Commodity Situation in Africa
Mar 22, 2016
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
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