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					                                                2 3 JUNE 2008




TRENDS IN GLOBAL   FINANCE AND INFRASTRUCTURE
                  The credit crunch has triggered the worst banking crisis for decades
                  with unprecedented write-downs and equity injections
                      Write-downs across major financials institutions ($bn)                                        Stock performance of major investment banks

                      Firm                                           Write-downs           Capital injections                               JP M (20)%             GS (23)%                CS (43)%            M S (52)%
                                                                                                                     140
                      Citigroup                                               42.9                       44.1
                                                                                                                     120                    M L (55)%              LB (56)%                C (62)%
                      UBS                                                     38.2                       29.1        100
                      Merrill Lynch                                           37.1                       17.9         80
                      AIG                                                     20.0                       20.0         60
                      HSBC                                                    19.5                        3.5
                                                                                                                      40
                                                                                                                      20
                      RBS                                                     15.2                       24.0
                                                                                                                       0
                      Bank of America                                         15.1                       20.7
                      IKB Deutche                                             15.1                       20.7              Jun-07        Aug-07          Oct-07          Dec-07         Feb-08        Apr-08      Jun-08
                      Morgan Stanley                                          12.6                        5.6
                      JPMorgan                                                 9.8                        7.8
                      Credit Suisse                                            9.6                        1.5
                                                                                                                    Overview of selected announced capital injections
                      Washington Mutual                                        9.1                       12.1
                                                                                                                    Date        Bank                      Fund                    Country                Cap. inject. ($bn)
                      Credit Agricole                                          8.3                        9.6
                                                                                                                    Dec-07      UBS                       GIC                     Singapore                             9.7
                      Lehman Brothers                                          8.2                       13.9       Dec-07      Merrill Lynch             Temasek                 Singapore                             6.2
                      Deutsche Bank                                            7.6                        3.2       Dec-07      WaMu                      Public                  USA                                   2.9

                      Wachovia                                                 7.0                       10.5       Jan-08      Citigroup                 GIC, KIA, others        Singapore, Kuwait                    12.5
                                                                                                                    Jan-08      Merrill Lynch             KIC, KIA, Mizuho        Korea, Kuwait, Japan                  6.6
                      HBOS                                                     7.0                        7.8
                                                                                                                    Jan-08      BoA                       Public                  USA                                  13.0
                      Bayerische Landesbank                                    6.7                          -
                                                                                                                    Feb-08      WestLB                    State                   Germany                               7.9
                      CIBC                                                     6.5                        2.9       Feb-08      Wachovia                  US investors            USA                                   3.5
                      Societe Generale                                         6.3                       10.1       Feb-08      SocGen                    Public                  France                                8.8
                      Barclays                                                 6.3                        9.7       Apr-08      Lehman                    Public                  USA                                   4.0

                      Mizuho                                                   6.0                          -       Apr-08      UBS                       Rights issue            -                                    15.1
                                                                                                                    Apr-08      WaMu                      TPG                     United States                         7.0
                      West LB                                                  4.9                        7.8
                                                                                                                    Apr-08      Wachovia                  Rights issue            -                                     7.0
AF R I C A




                      Dresdner Bank                                            3.4                          -
                                                                                                                    Apr-08      Citigroup                 Public                  -                                     6.0
                      Wells Fargo                                              3.3                        4.1       Apr-08      RBS                       Rights issue            -                                    23.7
                      E*Trade                                                  3.3                        1.8       Apr-08      Merrill Lynch             Public                  -                                     2.6
                      MBIA                                                     3.3                          -       Apr-08      Bank of America           Public                  -                                     4.0
                                                                                                                    Apr-08      Citigroup                 Public                  -                                     4.5
                      Bear Stearns                                             3.2                          -
                                                                                                                    Apr-08      HBOS                      Rights issue            -                                     7.9
SU B -S AHAR AN




                      National City                                            3.1                        8.9
                                                                                                                    May-08      Bradford & Bingley        Rights issue            -                                     0.5
                      Goldman Sachs                                            3.0                          -       May-08      AIG                       Public                  United States                        20.0
                      Canadian banks                                           2.4                          -       Jun-09      Lehman Brothers           Public                  United States                         6.0
                      Americas                                              170.5                       153.7       Americas                                                                                         153.7
                      Europe                                                200.3                       126.2       Europe                                                                                           126.2
                      Asia                                                    21.1                        9.5       Asia                                                                                                9.5

                      Total worldwide                                       391.9                       289.4       Total Worldwide                                                                                  289.4

                                        Source: FactSet, Bloomberg. Market data rebased to 100 as of June 6, 2008                                                                                                             1
                  Credit crisis impact on sub-Saharan Africa

