RENAISSANCE CAPITAL FRONTIER, EMERGING AND CONVERGING MARKETS. The emerging markets investment firm

RENAISSANCE CAPITAL FRONTIER, EMERGING AND CONVERGING MARKETS The emerging markets investment firm

GDP GROWTH KNOWS NO RELIGIOUS, ETHNIC, CLIMATE OR CONTINENTAL BARRIERS 30,000 Catching up is a global phenomenon - per capita GDP since 1820 25,000 United Kingdom France 20,000 Germany United States 15,000 Argentina Chile 10,000 Japan 5,000 South Korea Thailand 0 1 1820 1825 1830 1835 1840 1845 1850 1855 1860 1865 1870 1875 1880 1885 1890 1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 Singapore India 2

YET 10 AFRICAN COUNTRIES ACHIEVED AT LEAST 7% GROWTH SINCE 2000 (ENOUGH TO DOUBLE GDP IN A DECADE) 16.0 Over 2003-12 - each of these grew by an average 7.0% 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 The emerging markets investment firm 3

WHY NOW? The emerging markets investment firm 4

CUTTING AFRICAN DEBT IN HALF 140 120 SSA G-7 Public debt as % of GDP 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F The emerging markets investment firm 5

BANKING STILL HAS ROOM TO BOOM 220 200 180 160 Private sector debt in 2011 (household and corporate) as % of GDP (Source, IMF) High debt in rich countries and... China 140 120 (% of GDP) 100 80 African countries have low debt levels 60 40 20 0 The emerging markets investment firm 6

THE RISE OF FOREIGN DIRECT INVESTMENT BEGAN BEFORE CHINA 4.0 FDI into Africa (% GDP) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Africa (LHS) 7

ACTUALLY MOST GROWTH HAS COME FROM SERVICES Sector share of change in real GDP, 2002-2009 0 10 20 30 40 50 60 Services 53 Agriculture 16 Mining and quarrying 14 Construction 8 Manufacturing 7 Gas, electricity and water 1 The emerging markets investment firm 8

EASE OF DOING BUSINESS REFORMS DAYS TO START A BUSINESS (WB, 2014) 180 2004 2014 160 140 120 100 80 60 40 20 0 Venezuela Eq Guinea Brazil Congo, Rep Zimbabwe Eritrea Angola Namibia Chad Botswana Gabon Malawi Swaziland Sudan China Kenya Uganda DRC Lesotho Nigeria Gambia, The India Tanzania Algeria CAR Pakistan SA Djibouti Guinea Cameroon Ethiopia Russia Germany Ghana Greece Mozambique Sierra Leone UK Mali Morocco Tunisia Bangladesh Cape Verde Guinea-Bissau Côte d'ivoire Egypt Madagascar Zambia Mauritius Senegal Burundi USA Rwanda The emerging markets investment firm 9

PERHAPS IT IS DEMOGRAPHICS 400,000,000 15-24 years olds (source UN) 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 Eastern Europe Eastern Asia South Asia SE Asia SSA Latam + Caribbean Northern Africa 100,000,000 50,000,000-2000 2010 2020 2030 2040 2050 The emerging markets investment firm 10

EDUCATION IS A CRUCIAL FACTOR 100 90 80 70 60 50 40 30 20 10 0 Secondary school enrolment (UN) Around 1975 Around 1990 Around 2005 The emerging markets investment firm 11

AFRICA GDP IN 2012 Morocco Tunisia Algeria Libya Egypt W.S Niger C.V Mauritania Mali Chad Sudan GambiaSenegal G-B Guinea Burkina Faso Nigeria South Sudan Eritrea Djib. S-L Ghana Ethiopia Benin Lib. Togo Uganda Cote D'Ivoire Somalia CAR Kenya Rw. B. Cameroon 1 box = US$1bn Tanzania 1 box = total GDP less than US$0.5bn STP Eq Guinea Blank box = No available GDP data Gabon Nigeria - as per Renaissance assumptions post the 2012 GDP revision DRC LEGEND Strong autocracy Strong democracy Weak autocracy Weak democracy Congo Zambia Malawi Moz. Seychelles Madagascar Mauritius Angola Zimbabwe Swazil. Botswana Namibia South Africa $419bn and Nigeria $370bn we assume after the GDP revision, compared with Thailand ($377bn), Colombia $378bn and Venezuela $337bn Egypt at $257bn and Nigeria at $273bn before the GDP revision, compre with Singapore at $270bn and Geece at $271bn Angola at $121bn or Morocco at $100bn compare with Bangladesh at $118bn, Hungary at $129bn or Vietnam at $135bnSouth Africa Les. The emerging markets investment firm 12

AFRICA IN 2010 BY POPULATION Morocco Algeria Tunisia Libya Egypt W.S Niger Mauritania Chad C.V Mali Eritrea Senegal Burkina Faso Gambia Sudan G-B Guinea Djib. Cote D'Ivoire Ethiopia Sierra Leone Ghana Cen. A R South Sudan Som. Liberia Benin Nigeria Togo Cameroon Uganda Kenya Eq G. STP LEGEND Gab. Congo Strong autocracy Strong democracy Weak autocracy Weak democracy Rwanda Dem Rep oburundi Tanzania Seychelles Angola Zambia Malawi Madagascar Nmb. Bts. Mozambique Zimbabwe Mrt. Swz. Lesotho South Africa The emerging markets investment firm 13

