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Godfrey Mutizwa: Hello everybody and welcome to this edition of
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the In-Market Insights podcast brought to you by Standard Bank.
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My name is Godfrey Mutiswa.
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As we race towards the close of the year, we look back on the year that was.
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We look at the unique market trends and themes that defined 2024.
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Without doubt, one of the big stories emerging out of the Africa
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region was the disinflation picture.
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According to the International Monetary Fund, inflation across
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the regions remains in double digits in a third of the countries.
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So what has been the response of monetary authorities to all of this?
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Joining me for a discussion today is Anne Aliker, Head, Plan Coverage CIB.
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And Godfrey Mwanza, Economist, Africa Regions.
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Gent and lady, welcome.
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Anne Aliker: Thank you.
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Godfrey Manzwa: Thanks for having us.
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Godfrey Mutizwa: Let me begin with you, Godfrey.
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I like to say that Africa is not a country.
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Many people laugh at me.
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Godfrey Manzwa: Absolutely not.
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I think you're right when you say Africa is not a country.
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That's more sort of applicable in the way that inflation is very disparate.
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The experience of inflation this year and going into next year is very
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different in East Africa compared to West Africa compared to the
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southern parts of Africa as well.
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Overall, inflation is declining compared to last year, and will
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continue to decline, next year as well.
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The IMF is right in that.
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But when we look at East Africa in particular, inflation is very low.
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Very, very controlled, very, very subdued inflation.
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In the case of Kenya, obviously the sort of industrial hub of East
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Africa, inflation is sort of, you know, over decades, over the last
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decade, it's the lowest that it's been.
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I think there was a last print of 2.7 percent year-on-year.
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That's very, very low inflation.
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And the monetary authorities are responding with lower interest rates.
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Whereas if you look at West Africa, both the big, markets we
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look at there, Ghana and Nigeria.
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Both have very high double digit inflation.
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In the case of Nigeria, over 30 percent because of the reforms that
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have happened over the last 18 months.
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And we're not seeing a decline in interest rates there from the monetary authorities.
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We think we'll see that, in maybe the first half of 2025.
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Same thing with Ghana, right?
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Inflation is still quite high, above 20%.
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The process of disinflation is yet to really take hold in those markets.
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Godfrey Mutizwa: Yeah.
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I want to talk to Anne about how companies are responding to this,
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but perhaps before we bring Anne in.
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Let's talk a little bit, as you said, some of the monetary policy authorities have
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tightened, but just give us, if you like, a little bit of, picture in terms of how
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they are tackling this inflation, which in parts of the continent remains stubborn.
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Godfrey Manzwa: So that's a good question because, you know, what matters also
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is not just that there's inflation, but also what's causing that inflation.
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So, in the South, for instance, what's caused inflation is
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essentially a supply shock.
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You've had a really bad drought, in countries like Zambia,
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Botswana, in Malawi as well.
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So when it comes to a supply shock, you know, Central Bank can increase rates.
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But the only thing that will really long term fix that kind of inflation is
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increase in supply of, you know, what the shortage is and in the case of the
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South, it's electricity and food, right?
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Affected by the drought and hydroelectric power.
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In East Africa, the inflation has been stopped.
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As I said, inflation is quite low in East Africa at the moment, and, interest rates
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are actually going to be coming down.
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Godfrey Mutizwa: Yeah, absolutely.
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So, Anne, let's talk about how companies are responding to all of
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this, given, the difficulty, in parts.
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For instance, if you look at Southern Africa, part of the reason why we're
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seeing high inflation and therefore perhaps central banks being hesitant
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in terms of taking interest rates down is because this is externally driven.
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Anne Aliker: Yeah, it's always interesting to listen to discussions
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around inflation and interest rates, because at the end of the day, it's how
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it affects the companies on the ground.
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Because all companies in essence, they produce goods and services, and
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they sell it into the consumer base.
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So looking at inflation, there are some companies who will consistently operate
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far more effectively than others.
