Africa Economic Outlook - Insights Shaping your Industry in 2014

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Information about Africa Economic Outlook - Insights Shaping your Industry in 2014
Business & Mgmt

Published on February 26, 2014

Author: FrostandSullivan



This webinar will elaborate on the global analyst briefing, "Global Economic Outlook 2014" and further provide in-depth insights of the current economic state, as well as challenges and opportunities on the African continent. Industry sectors that will be covered include: Chemicals Materials and Food, Information and Communication Technologies as well as certain Industrial sectors, such as Energy and Environment.

In order to take advantage of the untapped potential in these markets, businesses will need to consider the role that the growth dynamics in these economies will play in shaping strategic plans for 2014 and beyond.

An overview of sectors facing the biggest challenges and those that are ripe with opportunities for growth and expansion into Africa will also be discussed.

Why You Should Attend:

• Understand key hotspots driving growth in 2014
• Identify how the current economic state will affect your industry
• Learn from best practices and successful case studies to take advantage of growth opportunities in 2014

Click the below link to access the on-demand recording.

Africa Economic Outlook INSIGHTS SHAPING YOUR INDUSTRY IN 2014 20 February 2014 © 2014 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

AFRICA ECONOMIC OUTLOOK: INSIGHTS SHAPING YOUR INDUSTRY IN 2014 PRESENTERS Mani James Craig Parker Cornelis Van Der Waal Kholofelo Dzvukamanja Ian Duvenage Operations Manager Senior Economic Business Unit Programme Head of ICT, Africa Consultant Leader, Energy and Power Manager, Chemicals, Materials Systems and Food WEBINAR

Global Overview and Trends Mani James Operations Manager 3

African Growth Outlook Global Mega Trends and its Relevance What is a Mega Trend? Mega Trends are transformative, global forces that define the future world with their far reaching impact on business, societies, economies, cultures and personal lives. Urbanisation – City as a Customer Bricks and Clicks Future Infrastructure Development Smart is the New Green Innovating to Zero Health, Welln ess and Well Being Social Trends New Business Models: Value for Many Future of Mobility Connectivity and Convergence Beyond BRIC: The Next Game Changers 4

African Growth Outlook Mega Trends that will Impact Africa Urbanisation High The Middle Bulge Degree of Impact on African Economy Regional Integration Invest Africa Connecting the Unconnected Renewable Power Infrastructure Development Responsible Revolution “Value for Many” Business Model M-Health Space Jam Innovation to Zero Devices Low E-Governance Low Degree of Certainty Note: The size of the bubble represents the scale of opportunity within each Mega Trend The Mega Trends have been plotted based on quantitative and qualitative reasoning High Source: Frost & Sullivan. 5

African Growth Outlook Outlook and Implications for Global Growth GDP Growth Prospects for 2014 7.0 6.3 6.5 6.0 6.0 5.4 5.0 GDP Growth (%) 5.0 5.0 3.8 4.0 3.1 3.0 2.7 3.1 2.7 2.3 2.3 2.1 2.0 1.3 1.0 0.0 0.0 European Union Central and Eastern Europe Developing Asia ASEAN-5 2013 Latin America and Middle East and the Caribbean North Africa Sub-Saharan Africa United States 2014 Note: Developing Asia composed of 29 countries including China. ASEAN-5 comprises Indonesia, Malaysia, Philippines, Thailand, and Vietnam. Sources: IMF and Frost & Sullivan 6

African Growth Outlook African Growth Predictions – Key Sectors Manufacturing: $130 billion Manufacturing, food packaging and fortification. Infrastructure Development: >US$500 billion Transport infrastructure and rehabilitation, housing, ICT, building and other materials, construction and PPE Africa – The Summary Energy: $450 billion Electricity infrastructure, renewable energy, rehabilitation of existing structures Agriculture: US$120 billion Includes fertilisers, crop protection, animal health, feed and additive products, and plant biotechnology. Oil & Gas: US$300 billion Infrastructure, extraction chemicals, and rehabilitation Water: US$250 billion Includes sanitation, water infrastructure and chemicals, renewable water, and water and wastewater treatment. 7

African Growth Outlook Global Growth Predictions for 2014 • Virtual Currency • Big Data gets bigger • Wearable Devices • Last Mile Innovation – Shipping Wars • Circular Economy • 3D Printing • “ME” Commerce • “APPS” Power • Health-Centric Devices & Digital Health 8

