models in banking
(mobile payment)
Infrastructure and
utilities
• Cell phones to accelerate
development, including in
banking
• New services to private
clients and corporate
services
of global wealth in 2050...
Telecommunications
An African Experience: a PwC perspective
• Around $45b is invested
annually in infrastructure
• Will increase to meet
current and future
requirements
Energy and mining
Naftal
Soc. Nat. De l’électricité
et du gaz
Sonangol
Sonatrach
Key characteristics of the African markets
Office
Chérifien des
Phosphates
Soc. nationale
industrielle et
minière
Tarkwa
Mines
Oando
Kansanshi
Mining
Soc. Nat. des hydrocarbures
Konkola
Copper Mines
Cie Minière de l’Ogooue
•
Africa’s growth success – ability to supply
the world with scarce resources.
•
Demand stimulated by manufacturing
activity growth and construction
expenditures recovers.
•
Abundance of the resources : 30% of the
world's mineral reserves, 60% diamonds,
90% platinum...
Endiam
a
Total E&P Angola
Production and proven reserves of mineral
commodities in Africa, 2010
Namdeb Diamond Corp.
Anglo Platinium Corp.
De Beers Conso. Mines
Palabora Mining Co.
Assore
Lonmin
500 m $ < income < 1 bn $
1 bn$ < income < 3 bn$
3 bn$ < income < 5 bn $
5 bn $ < income < 10 bn $
10 bn $ < income
Petroleum, gas
African Rainbow
Minerals
Exxaro
Ressources
Anglogold Ashanti
Kumba Iron Ore
Gold Fields
Impala Platinum
Holdings
Harmony Gold mining Co.
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Telecommunications
Algérie Telecom
Algérie Telecom
Mobilis
Orascom
Télécom Algérie
Maroc Telecom
Tunisiana
Medi Telecom
Telecom Egypt
Mobinil
Orascom Telecom
Zain Sudan
Sudanese
Telecom co.
Key characteristics of the African markets
• Rising numbers of subscribers: the
number of subscribers has grown by
about 20% per annum over each of the
past 5 years
• Rising demand for mobile applications
• High level of interest in IT space from
international investors
Société nationale des
télécommunications du
Sénégal
• Google set up an office in Kenya
MTN Ghana
• Growth of mobile payments
MTN Nigeria
Safaricom
Airtel Nigeria
500 m $ < income < 1 bn $
1 bn$ < income < 3 bn$
3 bn$ < income < 5 bn $
Market penetration
5 bn $ < income < 10 bn $
10 bn $ < income
0-20%
MTN Group
Vodacom Group
Telkom
Vodacom South Africa
MTN South Africa
21-70%
71+%
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Financial services: Banking
Crédit Populaire du Maroc
Attijariwafa Bank
Banque MISR
Key characteristics of the African markets
•
Huge areas under banked – currently approximately 80% of
Africans do not have a bank account
•
Many small players : opportunities for consolidation and gaps
for new entrants
•
Growth in lower cost models: Kenya and Tanzania are leading in
mobile banking development
•
Major opportunities exist to expand banking operations
throughout Africa, offering better services to private clients and
value added corporate services in advanced economies
National Bank of Egypt
Largest banks in Africa
Company
Country
Standard Bank Group
South Africa
ABSA group
South Africa
FirstRand Banking Group
South Africa
Nedbank Group
South Africa
National Bank of Egypt (NBE)
Egypt
Attijariwafa Bank
Morocco
Banque MISR
Egypt
Crédit Populaire du Maroc
Morocco
Banque Maroc. du Commerce Ext. (BMCE)
Morocco
Banque Maroc. du Commerce Ext. (BMCE)
Standard
Bank
Group
Nedbank Group
ABSA Group
FirstRand Group
Source: The Africa Report, 2011 ranking; *2009 Results
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Financial services: Insurance
Wafa Assurance
RMA Wataniya
Key characteristics of the African markets
•
•
•
Sector to build on the continent: currently 1% of the global
market, dominated by Life-Insurance
Developing Market in South Africa, Algeria, Morocco, Tunisia
and Egypt
Success of microinsurance: 2.6% of the African population
living with less than $2 a day has micro-insurance; potential
market of 700 million people
Largest insurance companies in Africa
Company
Country
Sanlam
South Africa
Old Mutual Life Assurance Co.
South Africa
Liberty Group
South Africa
Santam
South Africa
Momentum Group
South Africa
Discovery Health
South Africa
Mutual & Federal Insurance
South Africa
RMB Holdings
South Africa
Zurich Insurance Co. South Africa
South Africa
African Reinsurance Corp.
Nigeria
Soc. Sec. And Nat. Insurance Trust
Ghana
Wafa Assurance
Morocco
Soc. Sec. And Nat. Insurance Trust
African Reinsurance Corp.
Liberty Group
Mutual & Federal Insurance
Momentum
Group
Zurich Insurance Co
Source: The Africa Report, 2011 ranking; *2009 Results
RMA Wataniya
RMB Holdings
Morocco
Sanlam
Old Mutual Life Assurance Co.