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But the inflation has actually impacted the purchasing power.
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So what we see from our clients is constrained ability to produce
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the same good at a price point that the consumer can buy that.
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So even though in East Africa inflation is coming down,
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Godfrey, our clients see that too.
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The reality is it is after a prolonged period of time.
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That has impacted the purchasing power of the consumer, and that
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inevitably means that clients have to be far more agile and creative
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in reducing the cost of production.
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And that sort of, if you're in Zambia, quite nicely segues into the challenge
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around availability of electricity and the need to use alternative
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sources of power, which in and of itself increases the production cost.
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Godfrey Mutizwa: Yeah.
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And when you look at that picture, is this something that is uniform
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across the continent in terms of how companies are navigating this?
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Anne Aliker: In terms of how companies are navigating it?
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No, it's not uniform because the situation isn't uniform across the continent.
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If I look at West Africa, persistent high inflation has been a real challenge.
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Some companies, however, have been able to grow despite this.
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It means what has happened is that is they are effective operators.
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They're extremely efficient.
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Generally, they have the scale.
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So what has happened is they've been able to take market share from other companies.
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That reduces the competitive aspect.
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So that'll be interesting to see in '25 and '26.
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But, the better off operators have actually grown and have
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grown quite significantly.
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Godfrey Mutizwa: Let's talk the macro picture in terms of the
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countries in particular, when you look at foreign currencies.
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2024 was notable for two big devaluations.
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There was one in Nigeria, I think at the beginning of the year, and
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then we also had Ethiopia come in.
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Give us again a little bit of a granular detail, if you will, Godfrey, in terms
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of the situation that you're seeing as far as currencies are concerned
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and how obviously, they're impacting companies as well, and will come in.
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Godfrey Manzwa: Yeah, absolutely.
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I mean, there were big devaluations, as you mentioned, Nigeria in February, 2024.
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When the new government, they're not so new now, just over a year
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now, came in middle of last year.
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So there was a devaluation middle of last year, a devaluation early this year, and
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you've seen quite a dramatic shift in the policies that govern the way foreign
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currencies managed in that country.
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We think it's positive.
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It is one of those things that does come with pain in the short term and
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in the long term the hope is that that's going to create a much more
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sustainable foreign currency market.
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You're already seeing increased in liquidity, dollar liquidity, dollar
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supply from foreign investors.
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And a much more two way market than what you saw before.
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Overall, on the African continent, you know, one thing that's positive
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is that this year you've seen lower current account deficits.
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And your current account basically just is how the external balance
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of a country is accounted for.
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And that's really comprises of trade and, in the case of countries like Nigeria,
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a big part of that is also remittance.
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Overall, the current account in a country like Nigeria has improved
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quite dramatically, remittance flows has increased the oil output
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has also increased, well, oil export revenue has also increased.
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So the situation in a country like Nigeria on the current account is improving.
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You're seeing that across a lot of different countries
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as well on the continent.
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In the case of Ethiopia, that was really dramatic.
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It's a historic devaluation.
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The embrace of more free market liberal pricing of currency and other
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things in the economies was a real change of direction for that country.
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We're hopeful long term that also, again, it creates a much
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more sort of sustainable market.
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Godfrey Mutizwa: Yeah.
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And I imagine, Anne, that increases costs for companies, right?
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One, the challenge of finding foreign exchange.
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And then secondly, also, of course, the issue of dealing with costs that
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are unique in their own markets.
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Anne Aliker: Yeah.
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I think really the story for 2024 has been some easing of availability
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of US dollars, which is, I think what Godfrey was talking about.
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2023 when we looked at Nigeria or Kenya, to some extent, Tanzania, a little bit in
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Malawi, it was actually the availability of dollars that was a real problem.
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So that has eased in 2024.
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So whilst the cost in some markets, Nigeria, was much, much higher in
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Kenya it came down, you know, so in Kenya, if you recall, they were
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able to, raise another euro bond.
