Rise of the African Consumer Market

2015
A perspective from Boston Analytics
Rise of the African Opportunity

Content
1
Introduction to Africa Today
Regional Assessment of Africa
Challenges of Accessing Consumers in African Markets
Strategies to Overcome Challenges
Appendix
Changing Consumer Market
Concluding Thoughts

Content
2
Introduction to Boston Analytics
Appendix
Concluding Thoughts

Economic interest in Africa stretches back over 100 years
Africa in 1914 Key Points
3
 In the nineteenth century, Europe’s major powers
battled it out for economic dominance of Africa
 In 1880, Europeans controlled ~10% of the
African territory. By1913, Europeans ruled more
than 90% of the African continent
– In 33 years, European nations had added almost
10 million square miles - one-fifth of the land mass
of the globe - to their overseas colonial
possessions via Africa
 The wave of Independence across Africa in
1950s and 1960s brought an end to the colonial
rule by Britain, France, Belgium, Spain, Portugal
and Germany
“On 7th January 1876, King Leopold II of Belgium read in The Times report of a Lieutenant Cameron, who
had just finished an arduous three-year journey across Africa which was widely assumed to be barren and
inhospitable, but Cameron described a ‘magnificent and healthy country of unspeakable richness ripe for
some enterprising capitalist that might take the matter in hand” (1)
Sources:
(1) The Scramble for Africa by Thomas Pakenham, Avon Books, 1992
(2) http://www.blackpast.org/gah/partition-africa

In more recent decades, its reputation has ranged from hopeless to
hopeful
4
Sources:
(1) Time
(2) Economist
Perspectives on Africa and its prospects have changed dramatically in the past decade from a
continent with no hope to one which is rapidly emerging on the international stage
1984
2000
20111992
2012

Note:
(A) Despite the fact that the African continent has over 1 Billion people, only seven countries in Africa have a population larger than California, i.e., Nigeria, Ethiopia,
Egypt, the DRC, South Africa, Tanzania and Kenya
Source:
(1) IMF World Economic Outlook Database
As a point of comparison, today Africa has roughly the same population as
India, but an economy the size of Brazil spread over a much larger land mass
and set of nations
5
Region Africa Brazil China India Russia
Population 2013 (M)
Population Density
(people per sq km of
land area)
GDP 2013 ($ B)
GDP per capita 2013 ($)
Area (M Sq. Km)
Compared to the BRIC countries,
Africa as a continent is large, less
densely populated and generally
poor
1,960
10,958
6,569
1,414
14,973
1,361 1,243
2,064 2,190
8,939
1,758 2,118
1,053
141200
29.4
8.5 9.3
3.0
16.4
35 23.7
145.5
421.1
8.8

Its economy now appears to be on a growth path however, with real
GDP growth, improved infrastructure and improved health status
6
Parameter 1980‒1990 1990‒2000 2000‒2010
Economic Growth
Real GDP Growth 1.9% 2.5% 5.1%
Economic Diversification(A) 66% 66% 61%
Per Capita real GDP Growth -0.8% 0.0% 2.7%
Poverty Ratio(A) 76% 76% 70%
Unemployment Rate (Highest) 16.3% 15.6% 15.3%
FDI Inflows Growth 21.7% 13.0% 16.3%
Exports Growth -1.4% 3.5% 13.2%
Communications Infrastructure Mobile Subscribers (per 100 People)(B) 0.002 1.721 44.713
Health Status
Prevalence of HIV(B),(C) 2.21% 5.76% 4.84%
Infant Mortality(B),(D) 106.31 94.07 68.12
Life Expectancy (Years)(B) 50 50 55
Notes:
(A) Includes Kenya, Nigeria and South Africa
(B) For Latest Year
(C) % of Population between 15-49 years age
(D) Per 1,000 live births
Sources:
(1) African Democracy, A glass half-full, Economist, Mar 31st 2012
(2) Freedom in the World, Country Status by Year, Freedom House
(3) Lions go global: Deepening Africa’s ties to the United States, McKinsey Global Institute, August 2014
8 of the world’s 15 fastest
growing countries 2000-2013
were in Africa(3)

In addition, democracy is gaining a greater foothold in the region
Africa Democracy Ratings (2011)(1) Freedom Development in Africa(A),(2)
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1975 1980 1985 1990 1995 2000 2005 2010 2014
Free Partly Free Not Free
Note:
(A) Freedom in the World, Freedom House’s flagship publication, is the standard-setting comparative assessment of global political rights and civil liberties
Sources:
(1) African Democracy, A glass half-full, Economist, Mar 31st 2012
(2) Freedom in the World, Country Status by Year, Freedom House

In terms of international partners, while the US contributes the
greatest in terms of humanitarian or development assistance to
Africa, China leads the way in terms of trade…by a long shot
8
Source:
(1) Economist.com/graphicdetail August 5, 2014
As current trade figures reflect, other emerging markets such
as China, India and Brazil have become significant trading
partners and represent formidable competitors in many
product categories. Indeed talk of a South-South connection
is emerging
0 2 4 6 8 10
Norway
Netherlands
Sweden
China
Canada
Japan
Germany
Britain
France
United States
Official Development Assistance (2012, $Bn) Trade with sub-Saharan Africa (2013, $Bn)
0 20 40 60
Brazil
Spain
Britain
Japan
Netherlands
France
Germany
India
United States
China 160

Content
9
Appendix
Appendix
Concluding Thoughts

Africa is best thought of in terms of its parts however, rather than as a
single entity. Conventionally, Africa is divided into five regions with
North and Southern Africa being the most investment friendly to-date
10
 A mineral-rich region, with Bauxite, Uranium, and Iron ore reserves
 Dominates world cocoa production (~65% share)
 Key Challenges: Underdeveloped infrastructure and difficult business environment
 Key Country: Nigeria
 Preferred investment destination in Africa
 Have strong ties with the European market, esp. France
 Benefits from historical ties to Arab world
 Key Challenges: Recent political upheavals
 Key Countries : Egypt, Libya
 Agrarian economy, dominated by tea and coffee production
 Key Challenges: Civil unrest & political instability, and underdeveloped infrastructure
 Key Country: Kenya
 Heavy dependence on oil
 Least integrated region due to wars and poor governance
 Key Challenges: Weak infrastructure, in terms of transportation, electricity, and water
 Key Country : DRC
 Most preferred investment destination in Africa
 Ranks highest on ‘ease of doing business’ in Africa
 Highly developed transportation and communication system. Highest literacy rate.
Relatively greater intra-regional trade
 Key Country : South Africa
North
East
West
Southern
Central
WestNorthEastCentralSouthern
Source:
(1) Lions of Africa, McKinsey Global Institute

Region North East West Southern Central Total
No. of Countries 53
Area (M Sq. Km) 29.4
Population 2010 (M) 1,014
Density of Population
(Person/sq Km) (2010)
35(B)
GDP 2010 ($ B) 1,705
GDP per capita 2010 ($) 1,681(B)
Major Markets
Algeria,
Egypt,
Libya,
Morocco,
Tunisia
Kenya,
Ethiopia
Ghana,
Nigeria
Angola,
South
Africa
Equatorial
Guinea,
Gabon
Key MNCs(A)
P&G,
Unilever,
Kraft-
Cadbury,
Nestle,
Coca Cola,
PepsiCo
Unilever,
Nestle,
Coca Cola,
PZ
Cussons
Coca Cola,
Kraft-
Cadbury,
Nestle, PZ
Cussons,
PepsiCo,
Unilever
Coca Cola.
Danone,
Kraft-
Cadbury,
Nestle,
PepsiCo,
Unilever,
Mars-
Wrigley
Coca Cola,
Nestle
583 200 319 517 86
North and Southern Africa are also the regions with the greatest
wealth; That being said, there is a great deal of growing interest in
East and West Africa where firms hope to enter and enjoy a first
mover advantage
11
Notes:
(A) Within the CPG industry
(B) Average across countries
Sources:
(1) Lions of Africa, McKinsey Global Institute
(2) World Bank Database
46 5028
163 297 302 140 113
5.7 6.4 6.1 5.9 5.3
5 14 16 10 8
24 21
North
East
West
Southern
Central
3,579 7643,6991,057671

Indeed, some describe a “cross” overlaying the continent and
suggest countries at the endpoints represent some of the most
attractive opportunities for multi-national consumer (A)
12
North
East
West
Southern
Central
Kenya
Ethiopia
Egypt
Ghana
Nigeria
South Africa
Note:
(A) Excluding Angola which is very often also listed in the top countries of interest to consumer products manufacturers
Source:
(1) Primary Research

Content
13
Appendix
Appendix
Concluding Thoughts

In terms of consumer spending, while small, Africa has grown faster
than most other regions; of the money spent, over 50% is spent on
food, beverages and other consumer goods
Growth in Global Consumer Spending Consumer Spending Split in Africa (2012)
14
10,294
15,827
8,403
11,5455,318
10,801
526
1,202
830
2,006
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2004 2012
$Billion
America Europe Asia Africa Others
43%
17%
11%
6%
5%
3%
3%
12%
Food & Beverage Housing
Non-food Consumer Goods Healthcare
Telecom Banking
Education Others
Source:
CAGR
5.5%
4.0%
9.3%
10.9%
11.7%