African Economic Outlook Craig Parker Senior Economic Consultant 9

African Growth Outlook Fixed Investment to Drive Growth in Emerging Economies FDI Inflow into Africa Is Expected to Double in the Next 7 Years 2013 56.5bn 2001 36.8bn 19.1bn 2006 Sources: World Bank, United Nations and Frost & Sullivan 10

African Economic Outlook Risk Factors to African Growth in 2014 Net Portfolio Investment Flows, Developing Asia, Latin America and Sub-Saharan Africa, 2012 and 2013 • Dependence on oil and commodity prices 120.00 107.256 Net Portfolio Flow ($ Billion) 100.00 • Capital flight vulnerability 80.00 60.00 40.00 • Export markets and high dependence on Asia 38.801 38.457 31.445 20.00 9.677 0.00 -0.113 • Macroeconomic instability -20.00 Developing Asia Latin America and Sub-Saharan Africa the Caribbean 2012 2013 • Political instability Sources: International Monetary Fund and Frost & Sullivan 11

African Economic Outlook Drivers of Growth in 2014 Countries with High Growth and Investment Potential in Sub-Saharan Africa, 2013-2015 • Expansion of construction and infrastructure investment Africa to Average 4.8% GDP Growth in 2013 Ethiopia • Agri-processing Nigeria Kenya Ghana Gabon DRC Zambia Mozambique South Africa Note: Countries based on score determined from weighted average of per capita GDP and potential growth, GDP & GDP potential growth, FDI stock and growth, political stability, export and import growth potential, and population size and population growth potential • Retail and investment into new malls • Policy certainty Source: Frost & Sullivan 12

Energy & Power Cornelis Van Der Waal Business Unit Leader, Energy and Power Systems 13

African Economic Outlook Energy and Power - Growth Drivers in 2014 Key Growth Drivers • Signing of Oil & Gas agreements • Public-Private Partnerships • Commissioning of Mega-Projects PPP Activity Oil & Gas Chase / Agreements • Regional Projects Mega Projects 14

African Economic Outlook Energy and Power – Investments are Happening Installed Capacity 68 GW 2014 90 GW + 2020 Confirmed Oil and Gas Reserves 19 7 2000 2014 15

African Economic Outlook Energy and Power – Predictions for 2014 Opportunity Map • Increased competition • Partnership opportunities • Project and products diversification Key Countries to Watch in 2014 Key Countries to Watch till 2024 • Sustainable green projects 16

Chemicals Kholofelo Dzvukamanja Programme Manager, Chemicals, Mat erials and Food 17

Africa Economic Outlook Increasing Urbanisation and Infrastructure Development • Mature South African market? • Economic diversification? Increasing Urbanisation Infrastructure Development Countries with High Growth and Investment Potential in SubSaharan Africa for Selected Chemicals Markets, 2013-2015 • Sectors driving demand growth for chemicals • Oil and Gas Development and Mining • Construction and Infrastructure Projects DRC • Other Growth Areas • Agriculture Note: Countries based on score determined from weighted average of per capita GDP and potential growth, GDP & GDP potential growth, FDI stock and growth, political stability, export and import growth potential, and population size and population growth potential • Consumer Products Sources: IMF and Frost & Sullivan 18

Africa Economic Outlook Long Term Outlook is Positive For 2014 Sector developments Sector Oil and Gas • Development of new gas deposits in Mozambique,- largest discovery globally in the last decade • Key countries: Nigeria, Libya, Algeria, Angola , Sudan , Egypt • New discoveries: Mozambique, Ghana, Tanzania, Kenya • Angola new refinery by 2018 – planned output 200 thousand barrels per day Mining • South African outlook still unstable in the short to medium term • New technologies to extend mine lifespan, increase operation efficiencies • Recovering global economy supports commodity prices Construction and Infrastructure • Providing products and expertise to key projects across the continents • Slowed growth in South Africa • Increased investment into local manufacturing of inputs Agriculture • Accounts for 15 % of the continent‟s total GDP • Largest cocoa producer Cote d‟Ivoire; Ghana and Ethiopia amongst key growth countries • Highly fragmented production, Low penetration of crop protection and fertiliser products Consumer Products Overall Attractiveness • Relatively small manufacturing base • Fast growing middle income population group Low Medium High 19