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The market was far more accepting of that, availability
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of dollars was more prevalent.
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So that reduced the import, the cost of imports in Kenya.
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And if you think of the continent as a whole, so whilst Africa is not a
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country, Godfrey, across the continent, we still are primarily import dependent.
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So the cost of the dollar is quite important in terms of the production
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of goods and services, and the price at which it is sold to the consumer.
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But availability; far easier on the continent overall.
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Still some pockets of challenges, Tanzania is still a challenge.
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It comes through eventually, but we would like to see that ease.
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From a companies perspective, what has been the actual impact?
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And it's useful to look at the continent in the regions.
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When I look at East Africa, East Africa trades quite a
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bit by itself, within itself.
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So whilst the traditional view, it's Kenyan companies exporting into Uganda
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and Tanzania, we do see a lot more of the Tanzanian companies exporting into Uganda.
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And increasingly a growing quiet confidence from Ugandan
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companies, both exporting into Kenya and to some extent into DRC.
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So the Ugandan companies who historically have not exported a great deal into
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Kenya, for them the availability of dollars has really surprised them.
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Because that's not an issue in Uganda.
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Now, those are sort of the practical challenges and limitations
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we've seen on the ground.
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Godfrey Mutizwa: Yeah, and do you want to come in?
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Godfrey Manzwa: Sure, yeah, I mean, it's such an important point that Anne raises.
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Tanzania was actually a very interesting surprise for a country like Zambia
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as well, trading into Zambia as well.
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Not just to sort of traditional East African trading partners.
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So, you know, El Nino and the drought that caused the output of, you
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know, all Maize, and other sort of food stuffs in the southern region.
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In Zambia and in and in Malawi we had a, in Zambia the harvest was
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about 1.5 million tonnes of maize, as opposed to 3.2 million tonnes
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in 2023 because of the drought.
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A lot of that gap was met by imports from Tanzania.
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Right?
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There was a government to government deal, where Zambia was importing 650,000
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tonnes from Tanzania, and Tanzania had a bumper harvest with estimates
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between 8 and 10 million tonnes.
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So, I think that's a very important point in terms of, you know,
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trade between countries, not your traditional just the East African
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community in the case of Tanzania, but also to the South on what happens.
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Godfrey Mutizwa: Yeah.
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I was going to say, actually, East Africa is unique in many ways, isn't it?
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The most integrated region probably out of all the major regions
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across the African continent.
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And then also in terms of growth, the growth engine for the African
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continent for the past few years.
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I will talk about the growth picture, but I wanted to know from you,
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Anne, when you look to West Africa.
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How has that picture been in terms of how companies have been coping?
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Anne Aliker: Yeah, it's Nigeria being the largest economy has
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continued to be a challenge.
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But if I think of the story of Nigeria, if you go back three, four
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years, there's been significant focus on backward integration.
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And if we recall, the central bank in Nigeria for a long time was
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actually making available relatively cost effective sources of funding.
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So companies could focus and invest in an ability to backward integrate.
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So that to some extent reduces some of the pressure.
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But what it really did is, perhaps concentrate it to particular players.
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Nigeria, the devaluation of the Naira has really impacted companies.
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Godfrey Mutizwa: Yeah, and we've seen it in the results, right?
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Anne Aliker: We've seen it in the results.
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You see it on the ground.
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You feel it when you speak to the consumers.
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You feel it when you're speaking in particular to the
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fast-moving consumer companies.
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Consumer packaged goods.
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They have had to be extremely creative, and I think it has made some of the
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more, the foreign investors think very, very deeply and keenly as to what they
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want to do in a particular market.
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Godfrey Mutizwa: Yeah, we've seen a few exits, right?
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Anne Aliker: We have seen a few exits, which to some extent were a surprise
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because those companies have been in Nigeria for a very long time.
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But ultimately, people make a call based on what they expect going forward, based
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on the volatility and unpredictability that impacts their businesses.