The African consumer market is partly driven by growth in the
continent’s population which is expected to double by 2050
15
Sources:
(1) http://www.prb.org/pdf13/2013-population-data-sheet_eng.pdf
(2) http://www.unesco.org/new/en/media-services/single-
view/news/one_third_of_young_people_in_sub_saharan_africa_fail_to_complete_primary_school_and_lack_skills_for_work/#.UpcGOPu3Wj8
(3) http://www.mckinsey.com/insights/consumer_and_retail/winning_in_africas_consumer_market
1.1
0.6
4.3
0.4
0.7
2.4
0.8
5.3
0.4
0.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
All Africa Latin
America/
Carribean
Asia North
America
Europe
Population(billions)
Population (billions)
2013 2050E
 The consumer market in Africa is expected to double in the next 40 years
– By 2050, ~20% of the world’s population would live in Africa
 More than two third’s of Africa’s population is below 25 years of age which is growing even faster, at 2.7%
– This indicates a large working age population in Africa which will further drive the future economic growth of the
continent
Growth in the African Consumer Population
2.1% 0.8% 0.6% 0% 0%

In addition, increasing urbanization in Africa is expected to boost the
consumer market by increasing demand, enabling access and
attracting additional investments
16
Sources:
(1) Winning in Africa, Mckinsey and Company
(2) Lions on the move: The progress and potential of African economies, Mckinsey Global Institute
(3) The 2014 African Retail Development Index: Seizing Africa’s Retail Opportunities, AT Kearney
 Percentage of African population living in cities has increased from 28% in 1980 to 40% in 2010
 The rate of urbanization is similar to China and more than India; reportedly the fastest in the world at 3.6%
 ~50% of African population are estimated to live in cities by 2050
 Africa has ~52 cities with more than ~1M population, more than India and North America
 Urbanization will boost demand and attract more investments
30%
40% 45%
73% 79% 82%
70%
60% 55%
27% 21% 18%
0%
20%
40%
60%
80%
100%
India Africa China Europe Latin
America
North
America
Urbanization (2010)
Urban Rural
48 52 109 52 63 48
Cities
with >
1M
people
Urbanization of Africa
The increase in
urbanization will
enable greater and
more cost effective
access to consumers

Sub-Saharan Africa has several countries with higher per capita
spend than that of China and India
Private Consumption per Capita, 2012 ($) (A), (B)
17
471 495 533 556 577 597 612 670 738
1,005
1,195 1,222
2,016
2,370
2,906
3,744 3,800
3,887
4,451
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Kenya
Congo,
Rep.
Mauritania
Nigeria
Comoros
Senegal
Zimbabwe
India
Cameroon
Lesotho
Angola
China
Swaziland
Gabon
Namibia
Equatorial
Guinea
Botswana
SouthAfrica
Mauritius
Seychelles
US$
Note:
(A) Includes Sub – Saharan African countries, with the highest private consumption per capita
(B) Values at constant 2005 exchange rate
Source:
 Private consumption in Sub-Saharan Africa ranges from as low as $124 in Burundi to more than $12,000 in Seychelles
 It is higher in many countries, largely because of uneven concentration of wealth within a small percentage of population.
– For example, in Equatorial Guinea, wealth is highly concentrated and 70% of the population still lives under the UN Poverty
Threshold
12,466
African Countries

A rise in the middle class population in Africa has led to an increase in
disposable income and a subsequent growth in discretionary spending
18
Source:
(1) http://afritorial.com/newafrica/
 The percentage of the population that is middle class in Africa has increased from 28% (~110M) to 35% (~300M) in the
last thirty years
– Middle class population as a percentage of total population is estimated to reach ~40% by 2050
 Rise in middle class population has led to increase in disposable income and purchasing power of Africans
67% 65% 62% 60%
28% 30% 32% 35%
5% 5% 6% 5%
0%
20%
40%
60%
80%
100%
1980 1990 2000 2010
%
African Population Split by Income Levels
Poor (< $2 per day) Middle Class ($2-20 per day)
Rich (> $20 per day)
Growing Middle Class Population

40% of CPG spend in Africa is controlled by the tier 1 consumers,
including Progressive Affluents and Trendy Aspirants
African Consumers: Nielsen Segmentation
19
Type of
Consumers
Sub-
Classification
Monthly CPG
Spending ($)
Average Monthly
Income ($)
% of Total CPG
Spend
Key Characteristics
Tier 1
Progressive
Affluents
~190 ~1000
40%
– Older with families
– Well established
Trendy Aspirants ~175 ~850
– Young and upcoming
– Well educated
Tier 2
Balanced Seniors ~125 ~625
28%
– Better educated, tend to be in mid-
thirties, married
Struggling
Traditionals
~125 ~375 – Under educated/ low income
Tier 3
Wannabe
Bachelors
~90 ~400
32%
– Labourers/ entry level employees
Evolving
Juniors
~80 ~580 – Students/ unskilled labourers
Female
Conservatives
~70 ~350 – Housewives/students/ labourers
Source:
(1) The Diverse People of Africa, 2012, Nielsen. The data is from countries including Nigeria, Kenya, DRC, Zambia, Uganda, Tanzania,
Ethiopia, Mozambique, Angola, Namibia, Zimbabwe and Ghana
Key Points
 Tier 1 consumers are wealthier, more urban and relatively well-educated consumers with high income and CPG spend
– They drive growth of modern trade and online retail channels, and are also more open to new and expensive brands
 Tier 2 consumers are Africa's middle aged and middle income populations, with average CPG category spend
– They primarily focus on the needs of their families and focus on affordability
 Tier 3 consumers, the largest segment within Africa, consists of consumers who spend much less on CPG categories
than the average

Within Sub-Saharan Africa, the top global 50 CPG firms have focused
their investments primarily in five countries, with over 50% operating
in South Africa and Nigeria
20
Note:
(A) Presence based on review of office or manufacturing locations or evidence of significant distribution/share in country
Sources:
(1) OC&C Global 50, 2013
(2) Annual Reports
(3) BA Analysis
Global 50 CPG firms’ presence in Sub-Saharan African Countries 2012(A)
21
15
11
8 8
21
17
14
11
7
7
3
15
12
0
5
10
15
20
25
30
35
40
South Africa Nigeria Kenya Ghana Angola Sub-Saharan
Africa
Sub-Saharan
Africa Excluding
SA and Nigeria
NumberofGlobal50CPGFirms
35 or 70%
26 or 52%
18
15
11
36
29
Mix of US/Non-US
firms in sub-Saharan
Africa is similar to
overall Global 50
US Firms
Europe/Other
Firms

There is evidence that global 50 CPG firms present in Africa are reaping
the benefits - in the form of higher growth rates and strong returns
21
Notes:
(A) Presence based on review of office or manufacturing locations or evidence of significant distribution/share in country
(B) Includes all firms listed as present in Nigeria, Kenya, Ghana or Angola, and selected reviewed other Sub-Saharan African countries
Sources:
(1) OC&C Global 50, 2013
(2) Annual Reports
Growth and Return in Nigeria
Selected
CPG
Firms
Sales 2011 CAGR of Sales
2010-11
Operating Margins 2011 ROCE 2011 (Pre-Tax)1
Global Nigeria Global Nigeria Global Nigeria Global Nigeria
$13.4b $670m 13% 14% 4% 12% 11% 92%
$94.8b $630m 6% 20% 14% 22% 16% 41%
$64.8b $350m 10% 15% 14% 15% 22% 85%

Content
22
Appendix
Concluding Thoughts

The African opportunity is poised with multiple challenges however
Challenges of Accessing Consumers in Africa Market
23
 Environment Challenges
– Differences across countries on multiple parameters
– Lack of infrastructure
– Low level of intra-region trade
– Bureaucracy and corruption
– Uncertain policy environment
Source”
(1) BA Analysis
Environment
Business
Market
 Business Related Challenges
– Lack of managerial talent
– Lack of strong manufacturing and distribution local
partners/acquisition targets
– Lack of local information
– Proliferation of counterfeit goods
 Market Related Challenges
– Significant share of population in low income group –
low purchasing power
– Strong dominance of traditional trade
– Underdeveloped capital markets

It is hard to generalize in Africa; the countries are very diverse,
as they are in other emerging regions of the world
Index of Intra-Region Variances among Nations on Key Economic Parameters
24
0.0
1.0
2.0
3.0
4.0
5.0
6.0
GDP Growth
Rate
Economic
Diversification
Above BoP
Population %
Urbanization % Consumer
Spending
Working Age
Population %
Literacy Rate Unemployment
Rate
Africa Americas Asia Middle East Europe Oceania World Average
 African nations show smaller variations across nations on key economic parameters compared to Asia, Middle East and
Overall World
 However, variations on most metrics are higher compared to advanced regions such as Americas and Europe highlighting
the diversity within Africa and need for a country specific strategy and not a single strategy for the continent
Challenge: Differences across Countries
Sources:
(3) BA Analysis
E
B
M

