Julian Ebai, MD JETPLAY Consulting Ltd J li Eb i MD JETPLAY C lti Ltd Objectives Discuss the need to strengthen relationship and investing i Af i i ti in terms of b i in Africa i t d f business and credibility with various governments. To create awareness and make new contacts. Highlight some of the investment opportunities that exist that could result in the strengthening of commercial relationship with African businesses . Introduction The global economic crisis poses a host of short‐ Africa. term challenges for Africa It represents an opportunity to advance long‐ stalled reforms within the continent as well as globally. The crisis will allow African countries to build stronger, more equitable and more diversified economies. There is a need to increase Europe/West‐Africa relationships. p Introduction With five years until the 2015 deadline to achieve y 5 the Millennium Development Goals (MDG), UN Secretary‐General Ban Ki‐moon has urged y g governments to engage constructively in the p p g g p preparations for a high‐level meeting in September 2010. With the myriad of economic problems in most countries, West African countries how are the various investment opportunities marketed for meaningful business engagement with European and US companies? Major challenges faced by the West in Africa Understanding that Africa is a diverse continent with invest. different countries and different places to invest Lack of infrastructure in African countries countries. Inability to build a business relationship as it is difficult to identify potential partners in Africa. Foreign investors remain nervous about investing in a e s a a e o u y a spa e o e o . markets that are not fully transparent or well known. Investment opportunities in Africa Investment opportunities in Africa Africa ranks first in the world in the concentration of the ld’ largest accumulated reserves of gold, antimony, world’s l l d f ld i bauxite, chromite, cobalt ,diamonds, fluorspar, hafnium, manganese phosphate rock titantium vanadium manganese, rock, titantium, vanadium, vermiculite, zirconium. Africa supplies up to 6% of the world demand for aluminium, cement, coal, copper, graphite, iron ore, lead , steel and zinc Africa supplies up to 31% of the world’s demands for bauxite cobalt, gold, managanese, phosphate and uranium. Africa supplies up to 57% of the world’s need for chromium and diamonds. Investment opportunities in Africa The identified growth sectors in sub‐saharan Africa are as follows: Af i f ll Infrastructure investment opportunities Fi i l S i Financial Services Mining, resource , development and energy Communication and transport d Information technology Tourism Manufacturing Infrastructure investment opportunities The greatest challenge is trying to get more European and US companies in Africa to invest in infrastructure. p Some African countries like Congo DRC , Angola are ki ith China improving i f t t working with Chi on i i infrastructure. Ideally it will be good to see more European and U S U.S. companies involved in infrastructural development. Financial Services Africa is the fastest‐growing region in the world. While the rest of the world l hl h f h ld limps towards recovery, d Africa’s growth slipped from an impressive 5% % % in h k f h i average to 2.5% to 3% i the wake of the economic meltdown. Innovative methods to finance Africa’s growth are increasing and proving highly successful. Across the continent, microfinance, mobile banking, private equity and venture capital are g, p q y p spurring economic recovery. The opportunities in Africa are enormousenormous, especially in the unbanked segment. Financial Services Many of Africa’s 900 million consumers do not have bank accounts. Many of them are small, thriving entrepreneurs using mobile banking to leapfrog traditional financial channels. A h i i fi bil banking, Across the continent, microfinance, mobile b ki private equity and venture capital are spurring economic y recovery. In East Africa, the push for microfinance is gaining tremendous momentum and, in Kenya alone, savings and di i i illi credit organizations report 4.5 million account h ldholders, and there are potential sources of liquidity. Financial Services Ab % f h West Af i About 70% of the W l i live in l African population li i rural communities. The potential for mobile banking is huge. Microfinance still holds great potential in West Africa’s 1.5% 2%. small scale lending default is between 1 5% to 2% Foreign direct investment (FDI) is welcomed and indeed and, indeed, actively sought by virtually all African countries. African countries have made considerable efforts over the p ove t e vest e t c ate. past decade to improve their investment climate. Investment opportunities in Cameroon Investment opportunities in Cameroon The Republic of Cameroon is located at the heart of Africa and is the junction between Equatorial Africa in the South and tropical Africa in the North. Cameroon has been described as Africa in miniature, because