CORRUPTION LINKED TO PER CAPITA GDP 10.0 Corruption index Per capita GDP 50,000 9.0 45,000 8.0 7.0 6.0 5.0 4.0 3.0 40,000 35,000 30,000 25,000 20,000 15,000 10,000 2.0 5,000 1.0 Qatar Singapore United States Austria Belgium Ireland Japan Taiwan Spain Korea (South) Czech Republic Oman Libya Poland Russia Belarus Argentina Cuba Uruguay Gabon Romania Brazil Jamaica FYR Macedonia China Turkmenistan Ukraine Guatemala Armenia Angola Jordan Indonesia Bolivia Honduras India Philippines Moldova Pakistan Nicaragua Nigeria Cameroon Mauritania Haiti Chad Kenya Uganda Mali Sierra Leone Mozambique Ethiopia Eritrea Liberia Zimbabwe 0 The emerging markets investment firm 14

WHAT HAPPENS NEXT? The emerging markets investment firm 15

A TYPICAL FORECAST WOULD BE THIS 8 7 Real GDP % change and 10-year moving average (IMF) 6 5 4 3 2 SSA GDP SSA 10 year rolling average GDP 1 0-1 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021-2 The emerging markets investment firm 16

AFRICA AS INDIA AS ASIA 14.0 12.0 Real GDP % change 1960-2043 (IMF, Renaissance, Reserve Bank of India) 10.0 8.0 6.0 4.0 2.0 India 1960-2013 SSA Developing Asia 1980-2013 Linear (India 1960-2013) Linear (SSA ) 0.0-2.0-4.0-6.0 The emerging markets investment firm 17

FASTEST BILLION - NIGERIA 7,000 Nigeria GDP in $bn (2012 dollars) 6,000 5,000 When will Nigeria overtake the 2012 GDP of the following? Japan 4,000 3,000 Russia / Italy Brazil / UK Germany 2,000 1,000 SA Indonesia Saudi Arabia Spain India 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 The emerging markets investment firm 18

CONCLUSIONS SSA has been following the Indian growth trajectory for 30 years, with a 20 year lag. This tells us that the next 20 years will be even better for SSA. Moreover India has itself been following Developing Asia with a ten year lag, implying good African growth out until the 2040s. In constant prices, and assuming Africa does no better than India/Developing Asia, this means the continent should grow from $2 trillion in 2012 to $29 trillion by 2050. With higher growth should come a deepening and widening of democracy across the continent. Corruption will decrease as per capita incomes grow. Africa will move up the value-added curve, from resources and services which help drive growth today, to service exports, textiles and increasingly heavy industry from the 2020s. Assuming a rise in private sector debt/gdp to 100% by 2050 implies a 30-40 fold rise in the stock of bank credit in constant 2012 dollars. An agriculture productivity boom is possible if Cerrado techniques are adopted across the Guinea Savannah. Infrastructure needs are affordable SSA oil production revenues of over $220bn easily exceed the annual $90-100bn estimated infrastructure needs. India tells us that however much is invested, still it may not fully meet demand. But in addition, governments will want to boost domestic savings, widen and improve education systems, yet try to ensure budget and external deficits do not widen so much that there is risk of a 1980s debt crash. There is a great opportunity to deliver a better performance in the coming 40 years than Asia achieved over the last 40 years. The emerging markets investment firm 19

AFRICA GDP IN 2050 GDP of AFRICA in 2050 (US$bn, in 2012 dollars) with each box representing $20bn of GDP - as forecast by Renaissance Capital, with colours reflecting Renaissance Capital forecasts of political change Morocco Tunisia Egypt Algeria Libya Chad WS Niger Eritrea Sudan Mauritania Djib. C.V Mali Somalia Senegal Gambia Ethiopia Burkina Faso South Sudan Benin Nigeria CAR G-B S-L Guinea Cote D'Ivoire Ghana Togo Liberia Uganda Kenya STP Rwanda Cameroon LEGEND ST&P Burundi Eq Guinea Strong autocracy Strong democracy Weak autocracy Weak democracy Gabon DRC Tanzania Congo Seychelles Angola Zambia Zimbabwe Malawi Moz. Mad. Mauritiu 1 box = US$20bn Namibia Botswana Swazil. SA Les. The emerging markets investment firm 20

THE FASTEST BILLION PRIVATE & CONFIDENTIAL www.fastestbillion.com Available also on Amazon November 2013 Twitter : @RencapMan @NdebeleNothando @YvonneMhango Charles Robertson Global chief economist crobertson@rencap.com The emerging markets investment firm

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EUROPEAN INVESTMENT CONFERENCE Beyond Austerity: Opportunities for European Investors in the Global Market 14 15 November 2013 London, United Kingdom

EUROPEAN INVESTMENT CONFERENCE Beyond Austerity: Opportunities for European Investors in the Global Market 14 15 November 2013 London, United Kingdom