Indeed, each country within Africa presents a unique story in
terms of its business, economic and demographic features
25
African Market
GDPGrowth
AboveBoP
Population(%)
Per-capita
ConsumerSpend
WorkingAge
Population(%)
LiteracyRate
Unemployment
Rate(%)
Urbanization
Economic
Diversification
EaseofDoing
Business
Algeria B C D D D A D D D
Angola D A C B B C C A C
Benin C D D D C A C C C
Botswana B D D D C A D B B
Burkina Faso D B D A C C D A A
Burundi C D C D C B D D D
Cameroon A D D D D B D A A
Cape Verde C C C C C A B B C
Central African Republic B D D D D A D D D
Chad D B A B A C A B D
Comoros D C C C C D C C D
Congo C B B B C B A C C
Côte d'Ivoire D A A A C D A C C
Democratic Republic of the CongoA C C B B C C C B
Djibouti B D C B C D C C B
Egypt D B A A C C A C C
Equatorial Guinea D A B A B A B C D
Eritrea A D D C D A D A B
Ethiopia C A A A B C B A A
Gabon D D D C D B C A B
Gambia B C D D D A D C D
Ghana B C C B A A C D A
Guinea D A B A B C B B C
Guinea-Bissau C B C B A C D A A
Kenya D A B A A B A A A
Lesotho C C D C D A B D D
African Market
GDPGrowth
AboveBoP
Population(%)
Per-capita
ConsumerSpend
WorkingAge
Population(%)
LiteracyRate
Unemployment
Rate(%)
Urbanization
Economic
Diversification
EaseofDoing
Business
Liberia D B A A A D A B B
Libya B D D D D B C D D
Madagascar A D C B A D A D A
Malawi C B A A A B B A B
Mali A A A B B D B C C
Mauritania A D B C D C B C B
Mauritius B B B C A D C B A
Morocco D A B B B D A B D
Mozambique C B A A A C A B A
Namibia A B B D A D B B A
Niger D A A B A D C A C
Nigeria A C B C B B B A B
Rwanda C C C C B A C B B
Senegal A C D C D A A D D
Seychelles C A A A B B A C B
Sierra Leone A D A D C B A D A
South Africa B A A D D B A B C
South Sudan B B C B C A B D C
Sudan A A A B B C B A A
Swaziland B A B A A D C A C
Tanzania C C D D D B D D D
Togo B C B C A D D D B
Tunisia A D A D D D D D D
Uganda B C B A B B D C C
Zambia A B A C B C C B A
Zimbabwe A B C A C C B B B
d Countries in Highest Quartile c Countries in Second Highest Quartile
b Countries in Third Highest Quartile a Countries in Bottom Quartile
Notes:
(A) Economic Diversification is share of Manufacturing and Services in Total GDP
Sources:
(1) IMF, World Bank
(2) BA Analysis
Challenge: Differences across Countries E
B
M

With respect to consumer spending, of the 53 countries in Africa,
four represent more than 50% of the total consumer spending
Share of Countries in Africa Consumer Spending (2012)
26
19%
18%
10%
6%5%
5%
3%
3%
3%
3%
26%
South Africa Egypt
Nigeria Algeria
Morocco Angola
Sudan Tunisia
Ethiopia Kenya
Other 45 Countries
 South Africa in the South, Egypt in North and Nigeria in West are the top three countries in terms of consumer spending
 Kenya – which only contributes 3% to Africa’s consumer spending is the largest market by consumer spending in Eastern
Africa
 The smaller 45 countries only contribute about $300 B out of a total of $1,200 B of consumer spending across Africa
Sources:
(1) BA Analysis
Total = $1.2 T
B
M
> 50% of consumer
spending

38
93
75
121
73
101
104
100
78
91 92
109 109
98 100 94
105
198
35
46
28
46 42
179
110 151 107 101
113
98
95
86 80
176
61
90 90
109
100 97
78 84
138
113
138
112 116
30
-
50
100
150
200
250
CentralAfricanRepublic
Gabon
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
Algeria
Egypt
Libya
Morocco
Angola
Mozambique
Namibia
SouthAfrica
Zambia
Zimbabwe
Cameroon
CapeVerde
Côted’Ivoire
Gambia
Ghana
Niger
Nigeria
PriceIndex(SouthAfrica=100)
Chocolate Index Sugar Conf Index
Furthermore, there are often wide disparities in prices across
African regions with highest variations in Western African
countries
Variation of Retail Price Per Kg for Chocolate and Sugar Confectionery in Different African Countries
27
 Prices for same products vary between different African nations highlighting the need for in-depth country specific
intelligence and potentially individual strategies
 The least amount of variations were noticed between Southern African nations which reflects the fact that South Africa
acts more like a region and trade flows more freely
Source:
(1) Eurromonitor
Challenge: Differences across Countries
East Africa North Africa Southern Africa West AfricaCentral
Africa
E
B
M

The prices can also vary dramatically across players highlighting
different marketing strategies of CPG companies across
countries
Variation of Price Per Kg for Snickers and Dairy Milk in Different African Countries
28
 The above chart compares the prices for Snickers (Mars) and Dairy Milk (Mondelēz) chocolates in the select countries
 While Mars and Mondelez price similarly in some markets (e.g., Egypt and South Africa), they are very different in others
95
115
100
144
191
100
70
100
84
142
-
50
100
150
200
250
Egypt Nigeria South Africa Kenya Cameroon
PriceIndex(SouthAfrica=100)
Mars Snickers Mondelez Dairy Milk
Note:
(A) The above example of prices for chocolate brands has been used as an example to highlight price differences across African countries for same products
Sources:
(1) Data for Kenya, South Africa, Cameroon and US has been derived from store visits
(2) Data for Nigeria and Egypt has been obtained form Euromonitor
(3) Data for Philippines has been obtained from Nielsen
(4) Data for India has been obtained from www.chocohouse.in (accessed on 5 August 2013)
(5) Data for Mondelēz price in Cameroon is for Dairy Milk Fruit and Nut
B
M

With the exception of a few countries, road network is poor in most
African nations
Road Density (Km of Road/100 Sq. Km Land Area) Paved Road (% of Total Road))
29
- 25 50 75 100 125 150 175
Ghana
South Africa
Kenya
Côte d’Ivoire
Zimbabwe
Nigeria
Togo
Benin
Egypt
Morocco
Zambia
Tunisia
Cameroon
Tanzania
Senegal
DRC
Namibia
Congo
Algeria
Libya
Botswana
Angola
Ethiopia
Mozambique
Gabon
Eritrea
Sudan
0% 20% 40% 60% 80% 100%
Egypt
Algeria
Tunisia
Morocco
Libya
Sudan
Senegal
Botswana
Zambia
Eritrea
Togo
Mozambique
Zimbabwe
South Africa
Nigeria
Tanzania
Namibia
Ethiopia
Ghana
Gabon
Cameroon
Angola
Benin
Côte d’Ivoire
Congo
Kenya
DRC
Notes:
(A) Top 27 countries only included
Source:
Challenge: Lack of Infrastructure
UKBrazil IndiaChina Brazil India China UK
E
B
M

Almost all African countries with the exception of South Africa
rank low on global logistics Index
30
Challenge: Lack of Infrastructure
LPI Rank
Select
Countries
LPI Cumulative
Score
Customs Infrastructure
International
Shipments
Logistics
Competence
Tracking &
Tracing
Timeliness
1 Germany
4 UK
28 China
34 South Africa
54 India
62 Egypt
65 Brazil
74 Kenya
75 Nigeria
90 Russia
100 Ghana
104 Ethiopia
142 Cameroon
International Logistics Performance Index (LPI) 2014(A),(1)
Notes:
(A) Scores range from 1-5 with 5 being the highest score;
(B) Top most ranked countries in Africa included
Source:
(1) Logistics Performance Index: 2014, World Bank
African Countries
4.12
4.01
3.53
3.43
3.08
2.97
2.94
2.81
2.81
2.69
2.63
2.59
2.30
4.1
3.9
3.2
3.1
2.7
2.9
2.5
2.0
2.4
2.2
2.2
2.4
1.9
4.3
4.2
3.7
3.2
2.9
2.9
2.9
2.4
2.6
2.6
2.7
2.2
1.9
3.7
3.6
3.5
3.5
3.2
2.9
2.8
3.2
2.6
2.6
2.7
2.5
2.2
4.1
4.0
3.5
3.6
3.0
3.0
3.1
2.7
2.7
2.7
2.4
2.6
2.5
4.2
4.1
3.5
3.3
3.1
3.2
3.0
3.0
3.2
2.9
2.9
2.7
2.5
4.4
4.3
3.9
3.9
3.5
3.0
3.4
3.6
3.5
3.1
2.9
3.2
2.8
E
B
M

The time and cost involved in inland transportation of goods are
also very high
Average Transit Time (Mombasa-Nairobi)(A),(1) Share of Logistics Cost (Mombasa-Nairobi)(A),(1)
31
41%
17%
15%
13%
4%
4%
3%3%
Sea Freight Shipping Port Handling
Container Freight Station Charges Clearing Agent Fees +Vat
Inland Routing Costs Indirect Costs of Delays
Direct Costs of Delays Shipping Lines Charges
 It takes ~30 hours and costs ~ $9,844 to transfer a 20 foot container from Mombasa to Nairobi
 Driver delays such as rest and personal errands would normally not be necessary for such a short distance, but the
various regulatory delays force the driver to rest a night during transit
 The shipping line charges include fees such as delivery order fee, bill of lading fee and piracy risk surcharge
0
5
10
15
20
25
30
0 100 200 300 400
Time(Hrs)
Distance (Kms)
Goods transiting 430
km from Mombasa to
Nairobi take ~ 30 hours
on an average. The
same distance in the
US takes ~ 6 hours
Weight Station (3 hrs.)
Police Checks (2 hrs.)
Driver Delays (11 hrs.)
Weight Station (3 hrs.)
Unloading (2 hrs.)
Notes:
(A) Logistics Costs and Average Transit Time of a 20 Foot Container, Mombasa - Nairobi
Source:
(1) CPCS Transcom (2010) Analytical Comparative Transport Costs Study Along the Northern Corridor Region
Challenge: Lack of Infrastructure E
B
M

Africa forms a small share of global international trade; intra-
region trade is very low compared to other regions
Global Merchandizing Trade in Different Parts of the World (2013)
32
 While rising relatively faster than others, African merchandise trade still
accounts for a very low share of world trade
 Intra-African trade remains a very low percentage of African trade with the
world. Most of the intra-region trade is through land locked countries
where its on its way to other destinations
0%
20%
40%
60%
80%
100%
ShareinDestinationRegion
Europe Asia America Middle
East
Africa
OceaniaIntra-region Other Regions
69%
54% 56%
6%
12% 8%
31%
46% 44%
94%
88%
92%
Exporting Region
Challenge: Low Level of Intra-region Trade
Note:
(A) Includes all goods and commodities; excludes services
Source:
(1) Trade Map
% of Total Global Trade
E
B
M
 The lack of Intra-Africa trade poses a
challenge for firms hoping to have a
launch pad in Africa from which it will
expand to other markets