                      Key causes and consequences of recent credit crisis

                      Causes                                                Consequences

                                                                                                             Impact on SSA
                                    Global SSA       Comment                 Credit writedown by banks              
                      Credit                        No mortgage           Profit taking by financial             
                      shock in                         market                 investors especially HFs
                      sub-prime
                                                                             Tightening of available credit to     
                      Heavy                         Could occur if         HF and more generally change in
                      balance                          sources of             risk tolerance
                      sheet                            funding are
                                                                             Loss of confidence in global          
                      leverage                         limited
                                                                              financial markets of Bears
                      Short-dated                   Most likely
                                                                             Activity of types of some IBs will    
                      funding                          challenge
                                                                              change re. more structured and
                                                       current
                                                                              toxic products
                                                       environment
                                                       does not lend         Heavier regulation                    
                                                       itself to LT
AF R I C A




                                                       funding
SU B -S AHAR AN




                                                                                                                             2
                   Sub-Saharan Africa is enjoying a growth spurt
                  Growth has averaged around 6% per year since 2004

                        Sub-Saharan Africa (SSA) has enjoyed strong growth for much of this decade, contributing to significant improvement in living standards in some
                         countries.
                        Buoyant commodity prices, improved governance and rising investment have underpinned this acceleration in growth rates. There are still,
                         however, important discrepancies between countries.
                        Oil exporters such as Nigeria and Angola have enjoyed the strongest growth rates, despite capacity constraints in some cases. Oil importers have
                         been protected in many cases by high prices for non-oil commodities. The laggards are resource-poor and landlocked, which impedes their market
                         access.

                                     Sub-Saharan Africa                         Latin America                    Emerging Europe                     Emerging Asia                     Global
                                                                                                                       8.1                             8.5                              8.6
                                                                                                           8.4                           8.8                                                             7.5
                                         6.9                              7.8           7.0                                                                               7.3
                                                       6.1                                          6.4                            6.5
                                                                   5.9                                                                                              5.7                            5.5
                                                                                              5.3                            5.3
                       3.8         4.0                       4.3                                                                                              4.1                           4.2
                                                                                3.2                              3.7                           3.5
                             2.2               2.8                                                                                                                              2.5                            2.8




                              1998-2004                            2005                             2006                       2007E                            2008F                             2009F



                             Net African Oil Exporters                      Net African Oil Importers                     The Big Four*                     Others
                                                                                                                                                                                      9.9
                                                                                                                                           8.8
                                                               7.7                                                                                                   7.7
AF R I C A




                                                                                        7.3            7.3                                                                                                 7.3
                                                                          6.1                                                 6.5                     6.1
                                                                                                                 5.6   5.3                                    5.8                           5.8    5.6
                        4.8                                                       5.2
                                   3.6    3.8    4.1
SU B -S AHAR AN




                                1998-2004                                   2005                                   2006                                 2007                                    2008F

                  *Big Four=South Africa, Algeria, Nigeria and Egypt
                  Source:AfDB, IMF, and JPMorgan estimates
                                                                                                                                                                                                                     3
                  Sub-Saharan Africa: Commodity price strength is a major positive
                  Resources make Africa a key beneficiary of strong Asian demand                Inflation, %oya

                        Inflation in SSA (excluding Zimbabwe) has eased from over 16%           60
                         in 2000 to 7.2% in 2007. Rising global food and energy prices
                                                                                                 50            Fragile
                         are creating problems for net importers, but the inflationary
                         impact has generally been contained by prudent                          40                                                 Low income
                         macroeconomic policy.                                                                                                      countries
                                                                                                 30
                                                                                                                                                                               SSA
                        The strength of commodity prices is a major positive for the                                    Oil exporters
                                                                                                 20
                         resource-intensive region. Asia’s industrialisation and
                         infrastructure development have been a key driver of demand             10
                         for commodities, and should deliver continued price strength,                                                          Oil importers
                         reinforced by portfolio diversification by institutional                 0
                                                                                                          97-02      2003          2004         2005        2006        2007     2008F
                         investors.
                                                                                                Source: IMF
                  Commodity prices remain elevated                                              Commodity prices to moderate in ’09 but hold well above ’05 levels

                         Jan 2002 = 100
                  700                                                                                                                    2005      2006          2007   2008f        2009f
                                 Crude oil               Precious metals    Industrial metals
                  600                                                                                 Gold           $/oz                445      604           697      914         843
                                 Cotton                  Cocoa
                  500                                                                            Platinum            $/oz                897     1,139          1,305   1,950

                  400                                                                            Aluminum           $/ton            1,895       2,593          2,664   2,494        2,389
AF R I C A




