Is this how you UNREST see Africa? FAMINE DISASTER 1
Actually, these are NOT images from Africa , but from other parts of the world. Every continent has its problems, but let’s separate perception from reality . 2
Africa is on the rise Political Trends Economic Trends Substantial growth in democratic rule in sub-Saharan 6 out of 10 of the fastest growing economies in 2018 are in Africa on the back of peace and stability in the region Africa. Ghana is expected to lead the with 8.3% GDP growth (The World Bank) Trends in Democracy Consolidation GDP Growth World MENA Sub-Saharan Africa World MENA Sub-Saharan Africa 3 Sources: Brookings, Foresight Africa viewpoint: Democracy in Africa in 2017; Global Finance, World’s GDP Growth by Region 2 017; The World Bank
Ghana - The “Shining” Star of Africa An Attractive Investment Destination
The “Black Stars” King of the Asante Kingdom A symbol of national pride A rich and unique culture Skybar - Villagio (Accra, Ghana’s capital) Growth and expansion across all A higher standard of living industries 5
“We want to build an economy that is not dependent “ For those of you who needed proof that there is a on charity and handouts , but an economy that will new generation of leaders believe in a new future, look at the proper management of its resources as the you have your proof now...There are leaders in Africa way to engineer social and economic growth in our who want a new relationship...[and] a future for the country.” youth in their country.” Nana Addo Dankwa Akufo Addo, President of Ghana Emmanuel Macron, President of France Africa CEO Forum, Monday March 20 2017 Africa CEO Forum, Monday March 20 2017 6
“The people of Ghana have worked hard to put democracy on a firmer footing , with peaceful transfers of power even in the wake of closely contested elections. And with improved governance and an emerging civil society, Ghana’s economy has shown impressive rates of growth. ” Barack Obama, former President of USA Parliament House - Ghana, Saturday July 11 2009 7
“ Africa is on the ascent and Singapore must ride this wave.” Tharman Shanmugaratnam, Deputy Prime Minister of Singapore Africa-Singapore Business Forum, Wednesday 24th January 2018 8
Why Invest In Ghana? “Evaluate People Accurately, Not ‘Kindly’” Ray Dalio 9
Stable Political Environment with Pro-Business Policies Rule of law Global Peace Index Ease of Doing Business #1 Rank in West Africa Measures the regulatory environment conducive to starting and operating a local firm. Source: Press Releases; The Economist; Transparency International; Institute of Economics and Peace; The World Justice Project; 10
Yield Curve Normalizing Headline Inflation within MPC Inner Band % % 25.0 22.9 20.0 19.0 16.4 15.0 12.0 17.9 11.8 10.0 13.3 8.0 5.0 0.0 91-Day 182-Day 1-Year 2-Year 3-Year 5-Year 7-Year 10-Year 15-Year Feb-15 Apr-15 Aug-15 Dec-15 Feb-16 Aug-16 Dec-16 Aug-17 Dec-17 Jun-15 Jun-16 Feb-17 Jun-17 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Headline Inflation Upper Limit Lower Limit 2015 2016 2017 GDP Rebounds and Inflation Subdued Fiscal Deficit and Primary Balance UnderControl % % 17.7 17.0 0.7 15.4 13.5 11 -0.2 -1.4 -3.9 11.8 8.8 -5.9 -5.4 7.9 9.3 -8.2 -6.3 7.3 -9.4 -10.1 4.0 3.7 3.9 -10.2 -11.5 2012 2015 2016 2017 2013 2014 2012 2013 2014 2015 2016 2017 Fiscal Deficit (% GDP) Primary Balance (% GDP) Yearly Inflation (%) Real GDP Growth (%)
Snapshot of Ghana’s Macroeconomic Fundamentals Strong improvement across all key indicators Key Indicators 2015A 2016A 2017 E 2018 - 2020 (Avg) Real GDP Growth 3.8% 3.7% 7.9% 6.6% B - Positive Inflation 17.7% 15.4% 11.8% Single digit 6.3% Fiscal Deficit (% of GDP) 9.3% 5.9% 3.0% B - Stable Trade Balance (% GDP) -8.3% -4.2% 2.3% 2.0% -0.40% Primary Balance (%GDP) -1.4% 0.5% 1 2.0% Import Cover 3.5months 3.5months 4.3months ≥ 4.0 months B3 - Stable Debt to GDP 71.5% 73.1% 68.7% < 65.0% 12 Source: Ghana Budget 2018; BoG; Press releases; Sentinel Global
Ghana: The Gateway to West Africa Ghana is strategically located with access to West Africa’s more than 350 million people. Key Trade Agreements Positiong Ghana as WTO Regional Gateway ECOWAS GHANA Maritime hub AGOA Financial Service Hub EU Access Petroleum Hub Attract Head Offices of Multinationals Opportunity to leverage ideal position – Centre of the World 13 Source: WorldOMeters, Western Africa Population (LIVE)