One reason for low level of intra-region trade is the existence of
multiple economic/custom unions which do not function well
and add complexity to trade
33
Regional Economic Communities in Africa
Botswana
Lesotho
Namibia
South Africa
Mozambique
Djibouti
Eritrea
Ethiopia
Sudan
Comoros
Seychelles
Mauritius
Madagascar
Angola
DR of Congo
Cape Verde
Liberia
Gambia
Ghana
Guinea
Nigeria
Sierra Leone
Benin
Burkina Faso
Côte d'Ivoire
Guinea-
Bissau
Mali
Niger
Senegal
Togo
UEMOA
ECOWAS
Cameroon
Central African Republic
Chad
Congo
Equatorial Guinea
Gabon
CEMAC
SADC
ECCAS
COMESA
Burundi
Rwanda
Kenya
Uganda
EAC
Algeria
Libya
Mauritania
Morocco
Tunisia
AMU
Malawi
Zambia
Zimbabwe
Swaziland
Notes:
(A) The above schematic is a direct adaptation from Accenture study on African consumer market to highlight the multiple economic/custom unions existing in Africa
(B) Please refer to appendix for acronyms definitions
Source:
(1) The Dynamic African Consumer Market, Accenture, 2011
 There are more than 14 trading blocs in Africa with overlapping membership. Of those SADC,
ECOWAS and EAC (where they share a language and moving closer to a shared currency) work
best
 Lot of goods are traded informally and elude the customs
E
B
M
 Poor regional
trade also stifles
overall growth,
since for many
small countries in
Africa, regional
trade is required
to experience
economic
diversification, a
key driver in
economic growth

Within intra-region trade however, South Africa acts as the
trade hub
Major Exporters to Africa Region (2013)
Share of Major Countries in Intra-region Exports to
Africa
34
100%
Europe,
40%
Asia, 30%
Intra-region,
11%
America,
11%
Middle
East, 7%
1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Africa Imports Share of Regions
South Africa,
50%
Nigeria, 6%
Algeria, 6%
Zambia, 4%
Angola, 3%
Morocco, 3%
Congo, 3%
Mozambique,
3%
Others, 21%
 A significant share of the intra-region trade in Africa is contributed by South Africa followed by Nigeria and Algeria
 Nigeria’s share of intra-regional trade is smaller than its external trade, reflecting the dominance of hydrocarbons in the
country’s exports
Challenge: Low Level of Intra-region Trade E
B
M
Source:
(1) Trade Map

More than half of South Africa’s intra-region trade is with its
neighbouring countries; Indeed, the SADC is one of the
strongest trading hubs in Africa
Regions in Africa
Share of Countries in Intra-Africa Exports of South
Africa
35
17%
15%
15%
9%
7%
5%
4%
4%
3%
8% 4% 4% 2% 2%
0% 5% 10% 15% 20% 25%
Zambia
Zimbabwe
Mozambique
DRC
Angola
Nigeria
Kenya
Tanzania
Ghana
Others
North
East
West
Southern
Central
E
B
M
Source:
(1) Trade Map

Much of Africa’s intra-regional trade is unaccounted for since it
takes place via informal markets
36
 Although there are no reliable statistics available, adding informal cross-border trade to official figures for intra-African
trade would increase the share of intra-African trade in total trade
 In the Southern African Development Community (SADC) area, its estimated that informal cross-border trade could
amount to an additional $17.6 B a year, equal to 30-40% of formal trade
 In 2009 and 2010, Ugandan total informal exports to the Democratic Republic of the Congo, Kenya, Rwanda, the Sudan
and the United Republic of Tanzania were worth $790 M and $520 M, respectively
 Furthermore, estimates of informal cross-border trade in West Africa show that it could represent 20% of GDP in Nigeria
and 75% of GDP in Benin
Destinations: Eritrea, Djibouti
Merkato Market
Addis Ababa, Ethiopia
Kantamanto Market
Accra, Ghana
Mboppi Market
Accra, Ghana
Destinations:Burkina Faso, Togo Destinations: Chad, CAR(A), Gabon
Notes:
(A) Central African Republic
Source:
(1) UNCTAD
(2) BA Analysis
Challenge: Low Level of Intra-region Trade E
B
M
Examples of Informal Trade Markets Which Facilitate Intra-regional Trade

With the exception of five countries, all African nations rank low
on global corruption perceptions index
Global Corruption Perceptions Index (CPI) Scores
37
0 10 20 30 40 50 60 70 80 90 100
Botswana
Cape Verde
Seychelles
Rwanda
Mauritius
Niger
Ethiopia
Tanzania
Mauritania
Mozambique
Sierra Leone
Togo
Comoros
Gambia
Chad
Equatorial Guinea
Guinea-Bissau
South Sudan
Somalia
 CPI ranks countries based on how corrupt their public sector is perceived to be, where a score of 0 means highly corrupt and 100
means very clean public sector
 While over the years, indicators related to human development and sustainable economic development have improved in Africa, there
has been noticeable deterioration with regards to the rule of law and safety
 Only five Sub-Saharan African countries score above average scores in 2013 survey. Issues include stealing, looting government
coffers, rigging elections, etc.
United StatesChinaIndia
Top5
African
Countries
Bottom5
African
Countries
MedianAfrican
Countries
Note:
(A) List represents top five, bottom five and those right in the middle of all African countries
Source:
(1) Corruption Perceptions Index, 2013, Transparency International
Challenge: High Rate of Bureaucracy and Corruption
World Average
E
B
M

“Policy Instability” is also identified as one of major challenges
associated with working in an African country
Challenges of Doing Business in Sub-Saharan Africa
38
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Access to Financing
Corruption
Inadequate Supply of Infrastructure
Inefficient Government Bureaucracy
Tax Rates
Inadequately Educated Workforce
Inflation
Policy Instability
Poor Work Ethic in National Labor Force
Tax Regulations
Restrictive Labor Regulations
Crime and Theft
Foreign Currency Regulations
Insufficient Capacity to Innovate
Government Instability
Poor Public Health
% of Responses
 As per the Executive Opinion Survey conducted by the World Economic Forum, policy instability is one of the key challenges of doing
business in Africa. For example:
– In Nigeria, imports of sugar confectionery were suddenly and without defensible rationale banned in 2000 which resulted in the exit of then major
lollypop player – Chupa Chups. However, the ban has now been lifted
– Similarly, import of fruit juice was also banned in 2002, and import duty for juice concentrates was reduced to 5% in the same year to push local
manufacturing
– Zambia, recently suddenly banned the use of American dollars in local transactions—a needless extra hassle for firms operating there
Challenge: Uncertain policy environment E
B
M
Source:
(1) World Economic Forum Executive Opinion Survey (2010)

Benin
Botswana
Burkina Faso
Burundi
Chad
ComorosDjibouti
Guinea
Lesotho Liberia
Madagascar
Malawi
Mali
Mauritania
Mozambique
Namibia
Niger
Rwanda
Senegal
Sierra Leone
Swaziland
Togo
0
3
6
9
12
15
18
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cameroon
Ethiopia
Gabon
Ghana
Kenya
Sudan
Tanzania
Tunisia
Uganda Zambia
18
28
38
48
58
Algeria
Angola
Morocco
Nigeria
South Africa
80
130
180
230
280
330
380
39
A significant portion of the African population lives below
poverty line
Challenge: Significant Share in Low Income Group E
B
M
Population Living in Poverty in African Countries (LYA)(A),(1)
Global Average (42%)
Oil contributes
significantly to Nigeria’s
GDP, the profits from
which do not trickle down
to the population
Note:
(A) LYA = Latest Year Available.
Source:
(1) World Bank Database Bubble size indicates population in Million
Population below poverty line (% of total)
GDPinUS$

Nigeria is particularly noteworthy given its population and very
large % which live at the bottom of the pyramid(A)
BoP Percentage of Population(A,B), (1,2)
Notes:
(A) LYA – Last year available.
(B) Bottom of Pyramid segment is defined as people earning less than $2.5 a day (PPP).
Sources:
(1) World Bank.
(2) 2013 World Gazetter projections
(3) Individual national government statistics
(4) BA Analysis.
32%
39%
64%
76%
77%
88%
90%
93%
97%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Egypt
South Africa
Ghana
Uganda
Kenya
Ethiopia
Nigeria
Tanzania
Congo
% of total population
African Countries with Highest BoP Percentage Total Population (M)
75
46
177
87
43
35
26
53
85
B
M
40

Note:
(B) Ratio of Consumer Spend to GDP per Capita is taken to show that countries with high oil money tend to have concentration of wealth with few people which results in low overall
consumer spend
Source:
When trying to assess the wealth of a population, it is important to
note countries which rely upon high-value exports often have
lower consumer spend than more diversified economies, making
GDP per capita a misleading indicator in many African countries
41
Algeria
AngolaChad
Congo
Equatorial
Guinea
Gabon
Libya
Nigeria
30% 50% 70% 90%
Share
Reliance on Oil and Household Spend in Africa
PerCapitaConsumptionas%ofPer-capitaGDP(B)
African nations with high reliance on
oil and other high-value exports tend
to have high GDP per-capita but
relatively low consumer spend
B
M
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Côte d'Ivoire
Democratic Republic of
the Congo
Djibouti
Egypt
Eritrea
Ethiopia
Gambia
Ghana
Guinea
Kenya
LesothoMadagascar
Mali
Mauritania
Morocco
Mozambique
Namibia
Niger
Rwanda
Senegal
Sierra LeoneSouth Africa
South Sudan
Sudan
Swaziland
Togo
Tunisia
Uganda
Zambia
Zimbabwe
0%
20%
40%
60%
80%
100%
120%
0% 5% 10% 15% 20% 25%
Share of Mining in GDP (%)