                  300                                                                             Copper            $/ton            3,506       6,669          7,286   6,913        5,425

                  200                                                                                 Silver         $/oz            7.30        11.50          13.40   16.20        15.20
SU B -S AHAR AN




                  100                                                                            Oil (WTI)        $/barrel           56.59       66.25          72.36   90.50        80.00

                    0                                                                              Wheat          $/bushel           3.18         4.02          6.40    8.31
                       2002        2003           2004    2005       2006   2007        2008
                                                                                                Source: JPMorgan
                  Source: S&P GSCI spot indices
                                                                                                                                                                                             4
                  Sub-Saharan Africa: External balances are looking healthier
                    Terms of trade have improved …                                                              … and debt relief has also attracted private capital

                           SSA is benefiting from a favourable external                                                Rising commodity prices and comprehensive debt relief have
                            environment. Import demand from advanced                                                     ignited private interest in investing in SSA, after several
                            economies has strengthened steadily in recent years,                                         decades of isolation. At about $22 billion, FDI continues to be
                            and China’s hunger for commodities has driven higher                                         the largest source of private capital inflows into SSA. While
                            prices as well as inward FDI. With the continued rise in                                     South Africa and the oil-exporters still attract about 80 percent
                            oil and other commodity prices, exporters of both oil                                        of the inflows, direct investment in the rest of SSA has been
                            and non-fuel commodities have experienced an                                                 steadily increasing; for 2006 it is estimated to have reached
                            aggregate improvement in their terms of trade.                                               $4.1 billion, with $1.2 billion going to landlocked countries.

                           However, a number of SSA textile exporters have come                                        Capital inflows into SSA remain relatively small, however,
                            under pressure as the United States and the European                                         because the costs of doing business there are still high by global
                            Union (EU) have phased out textile quotas.                                                   standards. On the World Bank’s ―ease of doing business‖
                                                                                                                         indicator, the average SSA country ranks more than 40 positions
                                                                                                                         below that of the average East Asian and Pacific country, and
                                                                                                                         nearly 30 positions below that of the average LatAm country.


                   Terms of trade (Index, 2000 = 100)                                                           Africa’s share of global FDI is finally rising again

                                                   Oil importers                                                10
                   250
                                                                                                                                              Africa
                                                                                                                 9
                                                                                        Oil exporters                                         Sub-Saharan Africa
                   200                                                                                           8                            Sub-Saharan Africa excluding South Africa
AF R I C A




                                                                                                                 7
                   150                                                                                           6
                                   Fragile countries
                                                                                                                 5
                   100                                                                                           4
                                                                          Low income countries
SU B -S AHAR AN




                                                                                                                 3
                    50                                 SSA
                                                                                                                 2

                                                                                                                 1
                     0
                                                                                                                 0
                           97-02         2003           2004       2005       2006        2007F         2008F
                                                                                                                  1970        1975     1980            1985          1990           1995   2000   2005

                   Source: IMF                                                                                  Source: UNCTAD
                                                                                                                                                                                                         5
                  Sub-Saharan Africa: Reserves high and debt now low
                   Government debt has fallen                                                        Record reserve levels reflect improved BOP balances

                         Sub-Saharan Africa’s external debt is estimated to have                              Foreign reserves for all of SSA are estimated to have reached
                          fallen to just 11% of GDP in 2007. This represents a 30-year                          an all-time high of US$137 billion in 2007, raising import
                          low, and is the result of rapid growth, comprehensive debt                            coverage to 5.7 months. While this is not a high level of
                          relief, and debt repayment by Nigeria, Angola, Malawi and                             coverage by global standards, it comes from a low base. The
                          others. Debt relief has been delivered through the enhanced                           improvement reflects positive terms of trade effects and the
                          HIPC initiative and MDRI, as well as bilateral deals in                               policy decision to build precautionary levels of FX reserves to
                          countries such as Nigeria.                                                            guard against balance of payments risks, as well as limit the
                                                                                                                negative impact of currency appreciation on competitiveness
                         17 countries have so far benefited from MDRI, and eight                               outside the resource sector.
                          more could qualify once they reach the HIPC completion
                          point. This latter group includes many of the most fragile                           Oil exporters and South Africa have led the way in building
                          economies, where debt ratios remain uncomfortably high.                               up reserve levels. Other SSA countries have kept reserves
                                                                                                                roughly stable as a share of imports.

