Zimbabwe Investment Climate

THE 3rd ANNUAL TRADING AFRICA SUMMIT 6 - 7 NOVEMBER 2013
ZIMBABWE INVESTMENT CLIMATE:

THE HYPE, THE MYTH
OR REALITY
THE MYTH
THE REALITY
ECONOMIC TRANSTION
SSA Cumulative Real GDP - rebased

124.00 122.00 120.00
118.00
116.00
Real GDP Growth
114.00 112.00 110.00

ZIMBABWE
SOUTH AFRICA
SADC
108.00
106.00 104.00 102.00 100.00 2009 2010 2011 2012
Source: AFDB Dataportal
COST OF CAPITAL
African Eurobond Yields

NAMIBIA 10.00 SENEGAL GABON ZIMBABWE**
9.00
8.00 7.00
6.00 % YTW 5.00

4.00
3.00
2.00 1.00 0.00
10-2012
12-2012
02-2013
09-2012
11-2012
01-2013
03-2013
04-2013
05-2013
06-2013
07-2013
08-2013
09-2013
10-2013
COST OF CAPITAL
African Eurobond Yields

ZAMBIA 10 NIGERIA GHANA ZIMBABWE** RWANDA
9
8 7
6 % YTW 5
4
3
2 1 0
01-2013
05-2013
09-2013
09-2012
10-2012
11-2012
12-2012
02-2013
03-2013
04-2013
06-2013
07-2013
08-2013
10-2013
COST OF CAPITAL
African Commercial Bank Lending Rates

Botswana
35% 30% Commercial Bank Lending Rates 25%

Local currency lending rates Zim in USD Double digit rates throughout Africa
Kenya
Mozambique
Namibia Nigeria Zambia
20%
Zimbabwe
15% 10% 5% 0%
Source: World Bank Development Indicators & Reserve Bank of Zimbabwe
2010
2011
2012
CREDIT RISK IN ZIMBABWE

Commercial Bank Weighted Average Lending Rates
35% 30% 25% USD Lending Rate 20% 15% 2010 2011 2012 2013
10%
5% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Reserve Bank of Zimbabwe
LIQUIDITY DEMAND IN ZIMBABWE

Zimbabwe Core Banking Sector Statistics
14 000
12 000 10 000 USD Millions
8 000
6 000 4 000 2 000 -
Deposits Loans Est. Liquidity Demand
Jan-09
Dec-10
Dec-11
Dec-12
Dec-13
Latest*
Source: Reserve Bank of Zimbabwe
FOREIGN DIRECT INVESTMENT WHO IS INTERESTED AND IN WHICH SECTORS?
Zimbabwe Investment Authority Approvals (Millions USD) by Sector 2009 - 2011

$450 $1 606 $383 $765 Agriculture Construction Manufacturing $165
Mining
Services Tourism
Transport
Source: Zimbabwe Investment Authority (ZIA)
$5 130
Zimbabwe Investment Authority Approvals (Millions USD) by Country 2009 - 2011

Nigeria
$577 $662
$229
China
Isle of Man BVI RSA $3 640 Mauritius
$1 128 Cumulative Total Investment Approvals 2009:2011: USD8.5billion

$1 811 Top Six Countries: USD8billion
CONTINUED INTEREST IN ZIM EQUITIES
Foreign Trade Participation on ZSE

70% 60% 50% 40% FOREIGN BOUGHT 30% FOREIGN SOLD
Foreign % Participation
20%
10% 0% 2009 2010 2011 2012 2013
LAND REFORM PROGRAMME
Resuscitation of Zimbabwe Agriculture
Agricultural output ('000 tonnes) 2000 Maize Tobacco(mkgs) Beef Cotton Sugar Soya beans Horticulture Dairy( m litres) 1,545 198 71 304 586 99 63 153 2008 575 45 90 235 298 48 60 46 2009 1,140 58 93 226 259 115 45 40 2010 1,300 123 101 260 350 135 50 45 2011 1,452 133 94 250 372 84 45 63 2012f 968 140 94 350 430 71 51 65 2013f 1,400 165 94 283 450 115 54 70
Source: Min. of Finance Zimbabwe, FAO
Small Scale Agriculture Reform

400 350 300
250
200 150 100 50 Cotton Production (rebased) Tobacco Production (rebased)
0
2005 2006 2007 2008 2009 2010 2011 2012f 2013f
Large Scale Agriculture Reform

300
250
200
Maize Production (rebased)

150
Sugar Production (rebased) Soya bean Production (rebased) Wheat production (rebased)
100
50
Source: Ministry of Finance, FAO

0
2005
2006
2007
2008
2009
2010
2011
2012f
2013f
INDIGENISATION: MYTH VS. REALITY
Indigenization vs Investment Opportunity

Econet Zimplats (87% owned by Impala Platinum) Delta Zimbabwe (40.1% owned by SAB Miller)
$807
Cumulative Capex in USD (millions)
$657
$507
$663
$443
$291 $213 $167 $208 $131 $44 0 2010 2011 0 2012 0 2013 0
$91
ZIMBABWE INVESTMENT CLIMATE: THE HYPE, THE MYTH OR REALITY?
POLITICS: Hard Decisions can be taken

LAND REFORM: Will ultimately be a success
INDIGENISATION: Is not specific to Zimbabwe

OUTLOOK:Reform is a process

Zimbabwe Investment Climate

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Zimbabwe Investment Climate

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THE 3rd ANNUAL TRADING AFRICA SUMMIT 6 - 7 NOVEMBER 2013