Discovery Health
Santam
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Agribusiness in Africa
Cevital
Key characteristics of the African markets
Egyptian Sugar and Int.
Industries Co.
Centrale laitière
Cie Sucrière
Marocaine
de raffinage
•
Part of Agriculture in African GDP : 17%
•
Agriculture and food production in central
Africa could see Africa becoming the world’s
food basket
•
Small amount of arable land is cultivated:
27% of the world’s unexploited land in
Africa – significant growth potential
•
Limited automation and insufficient use of
irrigation and fertilisers keep land
productivity low
•
New development of large scale commercial
farming in Ethiopia, Tanzania, Mozambique,
Sudan and Senegal
SIFCA
Cargill West Africa
Nestlé Nigeria
Dangote Sugar Refinery
Olam Nigeria
Flour Mills Nigeria
Coastal countries with large areas of uncultivated cropland
Anglovaal Industries
Afgri
Pioneer Foods Group
Oceana Group
200 m$ < income < 500 m$
500 m$ < income < 1 bn $
1 bn $ < income < 3 bn $
Astral Foods
Tongaat-Hulett Group
Tiger Brands
Landlocked countries with large areas of uncultivated
cropland
Land-constrained countries with adequate water
Land-constrained countries with little water
Clover Holdings
Illovo Sugars
Rainbow Chicken
Countries with developed agriculture
Source: Harmonized World Soil Database; FAOSTAT; McKinsey Global Institute analysis
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Infrastructure
Suez Canal Authority
Al Ezz Dekheila Steel Co.
Orascom Construction
Holding Ynna
Egyptair Airlines
Royal Air Maroc
Key characteristics of the African markets
El Sewedy Cables
Ezz Steel Co.
The Arab Contractors
• Infrastructure annual needs around
USD 93 billion (15% of GDP)– financing
gap of USD 21 billion per year.
• Rising number of projects of each
infrastructure type
• Large number of renewables projects in
south and north
• Rapid urbanization straining infrastructure.
• Emerging countries, notably China, active in
this area – offering finance as part of
bilateral development agreements
1 bn$ < income < 3 bn $
3 bn $ < income < 5 bn $
5 bn $ < income
Allied Technologies
Grinaker-LTA
g
Group Five Holdings
a b
Wilson Bayly Holmes-OVCON
Reunert
d
c
f
e
a : South African Airways
b : Transnet Freight Rail
c : Allied Electronics Corp.
d : Grindrod
e : Arcelor Mittal South Africa
f : Murray & Roberts Holdings
g : Transnet
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Electricity
Société nationale de
l’électricité et du gaz
Shariket Kahraba Hadjret Ennous
Key characteristics of the African markets
ONE
Société tunisienne de
l’électricité et du gaz
Lyonnaise des eaux
Jorf Lasfar
Energy Co.
• Huge gap between cities and
hinterlands.
• 3% of the global electricity consumed
in Africa
Société nationale
d’électricité
• Obsolete infrastructure – more than
40 year-old and 25% out of services.
• All the resources available – coal,
biomass, geothermal energy, gas…
Énergie du Mali
Cie ivoirienne d’électricité
Volta River Authority
AES African Power Co.
Kenya power and lighting
Société d’énergie et
d’eau du Gabon
income < 500 m $
500 m $ < income < 1 bn $
1 bn$ < income < 3 bn $
3 bn $ < income
Namibian Power Corp.
Hidroelectrica de
Cahora Bassa
Eskom
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PwC Africa clients
The case is clear.
The question is how,
how much and how
sustainably…
will the
people of Africa benefit?
May 2014
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Talent, Innovation and
Entrepreneurship:
Our incubation network
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Africa Incubation Partnership Project
•
Five organisations have collaborated to develop the project model
-
Wesgro
-
PwC
-
The Bandwidth Barn
-
Department of Economic Development and Tourism
-
City of Cape Town
•
Members of the project team have visited facilities in Ghana and Nigeria, with very positive
feedback. Success in the initial phase will lead to further locations added to the exchange
programme
•
The project team are finalising the partnership model and agreements and will look to have the first
businesses using the platform in the coming months
African Incubation Partnership Project
The African Incubation Partnership seeks to leverage these existing
networks to further the goals of growth and development, whilst also
introducing a platform that facilitates physical access to different regions
for SMMEs.
Incubators and similar organisations facilitate a ‘soft landing’ for SMMEs
into markets across Africa. Businesses and entrepreneurs will have access
to working space at the facilities (‘hot desks’) whilst having closer access to
the local business eco-system.
The project is aimed at facilitating intra-African trade and opening up
market opportunities for African business, whilst also developing
incubation expertise and best practice across the continent .
Concluding remarks – key takeaways
should be on the radar for companies with aggressive
1. Africa
growth agendas and PE firms looking for new opportunities to
invest.
2. Deals in emerging markets are complicated, different and
complex.
3. Successful deals can be made.
20
The Danger of a single story
Chinamanda Ngozi Adichie
TED.com
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