of its unique geographical location and position in the continent. The Cameroon economy relies mostly on Agriculture, whose GNP. activities contribute a significant proportion of their GNP Cameroon is one of the largest cocoa and coffee producers in the , pp p world, with opportunities for this raw material to be processed in Cameroon before export. Starbucks now buys Coffee from Cameroon. Investment opportunities in Cameroon Th government of C The has actively b t d growth b t f Cameroon h ti l boosted th by promoting The Agricultural sector in the following ways: Withdrawing the state from the role of active participation in g p p regulating and creating professional agricultural organisations. Promoting self sufficiency in agricultural production and export surplus. surplus Opportunities for local and international investors. The Government is willing to make available huge tracts of secured g g land to local and foreign investors on a contractual basis Implementation of measures geared towards making the duties, opportunity very attractive like reducing custom duties in order to enhance investment and particularly private investment. Investment opportunities in Cameroon Investment opportunities in Cameroon The government is trying to provide adequate and appropriate infrastructure and boost economic and commercial growth in g the following ways: It has launched a huge program in the field of building roads Building new dams and new plants in order to increase energy and plants, water supply. Building a new sea port in Kribi and Limbe. The port in Limbe will constructed. cost 852 million dollars to be constructed The Cameroon Credit Company to build 1200 houses estimated cost $48 million dollars. Expansion to the Al h Alucam Al l d by Aluminium smelter owned b Mining Multinational Rio Tinto and the government. Estimated cost$ 115 milion. Revamp SONARA Oil Refinery (SOR) contract value $460 Million. Oil & Gas opportunities in Cameroon Oil & Gas opportunities in Cameroon The government through the National Hydrocarbons Corporation known as (Societie Nationale des Hydrocarbures‐SNH) in 2008 3.3 2008. registered a turn over of USD 3 3 billion in 2008 In August 2008 the oil‐rich Bakassi Peninsula has been ceded peacefully by Nigeria into Cameroon. The government is and will continue to work with environmental agencies, NGOs and the Oil industry and mobilise International organisations to see how best the unspoilt ecological beauty of Bakassi p is conserved and developed in an Eco‐Park and Eco‐Tourism for the inhabitants in the Green sector The country has large deposits of valuable minerals which are only now being explored or exploited Some of this development is being spear headed by a Canadian Mining company GEOVIC through its Cameroonian Subsidiary GEOVIC Cameroon. Oil & Gas opportunities in Cameroon Victoria Oil and Gas Plc an independent Oil and gas exporation company announced in November 2009 that it had found gas sands at its Logbada project Douala in Cameroon. Its shares rose by nearly 13 percent y y 3 p after this announcement. The future and prospect for exploration and exploitation in the mining sector should be an investment destination of choice for foreign investors . They are encouraged to explore other potentially huge deposits such as; gold manganese, rutile, sapphire, gold, manganese rutile sapphire uranium, platinium, chromium, zinc, copper, limestone, marble. d Oil & Gas opportunities in Cameroon UK sterling energy h the offshore N li has h ff h block in h Kribi‐ Ntem bl k i the K ibi Campo sub basin. It has identified four prospects with a cumulative potential in f billion barrels. excess of 1.5 billi b l China’s Yan Chang Logone Development Holding Company Ltd has signed a $62 million production sharing contract to explore g p g p f oil on the onshore in the North. for l h h h h Malaysia’s Petronas and Noble energy have a $119 million deal to explore oil Tilapia block offshore. p p France’s Total‐E&P and Swiss firm Glencore are operating separate offshore in the Rio del Rey basin. Cameroon has gas reserves estimated at over 500 billion cubic meters and Franco‐Belgian group Suez Global LNG Ltd has signed a memorandum to look at developing liquefied natural gas. g Mining in Cameroon GEOVIC has mining rights to seven Cobalt , Nickel Maganese Laterite deposit Cameroon issues two types of permits . Holders of exploration permit benefit of exemptions from registration fees, for mining operations safe for those l ti to lodging leases and rents. relating t l d i l d t Exemption from the following taxes; C tax Company t Tax on business profits Proportional tax movable capital incomes opo t o a ta ovab e cap ta co es Special charge on remuneration paid abroad There are opportunities for new licences and concessions pp for foreign investors in the Mining sector. Mining in Cameroon Mi i i C An Australian based International Company Sundance Resources will b exporting hi h grade I R ill be i high Ore from d Iron O f