Africa Economic Outlook New Market Expansion by Sector Summary of Key Market Growth Opportunities across Sectors, SSA, 2014 Water Infrastructure & Treatment US$22 billion required to upgrade Africa‟s water infrastructure DRC Paints and Coatings >US $2 billion Manufacturing US$130 billion • New market focus • Selection of industry specific new growth markets • Innovation – products, services, operating models • Strategic customer focus • Leverage technology Crop Protection > US$2 billion Fertilisers >US$5 billion Infrastructure US$ 500 billion Oil & Gas US$130 billion investment opportunity in infrastructure Source: Frost & Sullivan 20

Information and Communication Technologies Ian Duvenage Head of ICT, Africa 21

Africa Economic Outlook ICT - Nexus of Cloud Computing, Big Data, Mobility and the Internet of Things 2 Cloud allowing access to content on any device in any location. Big data enables value to be of Cloud extracted out of 1 Rise Big Data and exponential increase in data. Ubiquitous Wireless WiFi, 3G & LTE becoming standard connectivity modes. Industry Verticals 3 Rise of Apps 4 Internet of Things Cloud and mobility driving the emergence of apps which can be used on any IP enabled device. IPv6 driving proliferation of IT enabled sensors/devices across industry-specific activities. 22

Africa Economic Outlook ICT – Big Data Gets Bigger The Big Data value chain begins with initial data collection, continues through data management and processing, and then proceeds to end-user application. Acquisition Communications Providers Management Storage Vendors Processing Computing Power Vendors Application End Users Analytics Application Developers Integrated Platform Source: Frost & Sullivan 23

Africa Economic Outlook ICT - Emerging Healthcare Opportunities & M-Health Total Healthcare Market: Emerging Healthcare Opportunities, 2012–2015 • Analysis & Content Management Preventive healthcare and wellness monitoring • Stock Management Mobile healthcare EMR/EHR Biosimilars vaccines Robotic surgery • Demand Generation Growth Traditional pharmaceuticals Silver industry equipment (home care) Molecular diagnostics • Mobile Monitoring MIS Hospital services Telemedicine • Partnership opportunities in Mobile Healthcare Digital imaging • Wireless Health Broker & Service Provider Innovation Trigger Super Growth Normalisation Time Leadership Source: Frost & Sullivan analysis. 24

Key Success Factors for Africa & Strategic Questions Mani James Operations Manager 25

Africa Economic Outlook Key Success Factors for Africa – What has Worked ? Robust country and regional strategy Trusted brand & loyalty Strong local presence Direct Consumer approach is key – absolute must have Key Success Factors Affordable Pricing and Promotion targeting the middle class Focus on maintaining key cash cow products in the broad range Position the global quality brand in the market Strong local partnerships Strengthen the ecommerce platforms 26

Africa Economic Outlook Case Study of GSK’s Story in Africa Brief description: Headquartered in the UK, GSK are a global pharmaceutical organisation Markets served: Public and Private pharmaceutical markets, NGO‟s Geographical footprint in Africa: Offices in Algeria, Morocco, Kenya, Ghana, Nigeria, South Africa Product range (Pharmaceuticals): Prescription medicines, vaccines, and consumer healthcare ` Success factors: • Physical presence in key geographies • Charitable grants and low margin product strategy • Extensive product portfolio • Affordable pricing • Robust brand equity • GSK ASPEN distribution agreements 27

Africa Economic Outlook What Are the Strategic Questions You Need to Consider? Regional and country strategies – What is your strategy & why ? More global companies locating to Africa – How do you defend your turf ? Consumer focus – Customer„s customer – Do you know the need ? Customised solutions – Are you ready and capable ? Strategic Questions for Africa Distribution Strategy – How strong are your partnerships ? Physical Proximity – Are to your customer ? Product Porfolio differentiation – How do you differentiate ? Tough infrastrucure and regulatory framework – How do you navigate ? 28

Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities 29

Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. 30

Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter 31

For Additional Information Mani James Regional Director for Africa +27 (0)21 680 3208 Cornelis van der Waal Business Unit Leader for Energy & Environment +27 (0)21 680 3266 Vassilissa Kozoulina Sales Director for Africa +27 (0)21 680 3279 Samantha James Corporate Communications +27 (0)21 680 3574 32

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