Ghana Credit vs. Other SSA & Emerging Markets Ghana performed better than peers on the back of prudent debt management, favourable economic prospects and increased fiscal stability. 14 Source: Bloomberg (24/11/2017) JP Morgan Emerging Markets Bond Index (tracks the spread performance of 30+ EM country USD-denominated bonds)
Ghana Outperforms Other SSA Equity Markets Strong stock market recovery signals favourable macroeconomic prospects and strong investor confidence Source: Bloomberg; Ghana Stock Exchange; MoFEP; Sentinel Global 15 Note: 1. As at Dec 2017
Strong GDP Growth on a Diversified Commodity Backbone Significant growth of key commodity exports in 2017 ✓ 2nd largest gold producer in Africa ✓ Accounts for over 90% of mining sector ✓ Accounts for more than 40% of exports ✓ Est. reserves of ~2,000 tonnes ✓ Gold refinery – 2nd largest in Africa ✓ Main agricultural export ✓ 2nd largest producer of cocoa in the world ✓ 969k tonnes in 2016/2017 ✓ Total hectares used of c.1.7 mn ha ✓ Target to increase production to 1.5m tonnes by 2020 ✓ Commercial quantities discovered in 2007 ✓ 3 main oil fields ✓ Won maritime dispute over Sankofa oil field ✓ Oil reserves of 3.7bn barrels ✓ Gas reserves of 41.6bn ft 3 of gas ✓ Peak level of 285k barrels per day 16 Source: Ghana 2018 Budget; BoG Statistical Bulletin; Press Releases; Sentinel Global
Emerging Middle Class Upbeat on Economic Prospects Rising consumer confidence and increase in spending Key Highlights Ghana is a thriving middle income class country with the 2nd largest economy in West Africa Consumer spending expected to hit ~USD 21 billion by 2020 Consumer Confidence Index Household Spending (USDbn) 115 20.7 110 105 15% 100 13.5 95 12.8 10.9 90 85 80 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 2015 2016 2017E 2020F Aug 04 = 100 17 Source: IMF WEO Oct 2017; BoG MPC Report; BMI; Sentinel Global
Access to a Young Skilled Labor Pool More than half of employable population are young and literate Key Highlights Ghana has ~60% of the adult population with at least some secondary education, more favourable than key peers such as Kenya (32%) and Cote D’Ivoire (25%) Strong efforts to increase enrolment: Free SHS initiative and plans to reduce taxes on private universities 18 Source: Source: BMI; UNESCO; UNDP;GES
Key Policy Initiatives Driving Growth and Stability Stable Currency and Inflation under Control Prudent & Improving Proactive Debt external sector Management Key Focus Areas 19 Source: Sentinel Global
Proactive Debt Management Efforts to manage debt at acceptable levels Key Highlights Reprofiling and liability management to create fiscal space, reduce cost of debt and reduce volatility and pressure on the currency Enhanced oversight and credit risk assessment of SOEs Improving Public Debt to GDP Shift to Longer Term Domestic Debt Extension of Maturity Profile & Tightening Domestic External Oct-16 Oct-17 72.5% Short-Term Medium-Term 71.6% 70.2% 68.7% 19% 24.3% 23.4% 24.0% 24.0% 24.8% 22% 24% 23% 24% 56.4% 22.8% 32% 41% 39% 43% 19.8% 19.8% 31% 17.0% 18.3% 18.3% 37% 38% 27% 46% 57% 13.3% 13.8% 15.0% 18.0% 37% 45% 32% 31% 29% 29% 39% 38% 32% 23% 2013 2014 2015 2016 2017 91D 182D 1Yr 2Yr 3Yr 5Yr 7Yr 15Yr 2013 2014 2015 2016 2017 20 Source: BoG; Ghana Budget 2018; Sentinel Global
Stabilisation of the Cedi and Inflation Under Control Key Highlights ▪ The Cedi rebounded c.5% 1 since its lowest level in March 2017 driven by robust FDI inflow, strong commodity sales, inflows from donor partners and IMF support ▪ Inflation expected to trend downwards to year end target band of 11.2% Stabilisation of Cedi vs. USD Declining Headline Inflation Strong performance of the Cedi over the last 6 months Inflation expected to stabilize in low teen 25.0% 0.27 0.26 20.0% 0.25 15.0% 0.24 0.23 10.0% 0.22 5.0% 0.21 0.20 0.0% Jan-16 Mar-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Jan-16 Mar-16 May-16 Jul-16 Oct-16 Dec-16 Feb-17 May-17 Jul-17 Sep-17 Dec-17 21 Source: Bloomberg; BoG Statistical Bulletin; Sentinel Global
Improvement in the External Sector Key Highlights Trade balance surplus on the back on strong export revenues Increasing international reserves position and sufficient import cover 22 Source: Bloomberg; BoG Statistical Bulletin; Sentinel Global
Where are the investment opportunities? 23
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