African markets are overwhelmingly characterized by traditional
trade
Modern vs. Traditional Retail Trade (2010) Definition
42
80%
85%
5%
20%
36%
45%
35%
34%
25%
15%
14%
10%
10%
8%
7%
4%
3%
0%
20%
15%
95%
80%
64%
55%
65%
66%
75%
85%
86%
90%
90%
92%
93%
96%
97%
100%
0% 20% 40% 60% 80% 100%
UK
US
India
China
Brazil
Libya
Tunisia
South Africa
Morocco
Kenya
Egypt
Angola
Algeria
Nigeria
Cote d Ivoire
Ghana
Sudan
Ethiopia
Modern Trade Traditional Trade
 Traditional Trade (TT) is defined as all that trade that
flows through traditional outlets, such as kiosks, corner
shops, local mom n pop stores, and open markets, or all
trade except that which flows through retail chains, hyper
markets, supermarkets, etc. is modern trade (MT)
Key Points
 TT is characterized by a large complex network of
independently owned retailers and distributors carrying
primarily local or regional brands
 It can be difficult to penetrate for both national and multi-
national firms given its highly fragmented nature, yet it
serves as the conduit for reaching the largest percentage
of the consumer population
 Some manufacturers also report, despite its high
distribution costs, they can reap greater margins from TT
than MT retailers who negotiate hard on price
Common TT Categories
Food and Beverages Home Décor and Furnishing
Clothing and Textile Personal Care
Consumer Durables Footwear
Jewelry and Watches Books, Music and GiftsSources:
(1) Business Monitor International
(2) BA Knowledge Repository
(3) Planet Retail Research (2011)
(4) Feed the Lion, FMCG Opportunities in Africa, A.D. Little Report, 2014
SelectedAfricanMarkets
Challenge: Strong Dominance of Traditional Trade E
B
M

Informal trade, a sub-section of traditional trade which consists of
hawkers and table tops, is a very strong channel in Africa
Informal Retail Outlets in African Nations
43
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Nigeria South Africa Kenya Cameroon
 Informal retailers act as an important delivery channel of goods to consumers in Africa
 These are mostly small make-shift structures such as table tops, hawkers, spaza shops, etc. which are usually located
around bus stops and crowded public areas
 Serving both cities and smaller towns, they primarily sell items such as snacks, beverages, fruits, bread, cigarettes,
confectionery etc.
 Smokers, students, drivers, passers –bys are the main customer group for table tops and hawkers
B
M
Source:
(1) BA Analysis

While South Africa has one of the highest rates of modern
trade penetration, Nigeria at least with respect to grocery
stores is expected to witness high growth in this area
Retail Environment
Presence (Number of Outlets)
South
Africa
Nigeria Kenya
Modern Trade (MT) % of Grocery Retail 62% 5% 25%
Current
Total No. of
Stores
Global Retail Chains
3,000
9 0
Regional Retail Chains 7 55
Local Retail Chains 30 150
Total 3,000 46 205
Projected
Total No. of
Stores
Global Retail Chains
3,500
50 1
Regional Retail Chains 56 100
Local Retail Chains 40-50 250
Total 3500 156 351
Note:
(A) Projected total represents the total number of outlets of each type expected in the next 5-8 years for each country respectively
Source:
(1) BA Analysis
B
M
Much of the planned
expansion in modern
trade in Nigeria is
coming from South
Africa retailers
44

Despite ambitious projections, Nigeria is unlikely to see a
dramatic increase in the total % of all trade represented by
modern trade in the near future
Evolution of Modern Retail(1)-(4)
45
 Modern retail in Nigeria has been expanding rapidly over the past few years driven by Shoprite, Africa’s biggest retailer,
Spar, Europe’s largest retail network, and Massmart, South Africa’s second-largest retailer
 However, even if modern retail market in Nigeria continues to expand it won’t phase out or replace the informal markets
completely which still and will continue to dominate the retailing .
1% 2%
10%
25%
55%
67%
74% 75%
80%
83%
0% 2%
5%0% 1%
34%
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
ShareofModernRetail
USA India China Nigeria
Sources:
(1) http://www.bain.com/Images/INDUSTRY_BRIEF_Ahead_of_curve_in_emerging_markets.pdf
(2) http://sg.nielsen.com/site/documents/2010RetailandShopperTrends2010.pdf
(3) http://www.kaminibanga.com/professional/articles/brand-equity/27-modern-retail-advantage-consumer-2004.html
(4) http://publications.gc.ca/collections/collection_2013/aac-aafc/A74-1-103-2013-eng.pdf
B
M
It took 10 years and the
contribution of many
different factors for
China to reach 30%
modern trade penetration

Domestic credit from banks to private sector is relatively lower
in African nations compared to other developing markets,
stifling investment and growth opportunities
46
Algeria
Angola
Cameroon
Côte d’Ivoire
Egypt
Ethiopia
Gabon
Ghana
Kenya
Libya
Morocco
Namibia
Niger Nigeria
Rwanda
South Africa
Tanzania
Tunisia
Uganda
Zambia
Brazil
China
India
United States of America
0%
5%
10%
15%
20%
25%
30%
35%
40%
0% 20% 40% 60% 80% 100% 120% 140%
CommercialLendingRates
Domestic credit to private sector by banks (% of GDP)
Access to Capital in Selected African and Other Markets (LYA)(A),(1)
Note:
Source:
Challenge: Underdeveloped Capital Markets E
B
M

Africa as a region ranks lowest in the Global Talent Index (GTI)
developed by Economist Intelligence Unit
GTI Regional Scores
47
 Africa has a significant shortage of management and specialised skills
 Talent shortage is putting a strain on investment in Africa as educational institutions fail to produce the quantity and quality
of skills required to meet growing business needs. 75% of the CEOs operating in African countries surveyed by PWC
outlined a lack of available talent as a threat to their growth
 Even when talent is identified, e.g., through a head hunter to fill senior positions, multinationals note they are only available
at a very high price, comparable to European executives
 Many believe the shortage of available managerial talent has become much worse since the entry of multinational telecom
firms over the past ten years in Africa who offered higher wages and more senior titles in order to recruit professionals
from other industries. Professional services firms, such as accounting firms, similarly followed suit.
0 10 20 30 40 50 60 70
North America
Western Europe
Asia
Latin America
Eastern Europe & Central Asia
Middle East
Africa
Challenge: Lack of Managerial Talent E
B
M
“I have designed my
strategy and have the
funding, what I need now
is people. I can’t find the
people I need to run the
business” – Africa and
Middle East Regional
Director for Global
FMCG Player
Source:
(1) World Bank

Indeed, in most Africa countries, educational levels fall behind
developed and developing nations
48
102%
99%
112%
113%
137%
112%
111%
109%
102%
85%
79%
0% 50% 100% 150%
USA
Russia
India
China
Brazil
Kenya
Cameroon
Ghana
South Africa
Nigeria
Ethiopia
% of Gross
School Enrollment (% of Gross Population) (LYA)(A),(B),(1)
Primary Secondary Tertiary
Notes:
(A) Gross enrolment ratio. Total enrollment in an education group (primary, secondary, tertiary), regardless of age, expressed as a percentage of the population of official education
group age. GER can exceed 100% due to the inclusion of over-aged and under-aged students because of early or late school entrance and grade repetition
(B) LYA = Latest Year Available
Source:
SelectKeyAfricanCountries
Challenge: Lack of Managerial Talent
96%
89%
63%
81%
106%
60%
50%
61%
102%
44%
25%
0% 50% 100% 150%
USA
Russia
India
China
Brazil
Kenya
Cameroon
Ghana
South Africa
Nigeria
Ethiopia
% of Gross
95%
76%
18%
27%
26%
4%
12%
12%
15%
10%
3%
0% 50% 100%
USA
Russia
India
China
Brazil
Kenya
Cameroon
Ghana
South Africa
Nigeria
Ethiopia
% of Gross
E
B
M

Identifying and gathering reliable data on Africa is a challenge
due to the lack of credible data, inconsistent research standards,
and few quality research vendors
49
Challenge: Lack of Information
Ability to
Effectively
Conduct Primary
Research In-
Country
E
B
M
Credibility &
Reliability
Recentness of
Data
Availability of
Fieldwork
Agencies
DataAvailabilityDataCollection
 Africa overall suffers from a lack of credible data. Given the relatively small size of the
markets that exist within many countries, few research firms have invested the effort
needed to provide robust analysis of such things as market size, player shares, retail
segmentation, etc. Instead, data must be gathered first-hand and triangulated in order to
come up with reasonable and defensible estimates
 Data from secondary sources is scattered and lacks uniformity. National governments
serve as the primary source of macro-economic and demographic data in many countries.
Not only is their data often considered suspect and self-serving, it is also very often
outdated, particularly in countries with rapidly emerging economies
 Primary research is an evolving industry in most countries in Africa. There are few long
standing firms and most of them are trained only in the most conventional types of
consumer market research
 Finding a reliable, well trained research firm who follows international protocols, while is
also creative and flexible enough to address the unique characteristics of each market is a
great challenge
 While respondents in Africa generally do not expect the same honorarium as those in
other more developed nations, such as the US and Europe do, it can sometimes still be
difficult to recruit and conduct interviews as well as gather useful insights
– Given the lack of communications infrastructure, e.g., reliable phone lines in Ethiopia, it can be
very time consuming to simply recruit and schedule interviews
– Some respondents unfamiliar with primary research are suspicious regarding how the
information might be used and may not appreciate the interviewers need for specific and
detailed information
– There are approximately 2,100 languages spoken in Africa with languages spoken per country
ranging from 1 to more than 100 (1)
Source:
(1) The challenges in conducting market research in Africa, SIS International Research, September 2008

