introduction to sub-saharan africadenmark in kenya embassy of denmark: •kenya country program dkk...

Introduction to Sub-Saharan Africa

Danish Heads of Trade in Sub-Saharan Africa• Ghana

• Kenya

• Nigeria

• South Africa

From aid to trade

Commercial Attaché, Head of Trade Section, Søren Robenhagen – August 2018

Ghana

COUNTRY FACTS

GDP/capita: $4,600 (2017)Population: 27.5 millionEase of Doing Business: 57.24/100 (Rank 120, in SSA 12/49)Corruption Perceptions Index: 40/100 (Rank 81, in SSA: 12/49) Rule of Law Index: 0.59/1 (Rank 43, in SSA: 8/18)7 peaceful, democratic elections since return to multiparty democracy in 1992MINISTRY OF FOREIGN AFFAIRS OF DENMARK – THE TRADE COUNCIL 4

GDP Growth Rate (%) Inflation (%)2015 2016 2017 2018 2015 2016 2017 20183.8 3.7 8.5 6.8 17 10 10 9

From aid to trade

After years of political stability and high economic growth, Ghana achieved middle-income status in 2011. Denmark is now phasing out Danida programs in Ghana

Danida is widely known and respected in the local community, enabling the Embassy to help Danish companies gain access to prominent local firms and ministers

Growth rates are forecasted to remain high (6-8%) in the years to come, providing a good investment climate for Danish/foreign companiesMINISTRY OF FOREIGN AFFAIRS OF DENMARK – THE TRADE COUNCIL 5

Focus sectors

MINISTRY OF FOREIGN AFFAIRS OF DENMARK – THE TRADE COUNCIL 6

Food & Agriculture

• Food processing

• Supply chain & packaging

• Livestock and dairy

• Fast Moving Consumer Goods

Energy

• Renewables • Energy

efficiency • Oil & Gas

Water & Environment

• Water Supply• Non-revenue

Water• Waste Water

management • Solid Waste

Management • Flood control

Maritime & Infrastructure

• Maritime safety and surveillance

• Port operation and container depots

• Railway• Shipping

Government programs

1 District, 1 Factory: establishing at least one factory/enterprise in each of the 216 districts of Ghana higher value-added activities

Planting for Food and Jobs: increaseavailability of seeds and fertilizers by supporting private actors who are engaged in the delivery of goods and services along the value chain

1 Village, 1 Dam + Water for All: all-year-round agriculture, water + sanitation for all

Economic Partnership Agreement (EPA) with the EU: over the next 15 years, Ghana will liberalize 80% of imports from the EU Examples include industrial machines, certain

vehicles, and chemicals


Côte d’ivoire

GDP Growth Rate (%) Inflation (%)2015 2016 2017 2018 2015 2016 2017 2018

8.8 8.3 7.8 8.1 1.4 1.2 1.7 2


GDP/capita: $1,662 (2017)

Political stability is improving, international investmentsare increasing, and the middle class is growing increasing demand for goods and services

Ease of Doing Business: 53.71/100 (Rank 139, 17/49 in SSA)Corruption Perceptions Index: 36/100 (Rank 103, 16/49 in SSA)Rule of Law: 0.47 (Rank 84, 8/18 in SSA)

Opportunities: Construction, Agriculture, Health, Water and Waste Management, Energy, Machinery

Opportunities and Challenges

Commercial Counsellor, Head of Business Team, Henrik Petersen – August 2018

Kenya

COUNTRY FACTSPopulation: 50 million

14 times bigger than Denmark

Capital: Nairobi 4 million

Middle class: 5 million

Literacy: 88%

Religion: 80% Christians and 11% Muslims

Language: English and Kiswahili

GDP USD: 75 billion

GDP per capita app.: USD 1,500

Growth rate: over 5% last 10 years

GDP composition by sector:

35% Agriculture (61% of population)

17% Industry, incl. food processing

48% Service, incl. tourism


Political Background

• President Kenyatta re-elected in October 2017

• Devolution introduced in 2013

• 47 Counties each having a local government

• Counties focus on infrastructure development, but

also healthcare and education

• 15% of National Budget is transfered to Counties


To secure growth GoK focus on ”Big Four”:

- Food & Nutrition Security

- Affordable Housing

- Manufacturing, incl. food processing

- Affordable Healthcare for all

Kenya to be Middle Income Country by 2030

Challenges


Poor developedinfrastructure

• Roads, railroadsand port facilities(New railroad Nairobi Mombasa in 2017 and Port of Mombasa under renovation)