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Tough picture.
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I want to talk about happy things.
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Let's talk about growth.
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I think often we talk about Africa and we talk about our challenges, but we forget
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that we've got some good story going.
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And one of the good stories we've got going is on growth.
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The IMF says in Sub-Saharan Africa.
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For instance, we're home to nine of the world's top 20 fastest
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growing economies this year.
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I can mention Rwanda, Ethiopia, Senegal, etc.
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Godfrey, give us the granular detail.
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Godfrey Manzwa: Sure, absolutely.
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It is very much a positive picture.
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I think, just to take a step back, if you look at the sort of last 24 years,
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sort of the first 24 years of the century, we've had kind of a two-speed
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Sub-Saharan African growth picture.
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In the first 14 years, we're growing something like three times, you know, per
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capita, faster than the rest of the world.
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We slowed down a lot between 2014 and now, and we're picking up again.
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There was a period when Africa, Sub-Saharan Africa, was the second
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fastest growing region in the world.
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Obviously, East Asia, particularly China, was number one, and we lost
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that silver medal, if you will, sort of between 2014 and more recently.
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But we're getting back that mantle and going forward over the next five years.
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The expectation is that Africa will become again the second fastest
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growing region in the world.
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Godfrey Mutizwa: Yeah.
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I want to know who is growing.
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And why?
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Because often when you look at the continent, there's a distinction
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between the resource rich countries and countries without natural resources.
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What are we seeing this time around?
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Godfrey Manzwa: I think that story, by and large, will continue.
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The reason why you have resource dependent countries growing slower, is because
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they sort of focus all their energy and resources towards that resource
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as opposed to being more diversified.
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So in East Africa, we keep on going back there.
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It's just generally more diversified.
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And the thing with economics, like, you know, like your savings account,
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there's an element of compounding, right?
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So you already have a pretty diversified economy.
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You can grow in sort of multiple dimensions.
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If you already have a, if you have a very concentrated economy, it's
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harder to diversify at the beginning.
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So I think in the short term, the short to medium term, I think growth will still
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be mostly driven by the more diversified economies, particularly in the East.
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The countries that you mentioned in the West, countries like Senegal,
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quite diversified, now add oil to it.
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Ivory Coast, quite diversified, a lot of infrastructure investment going on there.
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Yeah.
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One of the interesting points that's been made is that while you are
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seeing this very happy picture of accelerating economic growth, it's
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in some of your smaller economies.
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The big guys are laggards.
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So your Nigeria, your South Africa, for instance.
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But I want to know if that's a picture that's mirrored on the company.
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Anne Aliker: It's an interesting question.
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Actually, when you asked about happy, happy themes, and do we see growth as one?
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Most definitely.
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And where does it play out for me?
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Ultimately, at the end of the day, I run a client business.
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So unless my clients are growing, unless we can see sectors and geographies
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where the clients are actually growing, my business wouldn't grow.
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But we don't talk about a lack of growth opportunity for us,
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which means we're seeing it in our client base, in particular sectors,
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and in particular geographies.
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So where am I seeing some growth?
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You talked about exits a little bit earlier, but those exits were
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not companies simply abandoning their businesses and moving away.
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They were selling their businesses to entities that have the
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capability and ability to operate effectively in that market.
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And those are companies that have actually grown year on year, if
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I look back the last 10 years.
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And I see no reason why they would slow down.
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So certainly within the consumer packaged goods.
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Fast moving consumer goods.
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We're seeing domestic businesses grow quite well.
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It makes sense.
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They're close to the client.
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They're close to the consumer.
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They adapt.
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They are more agile.
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We're also seeing a lot of growth in the sectors that are necessary
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for everybody else to grow.
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So, Godfrey spoke a little bit about energy earlier, so we're talking
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about energy in South Africa.
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Yeah.
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And that's been a fabulous result.
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Godfrey Mutizwa: I want to talk a little bit about that.
