The Global Markets Opportunity in Sub- Saharan Africa 17 November
Emerging Markets to be dominant force in the long-term Emerging Markets share of World Percent, -2030 Compound annual real GDP growth % constant exchange rates, 2000-2020 2030 Emerging Asia 10.6 59% 55% sub-saharan Africa 8.0 49% 44% Middle East 7.7 37% 31% Central and Eastern Europe 6.3 World 5.8 European Union 3.8 GDP Market Cap Source: IMF, MSCI, Goldmann Sachs, Global ECS Research Estimates, Mckinsey MGI 2
African governments have improved macroeconomic stability Inflation % per annum 22 Government debt % of GDP 82 Budget balance % of GDP -28% -64% 59-2 8-61% 1990s 2000s 1990s 2000s -5 1990s 2000s Source: World Bank World Development Indicators; Political Risk Services; McKinsey Global Institute 3
Africa is poised for growth Low global interest rates Increased trade flows into Africa Growth in EM going forward Interest rates % Egypt 8.3% SA 6.5% Australia 4.8% EU 1.0% UK 0.5% USA 0.3% Composition of African trade by trading partners %, 1990-2008 Actual trade 100 USD bn Other 45 75 North America Western Europe 108 196 + = 50 25 0 1990 2000 2008 Latin America Middle East Intra Africa Asia 33 41 81 198 Global banking revenues before cost of risk. %, total in USD bn Emerging Markets Japan Western Europe North America 3,261 23 9 28 40 2005 3,537 34 6 25 35 E 4,298 40 5 24 31 2012F 50% of total trade is south-south Most of growth in global banking revenues to come from EM Source: International Monetary Fund Direction of Trade Statistics; McKinsey Global 29 September (McKinsey Global Banking Pools) 4
Corporates in SA are increasing their activities in Africa There is growing revenue and SA company presence in rest of Africa Total Revenues generated in Africa ZAR bn, 91.0 58.0 33.0 67.4 8.0 59.4 58.4 20.1 38.4 Rest of Africa Revenue SA Revenue 49.8 9.6 40.2* 14 countries 16 countries 15 countries 17 countries The African market proved to be a market with great potential for growth [..] SAA will be looking to increasing its market share on the continent [..] considering opportunities in Central and Western Africa, mainly through partnerships -SAA CEO Siza Mzimela Source: International Monetary Fund Direction of Trade Statistics; McKinsey Global 29 September (McKinsey Global Banking Pools), Company Annual Reports, Engineering News *Only banking revenue excludes Liberty Holdings 5
Prominent increase in international interest in Africa Strong M&A activity Consistent capital inflows 2007 2008 ICBC Standard Bank $5.6B Bain Capital Edcon $5.6B Foreign direct investment, net inflows into SSA excluding RSA USD bn 30 20 10 +16% 2011 Bharti - MTN $24B NTT- Dimension Data $3.2B Wal-mart - Massmart $4.7B HSBC Nebank $6B 0 1989 1992 1995 1998 2001 2004 2007 In the race for Africa, companies from the U.S., China, Japan and the U.K. are scrambling to buy the continent s best assets, tapping into its growth potential and its 1 billion people in a world where returns from developed nations are faltering Bloomberg Sep Source: International Monetary Fund Direction of Trade Statistics; McKinsey Global 29 September (McKinsey Global Banking Pools), Bloomberg 6
Significant banking pools in Nigeria and Angola Revenue by the top 15 SSA countries (excl SA) USD Billion, (Rev in brackets) 100% = USD 30bn 36% Nigeria* (10.7) Barclays presence Absa presence Rest (4.3) 14% Namibia (0.5) 2% Botswana (0.5) 2% Mozambique (0.6) 2% Uganda (0.7) 2% 2% Cameroon (0.7) 3% Zambia (0.8) 3% Ethiopia (0.9) 3% Cote d Iviore (0.8) 3% 3% Mauritius (0.9) Zimbabwe (1.0) * Barclays Wealth office; Absa Capital rep office to be operational before end Oct Source: Oliver Wyman, The African Banking Industry, September Seychelles Mauritius 6% 4% 4% Ghana (1.3) Tanzania (1.1) 11% Kenya (1.9) Angola (3.2) 7
Sub-Saharan Africa a top priority for Barclays I mean, Africa is incredible. in the first decade of this century, Africa had the third highest rate of GDP growth Clinton Global Initiative, 24 Sept It s collective GDP of USD 1.6 trillion equals that of Brazil and Russia and consumer spending is growing at more than twice the rate of that in OECD countries. Bank of America/Merrill Lynch Conference, 29 Sept Finally, in Absa, we have a leading franchise in one of the fastest growing markets globally and the opportunity to be a leading player throughout Africa Barclays Capital Financial Services Conference, 13 Sept We wouldn t be doing what we re doing today in Africa if we were in this for the short run. Clinton Global Initiative, 24 Sept [But] maybe the most exciting opportunity for Barclays is in Africa Bank of America/Merrill Lynch Conference, 29 Sept We ve been around for 320 years, and if we want to be meaningful in Africa, we have to be investing for the long term Clinton Global Initiative, 24 Sept 8
Sub-Saharan Africa is central to Absa Capital s strategy GEMS SSA Note (9 African Currencies) USD 5mio Launch trade Mar No. 1 Overall Bank Equity Products Overall Currency Overall Interest Rate Options Currency Options Currency Forwards Exotic Equity Options SA OTC Single Stock Options Exchange Traded Funds Best Bank in Africa Best Bank in Botswana Best Bank in South Africa Best Bank in Zambia Best Bank in Kenya 2008 Best Bond House Best Research House Best Fixed Income House Best Sales and Structuring Cash Bonds Best Inflation Team Best OTC Interest Rates Derivatives: Market Making Sales and Structuring Best Interest Rate Research Team: Quantitative Research General FIC Research Credit Research Best Broking Team: Listed Interest Rate Derivatives Listed Currency Derivatives Barclays Bank Zambia Note ZMK 50bn 7 year Jun FX-linked notes BWP, EGP, GHS, KES, MUR, NGN, TZS, UGX, ZMK Best Global Bank in Africa Cervejas de Mocambique MZM1.43bn Term Loan Facility Joint Mandated Lead Arrangers and Bookrunners February MTN Uganda USD150m Syndicated Medium Term Loan Programme and Revolving Facility Global Coordinator September Safaricom Kenya KES12bn Medium Term Note Programme Mandated Lead Arranger October RSA Credit linked Note USD 25M 1 year Feb 09 African Banking Achievement Awards Best Debt house Best Bank in Supply Chain in Middle East and Africa 2008 9