Commodity Situation in Africa

Is Global Commodity Scarcity

Leading to Deficiency in the

African Context?

Content Intro - Macro Africa

African Commodity Landscape

Energy Commodities

Mining Commodities

Agriculture Commodities

Energy Trends

Case Study - Country Nigeria

Conclusion: Scarcity? Deficiency?

About Transformanz

Macro Africa

Second fastest growing

population in the world

7 from10 fastest growing countries worldwide are in Africa

Largest reserves of the world‘s

natural resource-base is in

Africa. <2/3 – researched

Lowest per Capita income

world-wide BUT with a

growing middle-class

Source: UN Population Statistics, Transformanz Research Source: IMF, Transformanz Research

Source: IMF, Transformanz Research Source: US Geological Survey, Transformanz Research

Growing population,

Fast economic growth,

Growing middle-class,

Growing urbanization.....

WHAT IS THE IMPLICATION TO

ENERGY, MINERAL &

AGRICULTURAL COMMODITIES?

African Growth & Impact on Commodities

Source: Mckinsey Global Institute

African Commodity Landscape – Proved Reserves 2010

Oil - 17.4 trillion tonnes

9.5% of world reserves

Gas – 14.7 trillion m³

8% of world reserves

Coal – 31.6 trillion tonnes

4% of world reserves

Copper

Zambia – 3.5% of world reserves

Diamond

DRC – 25.9% of world reserves

Botswana – 22.4% of world reserves

Gold

SA – 12.8% of world reserves

Ghana – 3.4% of world reserves

Nickel

Botswana – 6,3% of world reserves

Cobalt

DRC – 51.5% of world reserves

Zambia – 4.1% of world reserves

Manganese

Gabon – 9.6% of world

reserves

Platinium

SA – 88.7% of world reserves

Cocao

Cote I‘Ivoire – 34,4% of world‘s production

Ghana – 17.5% of world‘s Production

Ethiopia

Cote I‘Ivoire – 2.3% of world‘s production

Uganda – 17.5% of world‘s production

Tea

Kenya – 8% of world‘s tea production

Top African Energy Reserves Top African Mineral Reserves Top African Agricultural Production

Energy Commodities – Oil Trends

Demand world-

wide is growing at

a CAGR of 6% and

supply 3%.

Is there a scarcity

leading to

deficiency?

What is the impact

of emerging Asia?

Source: BP Energy Statistics, Transformanz Research

10 Years CAGR - Resrves

-World 4%

-Africa 5%

Energy Commodities – Natural Gas Trends

Source: BP Energy Statistics, Transformanz Research

Is there a scarcity?

What happens if

highest consumers

would rationalise?

10 Years CAGR - Resrves

-World 2%

-Africa 2%

Energy Commodities – Coal Trends

Source: BP Energy Statistics, Transformanz Research

Source: Shell Scenario, Transformanz Research

Scenario - What happens by 2050?

Global Proved Coal Reserves 2010 = 861 trillion tonnes!!!

Do really believe in Scarcity? If yes, are there alternatives?

Energy Sources

Energy Consumption

Case Study Nigeria

Overview

• Largest Population in Africa ca. 160m

• Ca. 48% of the population leaving in cities

• 10th fastest growing Economy worldwide real

GDP = 6.9%

• GDP per Capita ca. USD 1,410

• Total Debt as % of GDP = 2%

• Politically stable – room for improvement

• Corruption but improving governance

Oil & Gas Land (based on 2011)

• Second largest crude oil producer in Africa

• Consumption = ca 0.3 million barrels per day

• Production = ca. 2.4 million barrels per day

• Export = 2.2 million barrels per day

• Local supply deficit = 0.1 million barrels per

day

• Proven oil Reserves = 37 billion barrels

Importers

• USA 43%

• EU 20%

• India 14%

• Others 23%

Top Oil players in Nigeria

Guess which ones are local

companies!!!

Conclusion

Scarcity ?

• Are MNCs creating unnecessary panic?

• Are there reserves & enough substitutes ?

• Sources

Deficiency in Africa

• Impact MNCs on Africa!

• Consumption in industrialised countries!

• Poor infrastructure & poor governance

• Africa owns the highest reserves of resources

• Need of education, infrastucture and good governance

• Investors should look beyond commodities and focus on

sustainable investments

• Africa needs to be treated as equal trading partner.

Scarcity is Questionable & Deficiency is Manageable

Who we are

Transformanz is a leading provider of business intelligence on Sub-Saharan Africa

(SSA). We conduct independent research, perform objective analysis and opinions to

inform operational and strategic decision making on SSA Markets.

What we do

• Strategic Intelligence

• Market intelligence

• Investment Research

• Transaction Support

Benefits

• You gain access to new markets and support from African experts

• You save resources spent on research and analysis

• You make informed decisions based on reliable and trusted insights

• Information provided is simple, logical and based on best practice approaches

About Transformanz

Thank-You

Roland Nwancha

Managing Director

r.nwancha@transformanz.com

www.transformanz.com

Transformanz GmbH African Business & Investment Research

Birkenau 23

D-81543 Munich

"Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a life time".

Chinese Taoist Philosopher, Lao Tzu. c. 600 B.C.E