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Anne Aliker: I mean, it's, it's been incredible.
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And I think everyone in South Africa should be proud of themselves.
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Godfrey Mutizwa: What about the regions?
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We speak about East Africa dominating the integration in the region being an
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example for the rest of the continent.
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Anne Aliker: The regions.
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So East Africa is very integrated, but if we think about scale.
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Scale in South Africa is much larger.
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Scale in Nigeria is larger.
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I think with the growth that we're seeing in Tanzania, some nascent
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growth in Uganda, and I say that with a smile because I am from
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Uganda, so it's good to see it.
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We can start to see scale potentially coming into East Africa.
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East Africa has always been a fairly consistent market.
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Good growth.
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diverse economy.
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Some predictability.
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But the question has always been around scale.
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And that's a question the external investors ask us.
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But on the ground, you have a lot of domestic businesses
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that are starting to grow.
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And that's always good and useful to see.
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Godfrey Mutizwa: Yeah, absolutely.
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We, of course, when you, while we ask for foreign investors to come in, local
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investors must be leading the charge for that growth to be sustainable.
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Let's talk about where the money is going.
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You spoke about energy.
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Anne Aliker: Where is the money going?
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Money is going into energy.
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Money is going into infrastructure.
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Money is going into strategic minerals.
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I don't think we can shy away from that, but I think it's a positive story.
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I don't think it's a negative story.
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Often I hear people talking about, oh, well, the external investors
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only want to come in, invest in the mines, be it in DRC or Angola or South
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Africa and take the goods abroad.
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Yes, that is part of it, but with that investment comes
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investment in infrastructure.
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And within, with investment in infrastructure comes the ability to move
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goods, be they the strategic minerals or actually fast moving consumer goods, which
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the people on the ground actually desire, need, and are a great signal of growth.
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I mean, if you look at the DRC in particular, you look at
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Kinshasa, Kinshasa is a huge city.
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And often we forget it's going to be one of the largest
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cities in the world by 2030.
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That means it is a city that is creating demand, not just from companies within the
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DRC, but from the surrounding companies.
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Godfrey Mutizwa: Yeah, I want to talk about the DRC opportunity, but a
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little more colour, please, Godfrey.
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I want you to put on your economist hat and talk a little bit about
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the energy story because we know Africa is energy hungry, right?
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600 million Africans still have no access to power.
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We've seen big initiatives, including one from the African Development Bank
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working together with the World Bank.
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Let's talk a little bit about, where that money is going in terms of energy.
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Is it traditional sources?
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Or are we talking here about the renewable story truly, truly, truly
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beginning to attract the kind of money that we needed to grow it?
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Godfrey Manzwa: Yeah, it's a very, very important theme.
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When it comes to climate change and the impact we have seen, you
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know, the drought have on the South that I mentioned earlier, and how
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that has crippled hydroelectric power generation in the South.
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One thing that I've seen is an increased willingness to invest
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in things like thermal coal.
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So, solar is going to be a theme, thermal coal is going to be a theme, and anywhere
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where you can get investments to increase electricity output is, I think, what
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you're likely to see going forward.
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Because that is, from a sort of macroeconomic growth perspective,
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growth is population growth multiplied by some kind of productivity factor.
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And nothing enhances productivity quite as much, particularly from
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the level where we are at on the African continent than electricity.
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But just to touch on something that Anne said as well, in terms of investment
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in strategic minerals, that's also extremely important in terms of the
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model of the kind of funding that we get.
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So for instance, we've got a lot of debt from China and other sources sort of in
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the last sort of decades of pre Covid.
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A lot of that was dollar debt, right?
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It paid for infrastructure, but not necessarily infrastructure
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that earned you dollars.
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Right.
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So if you build a road, you know, from the airport to town, that's great for
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commuters, but it's not necessarily going to increase your dollar earnings.
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But you borrowed it, you borrowed dollars for it.
