A i Q C a p i t a l M a n a g e m e n t L i m i t e d

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1 A i Q C a p i t a l M a n a g e m e n t L i m i t e d

2 NIGERIA Nigeria is a middle income, mixed economy and emerging market with expanding financial, service, communications, and entertainment sectors GDP of $247 billion in 2011 GDP growth of 7% in 2011, driven by non oil production activities GDP per capita of about $1,600 GDP by sector: Agriculture: 40%; Services: 30%; Manufacturing: 15%; Oil: 14% (2012 est.) Labour force million Labour force by occupation: Services: 32%; Agriculture: 30%; Manufacturing: 11%

3 INVESTORS KEEP COMING NIGERIA Alluring returns in the high risk frontier market Huge and growing population with latent potential for consumer boom 12th largest oil producer, 4 largest exporter because its light crude oil is ideal for making motor fuel Huge gas reserves ideal for power generation and domestic use Economy with 160m population. Annual GDP growth of 7%, in league with India, China and Indonesia Urban population growth of 4%, or nearly 4m per year An economy poised to be the largest in the whole of Africa Nigeria s GDP is over 60% of combined GDP of West African countries.

4 Infrastructure Demand, Development and Economic Opportunities $100bn is estimated to be needed over the next 10 years in just 4 basic infrastructure areas: Road, Power, Rail Track, and Oil and Gas. ROAD Total road network in Nigeria stands at 194,800km, of which a large chunk is in a very bad state. About N300bn ($1.875 bn) would be required to bring the roads to a satisfactory condition The current minister for works inherited 168 projects with N1Trillion ($6.25 bn) cost outlay, and needs to prioritize due to scarcity of funds. On government s priority list are all roads leading to seaports, refineries, the major arterial roads, and major dual carriage ways POWER Current electricity generation capacity is about 6,000 megawatt (mw), far below total national demand of 10,000 mw. Progress is being made in the power sector with power generation at 4,203 mw, with plans to generate 5,000 mw by end of the year. Diesel price drops on the back of improved power supply.

5 Infrastructure Demand, Development and Economic Opportunities TELECOMS Nigeria s vibrant telecoms sector still has huge openings for investors. CAPCOM investment in CDMA sector, is to create a single national long term evolution (LTE) broadband operator with 20MHz of bandwidth in the 1900MHz frequency range, with customer base of 2,500,000 from an existing customer 2012 base of 160,000 data customers by A survey by MTN reveals that over 850 villages have never had access to any form of telecoms services Telcos target $1bn mobile added services market to drive revenue. The subsector remains largely untapped, and voice based average revenue per user declines. HEALTH CARE Nigeria loses $500m annually to medical tourism. About $6.25 billion per annum flow through private health expenditure. In 2011 alone, about 20,000 Nigerians were in India purely for medical care, with each spending about $30,000 and above on transportation, hotel accommodation, feeding and hospital bills. A heart bypass operation costs approximately $8,500 in India 63% of the health expenditure that is privately financed, 95% is funded out of pocket Hospital bed density in Nigeria is 0.53 beds per 1,000 population (2004 est) AiQ CAPITAL MANAGEMENT LIMITED

6 Infrastructure Demand, Development and Economic Opportunities HOUSING 70% of Nigeria s 150m people lack decent quality urban life. Over 80% of market transactions are rentals. Housing in Nigeria is estimated to be 2.3 per 1000 inhabitants Nigeria has only 10.7 million housing stock, 10% home ownership level, about 5.5% annual urbanization rate, and a staggering 16 million housing units deficit. The only country where a house seeker may have N5.6m ($35,000), yet cant present such as down payment for decent accommodation. Middle class property starts from N20m ($125,000) Renaissance group set for over $1bn residential and commercial investments in Nigeria

7 Infrastructure Demand, Development and Economic Opportunities RETAIL Expanding markets of Nigeria attributed to growing middle class earning between N75,000 and N100,000 ($469 and $625), accounting about 23% of national population. Average income per annum of this group is between N1m and N1.2m ($6,250and $7,500) Survey by Neilsen, provider of information and insights into consumers behaviour, 37% of total monthly household spending of Nigerian consumers go into food, personal care, and household products, as they often prefer tested products that are affordable and easily available. Spending patterns in Nigeria are influenced by traditions, family and the desire to maintain high standards IFC invests $124m (N20bn) in Persianas Group. Shoprite to build 700 stores up from 2 in Nigeria Whitey Basson, CEO of SA s Shoprite said in February that even if 60% live in poverty, the other 40% still outnumber SA

8 Infrastructure Demand, Development and Economic Opportunities AGRICULTURE Per sector contribution to GDP is 40% About 68 million hectares (75%) of total land has potential for agricultural activity, but only 33 m is being cultivated 88% of non oil earnings. 90% of output is from small scale farmers Ranks first in Africa in farm output but suffers from extreme low productivity, reflecting reliance on limited application of modern technologies and low skill base, aging farming population, poor credit delivery, poorly developed markets, etc Nigeria spent N544bn ($3.4bn) on sugar importation in 10 years. 97% of total sugar supply in the last 10 years was imported. Nigeria requires 910,000 metric tonnes of consumable sugar per annum Nigeria consumes 1,240 metric tonnes of palm oil, produces 850 metric tonnes and imports 390 metric tonnes N1 bn spent daily importing rice into Nigeria Nigeria partners China Exim Bank to import 100 large-scale integrated rice mills of 2.1m metric tonnes each through private sector to improve quality of local rice products

9 Infrastructure Demand, Development and Economic Opportunities TRAVEL AND TOURISM Direct contribution of travel and tourism to Nigeria s GDP in 2011 was N598.6billion ($3.4bn)- 1.6% of GDP World Travel and Tourism Council (WTTC) forecasts N664.6billion ($4.154bn) in 2012, a 11% increase. This economic activity is generated by industries such as hotels, travel agents, airlines, other passenger transportation services, restaurants, and leisure industries directly supported by tourists WTTC projects that the direct contribution of travel and tourism to GDP is expected to grow by 6.3% per annum to N1,223.8 trillion ($7.65bn) - 1.8% GDP)

10 Infrastructure Demand, Development and Economic Opportunities HOSPITALITY The hospitality industry has witnesses phenomenal growth in investment. It is indicative of improved economic climate that supports both investment and commerce The cities of Lagos, Abuja and Port Harcourt play host to several international brands. There are few international brands, but several mom and pop hotels in other cities of Nigeria. For all operators, returns have been tremendous, with occupancy rates of 70% and above There are several hotels are in the pipeline. In Lagos alone, 700 to 1,000 rooms looks to be introduced in the next 24 to 36 months Lagos is the second most expensive destination in the world according to Hogg Robinson Group (HRG) The hospitality industry has defied simple rules of economics

11 Infrastructure Demand, Development and Economic Opportunities POTABLE WATER In a WHO/UNICEF joint monitoring program report for 1990 to 2010, 66 million Nigerians lacked access to drinking water, while 34 million, about 20% of the nation s population practiced open defecation Of the total number of people living in urban and semi urban areas, about 48% have access to potable water; in rural areas, only 39% have access. Of 85 million people living in urban and semi urban areas, less than half are reported to have reasonable access to reliable water supply Where available, its in critical short supply, unreliable, and of low quality

12 The opportunities in Nigeria are tremendous Y O U A R E W E L C O M E T O I N V E S T I N N I G E R I A Thank You