• Limited access to electricity

• Limited access to water and sewage

• Occasionalflodding and drought

Complicatedbusiness climate

• Heavy bureaucracy

• Landdisputes on ownership

• Kenya ranks as No 80 of 190 countries on WB Ease of DoingBusiness

Corruption

• Kenya ranks as No143 of 180 countries on TransparancyInternational Corruption Index

Crime and unemployment

• High crime rate and potential terror activity

• High unemploymencyrate, primarilyamong youngpeople - 40%

• Occasional tension in remote Counties

Opportunities

Building & Construction

• Supplies for infrastructure and building projects, incl. hotels, office and residential buildings

Food & Agriculture

• Machinery, feed, fertilizer

• Equipment for foodprocessing

• Supplies for fishfarming and fishing

• Supplies for a growing retail sector

Energy

• Supplies for hydro, geothermal, thermal, wind and solar projects – waste to energy to come

• Energy saving equipment

• 850 km oil pipeline planned


Opportunities


Health Care

• Medical equipment

• Disposables

• Pharmaceuticals

Water and Non-Revenue Water

• Pumps, pipes and equipment

• Sanitaryinstallations

ICT & Financial Services

• Mobile payservices

• Appdevelopments

UN Complexand NGOs

• Supplies for UN Head Quarters: UN Environment and UNHABITAT and other UN organizations in 3rd biggest UN Hub.

• Supplies for NGO’s, incl. refugee camps

Denmark in Kenya

Embassy of Denmark:

• Kenya Country Program DKK 1 billion 2016-2020. Primarily within:

- Governance & Healthcare

- Green Growth & Employment

• Somalia Country program

• Trade Council

• IFU

Exports

• Export to Kenya in 2017 DKK 193 million

- Machines, chemicals and pharmaceuticals

• Export to Denmark in 2017 DKK 33 million

- Coffee, tea, cocoa, chocolate and spices

MINISTRY OF FOREIGN AFFAIRS OF DENMARK – THE TRADE COUNCIL15

Trade Council:

• Commercial assistance

• Danida Business Instruments- Danida Business Explorer- Danida Market Development Partnership

• Danida Business Finance

Danish Companies

• Some 50 Danish companies represented

through subsidiaries or distributors

• Additional 25-30 companies established

by Danes or with Danish roots

Africas largest economy

Per Christensen, Head of Trade – August 2018

Nigeria

Country Background

Population 198 million (2018)

Admin. Capital Abuja

Bus. Capital Lagos (25million)

Middle class 5 million

Adult Literacy 59.6%

0 - 14yrs 42.5%

Religion 50:50 Christian / Muslim

Official Language English

GDP:

GDP nominal $376.28 billion (2017 est.)

GDP per capita $1,994.2 (2017 est.)

GDP growth rate 1.9% (Q1’18)

Contribution by Main Economic Sectors

Agriculture 21.6%

Industry 18.3%

Service 60.1%MINISTRY OF FOREIGN AFFAIRS OF DENMARK – THE TRADE COUNCIL 17

Country Background


Nigeria is gearing up for another election season in Q2

2019.

Elections held in early 2015 were a vast improvement

on the country’s democratic record with peaceful

transfer of power from a ruling party to its oposition.

However, sectarian conflicts in some parts of the

country (intertwined with inter-religious sentiments)

forms a major source of concern.

Oil is still the pillar of the Nigerian economy and the

recent price rally coupled with fragile ceasefire

agreement with the Niger Delta militants has helped the

country ganer its foreign reserves and climb out of it

economic recession last year.

Forecast growth still shows expectations for 2.8% in

2018 and 3.3% in 2019 to be driven by the country’s

expansionary fiscal policy and monetary measures,

rising/stable oil prices and production.

Challenges

Infrastructure

• The power sector remains highly deficient and expected reforms are slowed or stalled weighing heavily on industrial growth and productivity in the country

• On the other hand, the country has abundant advantages in harnessing natural resources for power such as solar. This will require substantial investment in a robust national grid

Ease of Doing Business

• The business environment is in dire need of reform

• With heavy bureaucracy and corruption in the public sector

• Also a key obstacle to private sector development

• Index shows that Nigeria now ranks 145 out of 190 countries (improving 24 places from its 2017 ranking)

Security

• Sectarian conflicts in some parts of the country –Northern Nigeria

• Farmers-Herders conflicts erupting into massive violence in parts of the north and middle belt

• Militants in the Niger Delta (oil-rich) region have staged attacks on oil producing facilities making the region a low-level conflict zone

• This does not translate to physical attacks on businesses and foreigners in major commercial cities and regions

Corruption

• BMI VIEW: ”Regardless of who wins the election, there will be no marked shift in policies relating to the economy or to security”

• Nigerian corruption record is improving slowly and the country’s score with Transparency International has climbed in recent years


Risk Matrix


SOME POSITIVE INDICES


‘Nigeria’s macro outlook is still supportive with oil prices remaining firm, and this should offset

potential uncertainty stemming from political risk going into H2 2018’ ….