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But for the strategic minerals, if you are, even if governments borrow
23:35:
in foreign currency to build rail, for instance, to extract those critical
23:40:
minerals that you can then export, then that actually is more direct.
23:45:
It has more economic logic.
23:47:
Projects like that.
23:48:
Godfrey Mutizwa: Absolutely.
23:49:
So, our story around infrastructure is well known.
23:52:
I've grown tired of how big that is.
23:54:
Is that a hundred billion?
23:56:
Is that three hundred billion in terms of deficits every year that we can't find?
23:59:
And are we beginning to see private capital looking at infrastructure?
24:04:
Anne Aliker: So the quick answer is yes, but in practical terms, whilst
24:09:
there is a lot of investment in infrastructure on the continent, the
24:12:
reality is the deficit is significant.
24:15:
And so we need far more of it.
24:17:
And we need the governments to continue to get involved.
24:20:
But where are we seeing this investment from the private sector?
24:25:
Ports, and ports are a really important thing.
24:29:
Logistics, and logistics, at the end of the day, is the way in which we move
24:34:
goods and people across the continent.
24:37:
Still a lot more to be done within that.
24:40:
And when you come to talk about the DRC, I think we should talk about the
24:43:
infrastructure for the strategic minerals.
24:45:
Because we will eventually connect East and West.
24:48:
Finally.
24:50:
Which will also, I think, lead to significant development in Central,
24:58:
Southern Central Africa, and here I'm thinking of countries such as Zambia.
25:02:
But we are seeing private sector funds, infrastructure funds that have a long
25:08:
life investing in infrastructure assets.
25:12:
And that's really important because the life of the fund is consistent with the
25:19:
sort of returns one can generate from the infrastructure and the financing, the
25:26:
appropriate financing that's required.
25:27:
Godfrey Mutizwa: You remind me of a conversation we used to have
25:29:
years ago about the fact that Africa is not short of money.
25:35:
We have got pension funds that are invested in overseas markets where they
25:40:
are earning, sick returns when the opportunity at home is quite limited.
25:47:
Anne Aliker: My personal passion is actually what I call the trapped
25:52:
capital in the various pension funds.
25:54:
So I think we're all familiar with South Africa.
25:56:
South Africa is a large formal economy that actually works incredibly well.
26:01:
And many of those funds do invest in energy or infrastructure.
26:06:
And if you look at the asset managers, a lot of them are
26:09:
creating infrastructure funds.
26:12:
But you go outside of South Africa, whether you talk about Zambia or Uganda
26:18:
or Kenya or Nigeria, you have a lot of fairly large domestic pension funds and
26:25:
that capital is trapped in one country.
26:27:
But our infrastructure needs create, connect one country to another.
26:32:
So to the extent that could be unlocked at least a little bit, I think we would
26:38:
see a significant increase in investment in the right infrastructure opportunities.
26:44:
And off the back of that growth of, consumer packaged goods.
26:48:
Godfrey Mutizwa: Coming into, so let's say we're into it.
26:51:
Let's talk about this wonderful creation by the political leaders of the continent.
26:57:
I think in terms of speed of implementation, I have not
27:00:
seen anything as fast and I've been around a few decades.
27:04:
Let's talk about what it is doing on the ground and practically how we
27:08:
are seeing, I want to talk companies.
27:11:
But I want to talk the big picture too, just in terms of whether we are
27:14:
beginning to see the kind of impact that the founding fathers envisaged
27:19:
when they talked about integrating the continent and also those who
27:22:
finally implemented the vision.
27:24:
Are we seeing fruits yet?
27:26:
Anne Aliker: I'd say it's early days yet.
27:27:
Godfrey Mutizwa: It is early.
27:27:
Anne Aliker: It's very early days yet, which means in practical
27:30:
terms, if I look at the individual companies, I'm not yet seeing it.
27:35:
Yeah.
27:36:
And that is not to disagree with anything you've said because when I
27:39:
look at the regulations, when I look at the fact that the different countries
27:45:
have actually signed the various agreements and seem to be committed
27:50:
to it, then I think it will work.