Mbalam Cameroon by 2012. The j t is ti t d to t $3.27 billi USD Th project i estimated t cost $ billion USD. The Mbalam Iron Ore Project is in close proximity to the Belinga Iron Ore Project in neighbouring Gabon being developed by the China National Machinery and q p p p p Equipment Import and Export Corporation. The US firm Hydromine, the United Arab Emirates’ Dubai Aluminium and India’s Hindalco have formed Cameroon Alumina Limited a Bauxite mining operation. With start up planned for 2013, the consortium plans to invest $5‐6 billion in a bauxite mining and refinery project in Ngaoundere in northern Cameroon. Mining in Cameroon H d i Hydromine i d signed an agreement with theih h Cameroon government to carry out feasibility di ih i developing h d l studies with a view to d l i i hydroelectric power. Cameroon boasts the second greatest potential to generate hydroelectric power in the continent, but much of the potential remains untapped. Cameroon’s long term plan is to be a regional g p g supplier of hydroelectric power and be able to be self sufficient in providing electricity to its p g y inhabitants and business. Investment Incentives in Cameroon The investment code is governed by Ordinance No 90/7 of 8 November 1990 and it aims to encourage and promote investment in Cameroon. It also guarantees free transfer for foreign investors of any proceeds their invested capital including fund remaining after liquidation. Companies whose finished or semi‐finished products are processed in Cameroon are exempted from export duties insurance or transportation duties when exporting these products. Th i l d f ili i i h f The companies are also granted export facilities in the form of deduction from their taxable income. Investment Incentives in Cameroon The Free trade Zone Regime other wise known as Industrial Free Trade Zone aims at promoting new investment. h i i l li for h The Financial policy f the year 2007 i i d instituted a two year tax exoneration program for those wishing to incorporate business in Cameroon. The Labour code encourages investment as Section 23 (2) of the said code states that contracts of employment will be freely negotiated. Cameroon is a signatory to many international treaties and conventions which are mutually beneficial. C i l i INTERPOL hi h k Cameroon is also signatory to INTERPOL, which seeks to curb international crime Tourism in Cameroon T i i C Foreigners or tourist who visit Cameroon are surprised by h if i h f its diversity, climate, l d the unifying strength of i di i li landscape, vegetation , wildlife , cultures and traditional architecture . I it many cultures C In its lt boast f Cameroon can b t of over 250 languages belonging to nearly all African linguistic families. French and English being the official languages. The variety of landscape is amazing from the desert of the g p sahel through savannah and tropical rainforest to beaches and mountains Tourism is still in its infancy stage in Cameroon there is a need for foreign and local investors to develop this sector. Tourism in Cameroon Th i i C ill id i f The tourism in Cameroon will provide a variety of tourism types C l l T i Cultural Tourism Sea‐side Tourism Safari (Regulated and controlled hunting and wildlife f ( l d d ll d h d ldl f photography) E t i Ecotourism Spot and Adverture Tourism R ll D i i i h h i Rally Driving in through terrain Conference or Convention Tourism Tourism in Cameroon There has been a significant increase in the number of visitors and tourist travelling to Cameroon, as a result h is demand f accommodation h l restaurants, there i a d d for d i hotels related transport services hence the need for the following: C t ti f Beach t Construction of B h resorts along th bl tif l the beautiful Campo –Kribi – Limbe coast line. Construction of medium class city hotels in major cities Construction of Town and Country hotels in regional capitals. and provincial capitals Construction of Motels or Rest stops, service centers g g along the high wayy Construction of Lake Resorts , i.e lake barombi Chartered Flights to Cameroon ,create a new Airlines. Agriculture in Cameroon The Cameroon Development Corporation (CDC) an Agro Industrial Enterprise created in 1947 solely owned by the Government. Its Share Capital is £21 Million and grows three tropical crops namely Rubber, oil Plams and Banana. The plantation’s total area is 37,783 hectares. CDC is in need of foreign partners fresh injection of capital to modernise and increase production. The Cameroon market is ripe for importation of processed agricultural products, juice, jam, dried fruits, etc. fruits canned fruits , spices etc Conclusion C l i In conclusion based on the facts highlighted b W t Af i d C i ti l above, West Africa and Cameroon in particular should be an investment destination of choice. Evidently Western investors should cooperate and work closely in collaboration with local partners. THANK YOU THANK YOU QUESTIONS?
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