Head Equities, FBNQuest Capital

ECONOMIC SCENERIOS


Opportunities

Food & Agriculture

• Machinery, feed, coldstorage

• Ingredients and intermediateproducts

• Equipment for foodprocessing

• Food and non-alcoholic drinks dominate the CPI basket at 52%

• Juice and Beer production

• Frozen fish

• Milk and dairyproducts

• Wheat – Nigeria’sdemand in excessof $1.5bn

Health Care

• Sale of medicaldevisces, and disposables

• Pharmaceuticals

• Tele-medicine

Energy

• Renewable energy

• Embeded power / offgrid solutions for established industrialareas

• Smart metres (possibly with somelocal assembly)

Water and Non-revenue Water

• Pumps, pipes and equipment

• PPP projects for enhanced watersupply

Industries

• FMCGs

• OIL & GAS: Specialized technicalservices & solutions

• Industrial automation


Although economic recovery still remains very much dependent on oil price recovery and production, the government

recovery and growth plans focuses on diversification of the economy especially via agriculture

Opportunities


E-COMMERCE

- Currently worth around $13billion (about

N4.01trillion), experts in the Nigerian

financial service sector have estimated that

Nigeria’s e-commerce market value could

rise to $50billion (N15.45trillion) over the

next decade

- A recent report by London based

Economist Intelligence Unit (EIU) valued

Jumia (a leading online retail platform) at

$1billion; the company operates in 10 other

African countries.

- This is because out of the estimated 198

million Nigerians, over 62 percent are

youths, which may represent a potential

audience as they are highly, connected on

the internet via the usage of mobile phones

https://abbakin.com/wp-content/uploads/2018/03/ecommerce-in-nigeria.jpg

Some Established Danish Companies:

Denmark in Nigeria

Embassy AbujaTrade Council LagosIFU Lagos

Danida is not present in Nigeria as Denmark’sfocus in Nigeria is purely trade-related.

Danish Exports to Nigeria- Machinery and Equipment- Fish Feed- Milk and Dairy Products- Frozen Fish- Pharmaceuticals- Software and Specialised Solutions to the Oil

and Gas Sector


An Emerging economy

Freya Petersen

Head of Trade and Regional Coordinator of The Trade Council in Sub-Saharan Africa – August 2018

South Africa

COUNTRY FACTS

Population: 55.9 million

GDP: $349,419.34 million (2017)

GDP Growth Rate: current +1.5% expected2019: +1,8% (World Bank)

GDP/capita: $6.161 (2017)

Ease of Doing Business Index: Rank 82/190 (64.89/100)

Rule of Law Index: Ranking 44/113 (0.58/1)

Inclusive democracy since 1994

Member of BRICS since 2010

World Bank ranking as “upper middle-income country”


Political Situation Cyril Ramaphosa new president

Focus on attracting more investment with a goal of $100billion within next five years

Progress in reform agenda is slow, but generally business confidence has improved since Ramaphosa took office

More private participation in energy generation - 25% of the investment target should come from energy investments

South African politicians know Denmark and is favourably disposed


The South AfricanMarket


There is no such thing as an average South African

Developing country with very poor urban areas

Market growth, but population is growing faster – GDP/capita decreasing

Top level universities and technological understanding – welcome smart solutions and new technology

Labour market can be challenging with the Black Economic Empowerment rules

Opportunities in focus sectors


Energy and energy efficiency

• Government goal of 30 % clean energy in energy mix by 2025

• Focus on decreasing carbon emissions

• Increasing need for energy efficiency in light of energy shortage

Food and Agriculture

• Agro-industrial sector is highly developed

• Technologies for improving land usage and durability of crops

• Livestock enhancement

• Sustainable farming solutions

Water

• Smart solutions to manage water resources

• Water and waste water treatment.

• Groundwater mapping

• Water conservation

• Minimize water consumption

Health

• Pharmaceutical market is the largest in Africa

• Generally strengthening the healthcare system

• Increase in lifestyle related diseases among the growing black middle class

• Tuberculosis and HIV still large challenges

GhanaSøren RobenhagenMail: [email protected]. +233 244 320 831

KenyaHenrik Petersen Mail: [email protected]. +25 4204 253 224

NigeriaPer ChristensenMail: [email protected]. +23 419 042 610

Contact information

South AfricaFreya PetersenMail: [email protected]. +27 124 309 356

introduction to sub-saharan africadenmark in kenya embassy of denmark: •kenya country program dkk...

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