27:54:
But it's only been a few years and when we talk about the free trade
27:58:
agreement across the continent, I don't think it should be a surprise that
28:02:
my response is it is early days yet.
28:05:
It is also not a surprise that typically companies will
28:10:
grow their own market first.
28:11:
Godfrey Mutizwa: Yeah before they look outside.
28:14:
Anne Aliker: Then they'll look at the neighbouring countries, and
28:16:
then they'll look further afield.
28:18:
So that takes time.
28:23:
So we're not yet seeing, for example, East African companies selling into Angola.
28:28:
Yeah.
28:28:
We are seeing Angola companies invest in DRC in fast moving consumer goods.
28:35:
That is not the same as saying that they are exporting into the DRC.
28:40:
So there is still some work to do, there's still some energy required
28:43:
to get it moving effectively.
28:47:
West Africa?
28:48:
We talk about East Africa being, integrated, but from a West Africa
28:53:
perspective, you do see some commodities between Ghana and Nigeria
28:57:
and vice versa between, Ivory Coast and Ghana when it comes to cocoa.
29:03:
You see the governments collaborating on that.
29:07:
Godfrey Mutizwa: Let's gravitate to the DRC and talk about
29:10:
how big this opportunity is.
29:12:
In particular, given the growing interest we have seen.
29:15:
The United States has been talking about the Bitou Corridor.
29:20:
We know that, on the East African side, we've been talking about other various
29:24:
corridors that we've been creating, but at the centre of it all is the
29:27:
Democratic Republic of the Congo.
29:29:
Let me share a little story about the DRC with you.
29:32:
I saw a definition somewhere on the internet.
29:34:
I can't remember who said it, but they said the Democratic Republic of the Congo
29:38:
is the richest country in the world.
29:41:
In terms of resources, but in the crowd.
29:45:
Let's talk about getting those resources out and the
29:47:
opportunity that it represents.
29:49:
I will begin with you, Anne.
29:50:
Anne Aliker: Yeah, I guess I wasn't really hesitating.
29:52:
I was just thinking about the significance of the opportunity.
29:56:
I went to the DRC for the first time this year, and unlike many
30:00:
people, I didn't land in Kinshasa.
30:02:
I landed in Lubumbashi and drove to Kulwezi.
30:07:
Now, for those of you who may not know, that is in the Katanga region.
30:11:
It's where the copper and the cobalt is.
30:13:
Godfrey Mutizwa: The rich mining region.
30:14:
Anne Aliker: Rich mining region.
30:15:
There are a number of significant mines that have been developed
30:20:
over the last few years.
30:22:
What's interesting about those mines is it takes time to build and develop a mine.
30:28:
But those mines have started to export their product.
30:33:
So those mines are now generating cash and revenue, both for the
30:39:
shareholders and for the DRC.
30:43:
Now, that talks to a significant amount of money that potentially
30:50:
becomes trapped in the DRC.
30:51:
So what are we now seeing?
30:53:
We're seeing the mine service companies also set up in the DRC.
30:58:
These are very large mines and these are global service companies.
31:03:
I was
31:06:
both impressed and actually awed by the significance of the opportunity there.
31:14:
We went to see one mine that very kindly put up a chart of
31:21:
the large copper mines globally.
31:23:
And then made the statement, we are number 18, but quarter one
31:27:
next year will be number two.
31:28:
Godfrey Mutizwa: Oh, wow.
31:29:
Anne Aliker: And it's about the quality of the mineral and
31:34:
the ore that's in the ground.
31:37:
And where in the ground it is.
31:40:
So you don't have too many deep mines.
31:42:
It's still surface mining.
31:44:
Yeah?
31:45:
And it's surface mining because it is on the surface.
31:48:
It is not surface mining because people are doing the wrong thing.