Counterfeit goods are seen across product categories and
appear to becoming more prevalent
50
Sources:
(1) BA Analysis
(2) http://www.north-africa.com/naj_economy/industries_markets/1septtwentyfive47.html
Challenge: Proliferation of Counterfeit Goods
Wood glue in Ethiopia
Genuine
Imitation
Adidas shoe in Algeria
In Algeria, from 2010-2011
the amount of counterfeit
products seized by
customs officials rose by
84.5%
E
B
M
 It is difficult to estimate the size of the counterfeiting industry since it is based on seizures but in East Africa alone it is
believed nearly $500 million has been lost in revenue due to counterfeit goods. Indeed many firms feel as though their
real competitors in these markets are not those known to them, but those making counterfeit goods
Sony music systems in Kenya
While most counterfeit products were
originally electronic goods and medicines
they now range from food products to
industrial goods
While in some cases,
counterfeit products are exact
replicas of genuine products, in
other case it is just the look and
feel of a dominant brand which
is copied

Content
51
Appendix
Concluding Thoughts

Successfully entering and expanding in Africa often requires a
very different approach
52
Recommendations to Combat Challenges
Challenges Recommendations
Wide
Differences
across
Countries on
Multiple
Parameters
 Each African country requires a unique approach and strategy.
Companies should select markets based on clearly defined criteria which
go beyond macro-economic parameters and appreciate local market
dynamics, consumer learning, etc.
 Invest appropriately in learning about the local environment. Adapt the
business model and offerings to the markets, if needed
Lack of
Infrastructure
 Invest in own infrastructure if critical to business and economically
feasible (e.g., captive power in Nigeria)
 Optimize cost in non-critical areas to offset investment in infrastructure
and maintain profitability
 Appreciate and incorporate in product development any unique
environmental issues which might impact consumption (e.g., inconsistent
electricity for electronics, refrigerators for food)
 Invest in supplier relationships to manage raw material and supply chain
deficiencies
Low Level of
Intra-Regional
Trade
 Identify true regional trade hubs to ensure maximum reach in market
 Conduct robust analysis of local players to identify strong partners for
entry and expansion
 Follow growth of modern trade via major modern retail chains to expand
across countries if modern trade is key to business
Bureaucracy
and Corruption
 Identify a local contact or partner to manage all regulatory and policy
affairs
Uncertain
Policy
Environment
 Engage in scenario planning in order to prepare for sudden changes
 When feasible and warranted develop strategy to work with local policy
makers
 Identify means to minimize investment risk rather than avoid it
Environment
Business
Market

CPG/FMCG companies need to be cognizant of local market
differences when building their African strategy
53
 Rather than develop an “Africa” or pan-Africa strategy, many firms now recognize they must treat each
country differently, identify and prioritize the top opportunities and then pursue each with a strategy
which reflects the local dynamics
– For example, for the same company, the retail strategy in South Africa may focus more on modern
trade, while in Nigeria, the focus may be on traditional trade. The same company may have lower
distribution costs, but lower margins with modern trade in South Africa, but the opposite in Nigeria
Response
Global Strategy Cluster Strategy Country Level Strategy
 All markets are same  Markets can be clustered in
different groups based on
similarities
 Each market is different and
should be treated in different
way
Relevance to Africa MarketLow High
Response: Differences across Countries E
B
M

In order to address the lack of infrastructure in Africa, some
companies, such as Diageo, invest in their own infrastructure
and partnerships in order to support the sale of their products
54
 Diageo invested in its own infrastructure to overcome challenges related to power, water
supply, and consistent supply of commodities in Africa
 Currently Africa accounts for nearly 13% of Diageo’s total net sales. The continent
contributes 30% of Diageo’s global sales growth and 40% of its global operating profit
increase
Key Points/Examples
 Africa represents Diageo’s largest group of emerging
markets in terms of net sales. The company employs over
5,300 people through the production, distribution and
promotion of its brands
 Diageo invested in Africa to create integrated supply
chains: it built production sites with their own power and
water supplies
 It invested in local suppliers, in developing a sales force
and in working jointly with distributors to enhance their
capabilities
 Diageo sources 70% of grain for its breweries and spirits
production facilities locally. It invests in developing
agriculture locally. Not only does this allow them greater
control over their inputs, it helps them better manage their
foreign exchange volatility
Sources:
(1) http://www.diageo.com/en-row/CSR/Pages/resource.aspx?resourceid=1078
(2) http://blogs.hbr.org/2012/06/how-to-succeed-in-africa/
Response: Lack of Infrastructure E
B
M
Response
“You really need to be able to generate at least 80 percent of your
own power requirements by yourself either by embracing solar
energy which some companies are doing or buy powerful generators.
Power is a real challenge to industrialization in Nigeria.”
— Nestle Business Manager, Nigeria

Avon relies on local post offices to distribute their products
and make payments in South Africa where the infrastructure
is otherwise poor in rural areas
 While global sales only grew by 1% in 2011, Avon’s sales in South Africa grew by 29%
 Avon has provided local women with a viable employment opportunity by improvising and
utilizing innovative means to manage distribution, credit and payments for their products
Market Approach
 In hard to reach rural areas with few roads and
even fewer formal street addresses, Avon sends
the products to local post offices where the reps
pick them up and redistribute them to locals. Post
offices and/or large local retailers are also used as
pick-up spots for pay checks
 Without a well established formal credit histories,
Avon has also improvised by creating a simple
scoring system related to one’s personal assets,
e.g., ownership of a cell phone, demonstrations of
responsibility and permanence to establish their
credit worthiness
Source:
(1) The Economist, August 18, 2012
South African Post Office
Avon Sales Reps
in South Africa
55
B
M
Response

Multiple companies have adapted to the lack of infrastructure
by changing their product formulations
Key Points/Examples
56
 Promasidor is an African dairy and beverage company
headquartered in South Africa
– In 1979 Promasidor launched Cowbell brand of powdered
milk with an objective to make milk accessible to all Africans
– Promasidor replaced the animal fat with vegetable fat in its
Cowbell milk powder to give it a longer shelf life, thereby
diminishing the dependency on cold supply chain
– Promasidor‘s small sachet packs reduce the price point, but
also provide an added benefit of enabling children to pour
the powdered milk directly on their tongues and avoid
concerns about finding fresh water
 Unilever has developed a low-cost climate stable
margarine which doesn’t require refrigeration in order to
combat the lack of cold chain in Africa
 P& G’s Ariel brand of detergent in Africa is designed to
lather quickly thus reducing the water needed to wash
clothes
 Promasidor tailored its product in Africa to overcome challenges related to supply of
freshwater and availability of milk
 Unilever has redesigned a wide range of products from food items to household products to
address the lack of refrigeration and water in Africa
 Similarly, P&G has introduced household products which address the lack of clean water
Sources:
(1) http://www.africanbusinessreview.co.za/reports/promasidor
(2) http://www.promasidor.com/about_products.php
B
M
Response
While Promasidor was the first
powdered milk firm to develop a
more shelf stable product in
response to the lack of cold chain,
many firms with other products
have followed suit, changing either
their packaging or formulation
Unilever’s Shelf Stable
Blue Band Brand
P&G’s Quick Lather
Ariel Brand
Promasidor’s Cowbell
Brand

The high rate of mobile phone penetration in Africa has
provided many firms with an opportunity to overcome other
infrastructure limitations
Key Points
57
 Mobile phone penetration in Africa is widely reported to
be higher than 80% and smart phone penetration ~18%
 Mobile phones are being used to transfer money, buy
products online and manage money through such things
as credit, savings, and insurance programs. Mobile
money transfers alone are expected to exceed $200
billion by 2015 according to the World Bank
– Tanzania is reportedly the leader in M-Commerce (Mobile
Money Services) across the Sub-Saharan African markets,
followed by Kenya, South Africa, Ghana, Nigeria and
Uganda
– Tanzania also leads in Mobile Payments for airtime top ups,
merchants, bills and salary payments by 60%, followed by
South Africa 19% and Ghana by 6%
– Multiple new innovative M-Commerce products are being
built now on the M-PESA platform which can be operated on
simple no-frills phones
 Safaricom introduced the M-Pesa concept in 2007 in Kenya which is a mobile-phone
based money transfer and micro-financing service
 MTN Ghana has launched the Mobile Money Bill Payment service to facilitate
payment of electricity and DSTV (satellite TV service) bills for subscribers
Sources:
(1) OC&C Global 50, 2013
(2) Africa's mobile boom powers innovation economy, BBC.com, June 30, 2014
(3) Mobile penetration landscape in Africa, SSCG
B
M
Response
“Before camera phones, I had to travel to remote places to collect the payment
confirmation receipts from distributors/retailers, or wait for the payment to be
transferred to my account to dispatch goods.. Now, I ask my customers to take
picture of the payment confirmation receipt and send it to me through phone and
the goods are dispatched right away”
– Area Sales Manager, Dangote group, Nigeria
There are currently over 600 Million
mobile phone users in Africa. 1/3 of third
of Kenya’s GDP takes place through
mobile transactions