                   External debt to official creditors (% of GDP)                                    FX reserves by region, US$ bn

                   150                                                                                          Africa                                                                                                  2,874
                                                            Oil importers                                       Sub-Saharan Africa                                                              2,556
                                 Fragile countries                                                              Sub-Saharan Africa excluding Nigeria and South Africa
                                                                             Oil exporters                      Latin America
                                                                                                                                                                        1,974
                   100                                                                                          Emerging Europe
                                                                                                                Emerging Asia                   1,604
AF R I C A




                    50                                                      Low income
                                                                                                                         786
                                                                              countries
                                                                                                                                                                                                        310
SU B -S AHAR AN




                                                                                                                                                       209110                   254
                                     SSA                                                              75   40
                                                                                                                               160 83                                             137                     167

                     0
                            97-02      2003          2004     2005          2006     2007F   2008F         Avg 1999-2004                2005                    2006                    2007E                   2008F
                   Source: IMF                                                                       Source: JPMorgan


                                                                                                                                                                                                                                6
                  Sub-Saharan Africa: Investor interest is climbing rapidly

                   EMTA trading volumes in frontier markets are climbing                                       SSA has led outperformance in frontier equity markets

                    70     US$bn, 4-q sum
                                                                                                               900
                    60                                                                                         800
                                            Sub-Saharan Africa           Eastern Europe
                                                                                                               700                                    Nigeria
                    50                      MENA                         Latam & Caribbean
                                                                                                               600                                    Kenya
                    40                      Asia
                                                                                                               500
                                                                                                                                                      S&P/IFCG Frontier Markets
                    30                                                                                         400
                                                                                                               300
                    20
                                                                                                               200
                    10                                                                                         100
                     0                                                                                            0
                      2000         2001      2002       2003       2004        2005         2006      2007         2000        2001        2002     2003   2004         2005         2006        2007      2008

                   The region has shared in private equity’s enthusiasm for EM                                 Private equity activity in EM - 2007 vs plans for 2012
                   Funds raised for EM private equity continue to climb                                                 % of respondents
                                                            Sub-                             Multi-             100%                89%             87%                     2007                  2012
                               Emerging   CEE/     LatAm &     Saharan              Africa/ region                90%         79%
                     US$m        Asia     Russia Caribbean     Africa       MENA      ME      EM      Total       80%
                        2003     2,200      406         417                           350      116     3,489      70%                                                 64%
                                                                                                                                              61%
                        2004     2,800    1,777         714                           545      618     6,454      60%
                                                                                                                                                                                                           48%
AF R I C A




                        2005    15,446    2,711       1,272       791       1,915             3,630   25,765      50%
                        2006    19,386    3,272       2,656     2,353       2,946             2,580   33,193                                                                              35%
                                                                                                                  40%                                           31%
                   H1 2007      11,549    3,611       1,354       592       1,816             2,127   21,049
                                                                                                                  30%                                                                               20%
                   Source: EMPEA. Africa/ME reported together in 2003-04.
                                                                                                                  20%                                                               11%
SU B -S AHAR AN




                          EMPEA reports US$592m raised for SSA in H1 2007, but                                   10%
                           another two large closes for pan-African funds in July                                  0%
                           totalling over US$1.8bn. 2007 as a whole looks to have set                                     Emerging Asia      CEE/ Russia        LatAm &            Middle East          Africa
                           new highs, and flows have continued in Q1 08.                                       Source: EMPEA, 2007 Surv ey                    Caribbean



                                                                                                                                                                                                                  7
                  Significant infrastructure gap across sectors
                         Significant infrastructure gap – Ideal funding profile

                          The total infrastructure spend over the next 10 years in sub-Saharan Africa is estimated at
                          approximately US$1 tn. Key areas of deficiency include power, energy and transportation
                          (especially roads and rails)


                         Strategic Countries (e.g. China/ Russia)                                    15%



                         DFIs (e.g. World Bank, IMF, AfDB)                                           10%



                         Local Financial institutions                                                5%



                         Foreign Direct Investments                                               25% - 35%
AF R I C A




                         Government                                                               25% - 35%



                         Foreign Financial Institutions                                              10%
SU B -S AHAR AN




                                                                                                                        8
                  Challenges/Opportunities

                                        Development of capital

                                        Key Reference points required including - Risk free rates, yield curves etc
                            Capital
                            Markets     Liquidity

                                        Depth of products


                                        Necessary to create a highly attractive environment for PPP
                                          Legal framework
                                          Regulatory framework
                                          Government support – for top priority projects only
                               PPP          —   Subsidy/tariffs/tax breaks
                        Environment         —   Co-investment 5—10%
                                            —   Guarantees
                                            —   Incentives to local banks – including tax breaks and lower liquidity limits.




                                        Ease of doing business must improve

                                        Transparency index must improve
                            Business
AF R I C A




                        Environment     Anti-corruption

                                        Reality check on cost benefit for genuine investors
SU B -S AHAR AN




                                                                                                                               9

				
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