31:52:
And that's a significant opportunity both for the DRC and for the region,
31:56:
because of course, the DRC, that mineral must be exported in some
32:02:
form or shape, even if there is some processing that takes place in the DRC.
32:08:
Ultimately, it's going to be used in batteries elsewhere in the world.
32:14:
And, it'll attract revenue to the DRC, revenue to the region.
32:21:
It will, the miners will demand and require investment in infrastructure
32:26:
in order to export their product.
32:29:
So there is, there is a wonderful, combination of, not influences, a
32:39:
wonderful combination of incentives here.
32:43:
It is the miners who will need to invest in some form or
32:46:
other in the infrastructure.
32:48:
And by that, I don't mean that they will put their own money in the
32:51:
ground, but you know that they're going to use the infrastructure.
32:54:
That same infrastructure will move other goods.
32:57:
Godfrey Mutizwa: And we're certainly hoping that some of that money will
33:01:
go into processes, those minerals into value that ends the country
33:08:
and the people of the DRC more.
33:10:
We need to round up.
33:12:
And, as we–
33:12:
Anne Aliker: Can I just comment on that?
33:13:
I would certainly hope so.
33:15:
And, I think–
33:16:
Godfrey Mutizwa: It's not a dirty word, but inficiation, right?
33:18:
Anne Aliker: No, it's not a dirty word at all, but let's look at
33:21:
it also from this perspective.
33:23:
Nobody wants to export soil out.
33:26:
So even the mining companies are incentivised to do some processing in DRC.
33:31:
Because I think sometimes we forget that people are very commercial.
33:36:
Companies are commercial.
33:37:
Shareholders want a return.
33:39:
Exporting soil doesn't provide a return.
33:41:
Godfrey Mutizwa: Sure, so we need to do more.
33:45:
Anne Aliker: I think they'll want to do more themselves.
33:48:
That's the bit that I think many of us forget.
33:50:
Nobody wants to export soil.
33:52:
Godfrey Mutizwa: Agreed.
33:53:
Godfrey, let me come to you and take the positive picture that we're getting from
33:57:
the DRC and then add to the story that we spoke about earlier about the nine
34:02:
countries in Africa that are growing faster in the world than many parts of
34:09:
the world and ask the question, heading into 2025, how does that picture look?
34:14:
The picture is very positive from a growth perspective.
34:17:
As I mentioned before, we're going to reclaim our place as the
34:20:
second fastest growing region in the world, the Sub-Saharan Africa.
34:24:
There'll be some that will grow faster, some slower, but the average
34:27:
is going to be, according to the IMF over the next five years, about 4.2%.
34:32:
Which will be the second fastest growing region in the world, and that's important,
34:35:
4.2% on average is maybe about 2% in real terms, per capita, which is important.
34:44:
What you want for real transformation over a generation is just continued growth.
34:50:
You want sometimes it to be faster, some slower, but it just needs to
34:53:
be positive all the time and for a very, very long period of time.
34:56:
Godfrey Manzwa: And of course, that's going to be powered
34:57:
by the companies, right?
34:58:
Is that a picture that you also see?
35:00:
Anne Aliker: Definitely.
35:01:
I mean, if I think about my own personal budgets and requirements from my boss.
35:09:
It's all about growth because the companies are growing.
35:12:
Maybe the one thing I will say from a macro perspective, we're
35:15:
still growing off a relatively low base across the continent.
35:19:
So the growth is important.
35:22:
I think it is positive.
35:24:
It needs to continue in the medium term to make a significant difference, both to
35:31:
the quality of lives and the purchasing power of the consumer on the continent.
35:35:
And on that happy note, we end it.
35:38:
Africa's inflation picture is improving.
35:41:
And its economic growth is accelerating, building scale in its companies.
35:46:
I want to thank my guests for tonight's program.
35:49:
Anne Alika, Head of Client Coverage CIB and Godfrey Manza,
35:53:
Economist, Africa Regions.
35:55:
Until next time, goodbye.