Dark and Lovely
Though few in number, regional distribution houses can offer
a faster expansion route to MNCs
Key Points
58
 L’Oreal recently signed a protocol agreement with Compagnie
Française de l'Afrique Occidentale (CFAO) covering production and
distribution of cosmetic products in Ivory Coast
 This agreement will provide L’Oreal access to
– CFAO’s distribution network
– Its knowledge of African countries and markets
– CFAO’s production facility for cosmetics and packaging components
 With this agreement, L’Oreal intends to strengthen its presence in
French speaking African countries and speed up its expansion in
Sub- Saharan Africa
 MNCs such as L’Oreal partner with specialized distribution firms focusing on Africa,
and leverage their experience to enter or expand in Africa
 In some cases, large distribution houses may also offer manufacturing or packaging
support to its principals
Sources:
(1) http://www.forbes.com/sites/greatspeculations/2014/12/29/loreal-strengthening-africa-presence-can-bolster-target-of-1-billion-new-customers-part-2/3/
L’Oreal Brands For Africa
Response
Response: Low Level of Intra-Regional Trade, Lack of Local Information
The distribution and production partnership with CFAO is part of a strategic plan for the L'Oréal Group in
Ivory Coast and French-speaking West Africa. Ivory Coast is a fast-growing market where beauty products
have a strong appeal among local consumers. It is crucial for L'Oréal to increase its presence in these
expanding markets
- Managing Director, Africa Middle-East Zone, L'Oréal'
"Our strategy in West Africa is to offer major international brands a manufacturing and distribution tool suited
to the markets they wish to tap into. This new partnership is fully in line with CFAO's strategy of encouraging
the consumption of innovative, quality products in West Africa.
- Chairman, CFAO's Management Board
Garnier
E
B
M

For the most part, the firms which grow in Africa accept rather than
fight the characteristics which define these markets, in terms of trade,
the consumer population and local financing
59
Challenges Recommendations
Significant share
of population in
low income
group – low
purchasing
power
 Design strategy to lower product price and ensure reach
 Work with distribution partners who have proven record in
reaching low-income consumers
 Identify and use innovative means to reach out to lower
income customers, including possibly partnering with other
manufacturers who have good reach and complementary
products rather than developing own distribution
Strong
dominance of
traditional trade
(TT)
 Segment, prioritize and address relevant TT segments
 Identify right set of distribution partners with ability to reach TT
outlets
Underdeveloped
capital markets
 Identify, evaluate and possibly employ alternative means of
access to capital
Environment
Business
Market

Similar to other emerging markets, the most common response
to the large low-income populations in Africa, is offering
smaller SKU sizes
Key Points/ Examples
60
 In Nigeria, to target the lower income groups, PZ Cussons introduced three different
pack sizes for “Zip” detergent and five pack sizes for “Morning Fresh” cleaners
 Also in Nigeria, Reckitt Benckiser offers a bottle of Harpic for 120 naira (~ $0.75) in
order to combat the otherwise high cost of the product
 Nespray, an instant milk powder from Nestle, contains calcium, zinc and iron - all
essential for children. It is sold in a 250g pouch that costs only a few rand (< $0.50)
 In East Africa, Colgate is sold in small tubes to respond to limited purchasing power
of local consumers; joint toothpaste and toothbrush promotions are also common
across Africa
 In Nigeria, P&G sells Ariel by the ounce, enough for a couple of wash loads. Most
people buy it from the street side vendors of Lagos, where a 1-ounce packet of Ariel
costs $0.10. Diapers are marketed as one-a-day items: "One Pampers equals one dry
night". A pack of 10 sells for $ 2.30
 In South Africa, Danone and local dairy group Clover launched a project selling
individual pots of vitamin-enriched Danimal yoghurt for 1 rand (~ $0.14) for the BoP
segment
 Consumer product companies launch small SKUs or lower priced (value for money)
offerings in African markets (similar to the strategy adopted in other emerging
markets such as India)
 Companies use innovative grass root distribution models to reach out to BoP
customers usually in rural and underdeveloped areas
Source:
(1) http://upetd.up.ac.za/thesis/available/etd-07292012-144042/unrestricted/dissertation.pdf
(2) http://www.colgate.ph/app/Colgate/PH/Corp/LivingOurValues/Sustainability/RespectForPeople/OperatingResponsiblyInEmergingMarkets.cvsp
(3) Primary Research.
(4) BA Analysis.
Response: Significant Share of Population in Low Income Group
Response
E
B
M

The large presence of traditional trade and smaller sized
retailers typically requires companies to work with multiple
entities to ensure their products reach the final retailer
61
Source:
(1) BA Primary Research
Jobbers
International/Local Production Unit
Local Entity Distributor
Sub-distributor
Micro Stores
(Kiosks)
Retail Chains Groceries
TT Outlets
(e.g., Dukas)
Forecourts
Wholesalers
DirectSalesTeam
 Emerging markets of Africa requires a multi-pronged distribution approach
 The first step to identifying the key channel entities involved in the distribution of a
product category and designing an effective route-to-market strategy is to identify
the target retail segments and trace back their means of procurement
Response: Strong Dominance of Traditional Trade
Response
E
B
M

Since there are very few large distributors in Africa,
companies must work with and rely upon a large network of
distributors to ensure coverage
62
 To expand its coverage in Nigeria and penetrate rural areas, Promasidor has
established a large fragmented network of 600 distributors in Nigeria (it is one of
the largest distribution network in Nigeria) which in turn reach out to other sales
channels – wholesalers, retailers, table top stores and others
– Promasidor’s market leadership ensures that its distributors stay loyal to it. The
company provides attractive margins, marketing support and fridges to some of its
distributors
 Heineken uses a 3-tier distribution structure in Nigeria (super key distributors,
wholesalers and bulk breakers), reaching almost 400,000 retail points
– 25% of Super Key Distributors (SKD) have NB–exclusive warehouses enjoying
preferential trade terms
– Large sales force to secure exclusive SKD to retail delivery
– Customer bonding programme including credit facility, bonus rebates, seasonal
promotions, pallets, annual customer award and birthday gifts
 Nestlé delivers directly to spaza shops (informal convenience stores) in South
Africa which make up about 30% of the national retail market. Many of these are in
remote areas and owners often cannot afford delivery vans. Nestlé has set up 18
distribution centres that deliver to spazas. It charges them the same prices as
bigger outlets
 Promasidor uses a large network of distributors to penetrate TT trade in Nigeria
 Heineken and Nestle deploy multi-level distribution networks in Africa to create
strong presence in traditional trade
Sources:
(1) A continent goes shopping, The Economist, August 2012
(2) Nigeria: Huge country, huge beer market potential, Heineken, Amsterdam, November 2009
Response
E
B
M

In order to strengthen the capabilities of traditional trade outlets
and gain greater favor with them, some manufacturers provide
complementary business services
63
 “Golden Store” program to improve channel
partner economics
– P&G employees help improve and remodel independent
stores in rural areas in Nigeria
– P&G overhauls the outside appearance and the inside
design of remote stores, and provides software and other
expertise to help boost and track sales
– In exchange, logos of P&G brands are prominently
displayed outside the stores, products are given preferential
shelf space and store owners become ambassadors for
P&G products
 Coca-Cola provides South African retailers with advice on shelving and
merchandizing as well as free drink coolers
 In South Africa, SABMiller has helped illegal taverns convert into licensed outlets by
assisting with the application process and leading information workshops. SABMiller
has also made all license applicants eligible for training in customer care, stock
management, book keeping, credit control, and responsible alcohol use
 P&G provides multiple business services to retailers in exchange for preferential
treatment
Source:
(1) OC&C Global 50, 2013
Response
E
B
M
“We have created over 120 new successful
entrepreneurs with sustained training and marketing
support in rural and semi-urban areas over the past five
years.”
– Manoj Kumar, MD, P&G Nigeria

CPG/FMCG firms must be proactive in order to address the business
challenges they face in Africa
Challenges Strategies
Lack of
managerial talent
 Define clear processes and KPI (key performance indicators) for
local teams
 Invest in training and development of local team, if need be
 Build in retention plans to ensure you are not training for
competitors
Lack of strong
manufacturing
and distribution
local partners/
acquisition
targets
 Build your list based on local market visit and channel feedback
 Segment and understand exact type of partner sought, given
local market definitions (importer, distributor, wholesaler, etc.)
 Identify and sequence criteria to ensure you do not “boil the
ocean” and metrics are relevant given local environment
 Think strategically and creatively, e.g., find partners dealing in
multiple brands and products to ensure penetration, Piggy back
on other people's network to reduce investments
 Invest in local partner for capability and growth
Lack of local
information
 Quickly identify and evaluate local sources of information
 Treat market intelligence as an asset. Invest in market
information
 Have plan for continuous intelligence development
 Identify areas of collective research where you can cooperate
with competitors. Promote industry associations
Environment
Business
Market
64

Some manufacturers are actively engaging in developing the
necessary managerial talent
Key Points
65
 Diageo’s Africa Early Career Programme is a development
programme offering roles and experience from day one. The
company recruits people across African nations and provides
positions in supply chain, finance, HR, sales and marketing
 The three-year programme includes both functional training and
leadership development. Functional training helps trainees gain
skills, knowledge and experience while leadership training
encourages thinking, and drives change
 People spend time with sales force out in the field to increase
their commercial awareness to understand brands, customers,
etc.
 Diageo launched a pan-African graduate program to accrue hundred graduates
each year to ensure a pipeline of talent going forward
Source:
(1) http://www.diageo-careers.com/en-row/graduatesandmba/opportunitiesandprogrammes/Africa-Early-Career-Programme/Pages/default.aspx
Response: Lack of Managerial Talent
Response
E
B
M

To close “the last mile” of distribution, some firms build their
own partners
66
 Coca-Cola’s MDCs of manual distribution centers are independently owned, low-cost
businesses created to service emerging urban and rural retail markets where classic
distribution models are not effective or efficient
 The MDC model identifies and engages independent entrepreneurs, who receive business
training and in some situations financing
 Started in Ethiopia, Coca-Colas now runs more than 32,000 MDCs in more than 15
countries in Africa, employing over 19,000 people and generating more than $950 M in
revenues for Coca Cola
Source:
(1) Developing Inclusive Business Models, Harvard Kennedy School and International Finance Corporation.
(2) http://www.thesupplychainlab.com/blog/photo-library/coca-cola-micro-distribution
(3) Developing Inclusive Business Models, Harvard Kennedy School and International Finance Corporation.
(4) http://www.businesscalltoaction.org/wp-content/files_mf/1286826974CocaColaCaseStudyFORWeb.pdf
Micro Distribution Centers – Concept(1–3)
MDCs Transporters
Retail outlets
Distribution of product is mostly
manual (e.g. by pushcarts) to keep
costs to a minimum
A central point for warehousing of
products, with a manageable coverage
area and defined customer base
(typically about 150 retail outlets)
MDCs typically serve low-volume outlets located in
more difficult to reach areas, with limited cash flow
and high service frequency requirements
Response: Lack of Distribution Partners
Response
E
B
M

Similarly, firms have invested in mobile micro point of sales
to ensure adequate reach
Key Points
67
 Danone set up a separate network of distributors called ‘Dani
Ladies’ to promote its low cost dairy product designed in
partnership with dairy partner Clover
– "Dani Ladies" are trained to sell in open-air markets or door-to-door in
townships
– Danone provides a uniform, a cooler box, a trolley, support and
training, but the saleswomen must pay for the product in advance after
a pilot credit system was deemed unsuccessful
 FanMilk in Africa directly employs around 1,500 people in
production and administration and creates income opportunities for
more than 20,000 vendors and street hawkers. Employees and
vendors of FanMilk are generally the breadwinners of families
 Both Danone and FanMilk have successfully used mobile carts to close the last mile
and reach end consumers in difficult to access places which have little infrastructure
Sources:
(1) Danone Sustainability Report 2006
(2) Dani Ladies on front line of push to sell to poor, Reuters, June 2007
Dani Ladies in South Africa
Response
Response: Lack of Distribution Partners
FanMilk Vendor
E
B
M

Companies facing multiple challenges sometimes resort to
completely different models
68
 Jumia, an e-commerce site in Africa has responded to challenges with inter-regional trade,
managerial talent and infrastructure by:
 Creating an extensive network of transportation vehicles to fulfill orders and make
delivery to end consumers across Nigeria, using regional warehouse for order
fulfillment outside Nigeria
 Sourcing talent from among the pool of non-resident Nigerians who have received
education form renowned institutions globally, and are looking to come back
 Implementation of cash on delivery model to address lack of payment infrastructures
Key Points/Examples
 Jumia started with Nigeria, and, within a short span of time, opened warehouses in other
important African countries such as Egypt, Morocco, Kenya and Cote d'Ivoire
– Jumia also expanded to other African countries such as Uganda, Tanzania, Cameroon, Ghana;
– Jumia supplied goods to some of the above countries from warehouses established in larger
countries such as Kenya and Nigeria
 Jumia ensures timely delivery of goods in all 36 states of Nigeria, building trust among the
consumers; this is possible only through significant investment in supply chain
infrastructure
 To address the challenge of finding right managerial talent, Jumia recruits young and
passionate Nigerians from all over the world, who wish to return to their home country
 In addition, Jumia is also funded by seasoned investors that helps them gain access to
right people in the industry to work for them
 One of the main reasons why e-commerce didn’t grow rapidly in Africa until now is the
absence of reliable payment infrastructures and low usage of credit cards. Jumia solved
this implementing cash on delivery service for its products wherein its employees collect
cash at the time of delivery from the consumer directly
Sources:
(1) Company websites and annual reports
(2) http://www.howwemadeitinafrica.com/
Responses: Lack of inter-regional trade, managerial talent and infrastructure E
B
M
Response
“We’ve done two things. One is we’ve
raised money from very smart investors
who can get us access to top-notch
talents. And the second thing we’ve done
is we’ve gone around the world to find
Nigerians who want to come home. We’ve
gone to recruit at Harvard Business
School, at MIT, at Oxford, at London
Business School” -Company Founders
“For all of its consumer potential, the
evolution of Nigeria’s online retail industry
has been hampered by an absence of
payment infrastructure and a relatively low
penetration of credit cards. Jumia, “Africa’s
Amazon”, solved this by sending out its
products on bikes and collecting cash
payments” - How we made it in Africa

Content
69
Appendix
Concluding Thoughts

Concluding thoughts
70
 Africa represents one of the last frontiers in terms of underpenetrated emerging markets. Compared to
other emerging markets, we are in early days of understanding, prioritizing and exploiting the opportunity.
It is alluring because, for some, it represents a chance to enjoy a first mover advantage, an opportunity
that is not available in most product categories in other emerging markets any more. For others, it
represents an opportunity to continue to grow as other international opportunities become more
saturated.
 In any case, Africa’s story is a forward looking story of “promise”, as the factors needed to create and
sustain a market for international products are just beginning to come together and coalesce. In order to
truly emerge as a viable market, it still needs active investment from manufacturers in ways that are
unfamiliar and sometimes unheard of in other more developed nations. These investments can range
from investments in the supply chain to investments in distributors and in some cases, retailers, as well
as in new product developments.
 Furthermore, while there are a few commonalities across countries in Africa, the size and attractiveness
of the opportunity differs greatly by country. Africa needs to be seen as a set of individual countries from
which manufacturers and retailers must cherry pick opportunities, and not as an entire continent ripe for
entry. In order to succeed, manufacturers and retailers, must do their homework, tailor their strategies to
the unique characteristics of each market, accept and work with the realities of underdeveloped markets,
provide sufficient support and make a commitment for the long hall. As early research shows, rewards
are available for those who do the above.

Content
71
Appendix
Concluding Thoughts

Definition of LPI index
72
 The Logistics Performance Index is an interactive benchmarking tool created to help countries identify the challenges
and opportunities they face in their performance on trade logistics and what they can do to improve their performance.
The LPI is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers),
providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade.
They combine in-depth knowledge of the countries in which they operate with informed qualitative assessments of other
countries where they trade and experience of global logistics environment. Feedback from operators is supplemented
with quantitative data on the performance of key components of the logistics chain in the country of work.
Source:
(1) World Bank
Appendix

By 2020, Africa will comprise 17% of the world’s population and 3% of
the global GDP
Share of World Population Share of World GDP
73
60% 59%
15% 17%
14% 13%
11% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2020
Asia Africa America Europe Others
34% 32%
30%
27%
28%
33%
3% 3%
5% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2020
America Europe Asia Africa Others
Appendix

By 2050, three African countries will make the list for the top 12 most
populated countries in the world, when none made the cut in 1950
74
Note:
(A) Bangladesh didn’t exist as a country in 1950, Historical estimates made using modern borders
Source:
(1) UN: The Economist
Appendix
China
India
United States
Russia*
Japan
Indonesia
Germany
Brazil
Britain
Italy
France
Bangl
adesh
*
0 1 2
China
India
United States
Indonesia
Brazil
Pakistan
Nigeria
Bangladesh
Russia
Japan
Mexico
Philippines
0 1 2
India
China
Nigeria
United States
Indonesia
Pakistan
Brazil
Bangladesh
Ethiopia
Philippines
Mexico
Congo
0 1 2
1950 2013 2050
forecast
Most Populous Countries (in billion)

75
Lagos
Kinshasa
Cairo
Alexandria
Abidjan
Ibadan
Kano
Casablanca
Cape Town
Addis Ababa
Harare
Nairobi
Giza
Dar Es Salam
Dakar
Luanda
Tripoli
Algiers
Omdurman
Accra
Rabat
Conakry Kaduna
Khartoum
Douala
Durban
Johannesburg Pretoria
Soweto
Lusaka
Mogadishu
Brazzaville
Yaoundé
Maputo
Lubumbashi
Port
Harcourt
Free Town
More than 3Million
More than 2 Million but less
than 3 Million
More than 1 Million but less
than 2 Million
Population of African Cities
West Africa, led by
Nigeria, has the
maximum number of
cities with population
exceeding 1 million
The largest cities exist along the coast and are predominantly in West
Africa
Appendix
Source:
(1) 50 Largest Cities in Africa, The African Economist, December 2012 data
Large population cities in Africa (2012)

Most of the major markets in Africa have nearly 30% or more
population in the age bracket of 25-54 years
Age Structure
28%
43%
32%
42% 43%
28%
17%
21%
18%
19% 19%
20%
43%
29%
38%
33% 31%
38%
6%
4%
7%
4% 4%
7%
5% 3% 5% 3% 3% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Algeria Angola Egypt Kenya Nigeria South Africa
0-14 years 15-24 years 25-54 years 55-64 years 65 years and over
Appendix
Source:
(1) CIA World Factbook
129

Africa looks more like India than other emerging markets in terms of
the below additional demographic points of comparison
77
Region Africa Brazil China India Russia
Share of Urban
Population (2011)
Share of Working Age
Population
Above BoP Population
40% 85% 51% 31% 74%
55% 68% 74% 65% 72%
Source:
37% 89% 73% 31%
100
%
Appendix

Definitions of acronyms used in the presentation
78
 UEMOA: West African Economic and Monetary Union
 CEMAC: Central African Economic and Monetary Community
 ECCAS: Economic Community of Central African States
 COMESA: Common Market for Eastern and Southern Africa
 EAC: East African Community
 ECOWAS: Economic Community Of West African States
 SADC: Southern African Development Community
 AMU: Arab Maghreb Union
Appendix

For more information contact:
Kimberlee Luce
Senior Vice President
kluce@bostonanalytics.com

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