Africa Strategy

Africa Strategy 02 March 2017

Africa Outlook • Africa represents around 15% of our clients as source country and 20% as a destination country. There is certainly potential to grow this further. • According to EMPEA data, US$12.8 billion have been raised for sub-Saharan Africa focused private equity funds between January 2010 and March 2015. • A study conducted by EMPEA and FSDA in 2016 showed clearly that the Mauritius jurisdiction remains the preferred jurisdiction among fund managers, institutional investors and private equity for investment in Africa. • Africa tops the list of destination countries for new global business entities being incorporated in Mauritius. Latest FSC Annual report indicates that 58 % of the new structures incorporated are targeting Africa. • Africa represents 54 countries and obviously we can’t target all 54 countries given the limited resources. • Cim should, therefore, concentrate on developing selected markets that have growth potential and should position itself as the leading service provider for Africa-related business.

Our Strategy to target Africa Target source countries where deals ORIGINATION are done Africa StrategyReinforce our Target intra-South Africa Africa presence investment- MARKET ENTRY Strategy

OriginationUK: France:UK remains an important investing country in Africa both for France is the fourth largest investor in Africa with morecorporates, funds and private equities. Most of the leading than 85 projects in Africa. Mauritius has not captured muchAfrican PE are based in UK namely Helios, 8 Miles, DPI, Actis, of this flow going to Africa from France. Opportunities areTPG, Bain, 3i, Duet Private Equity, CVC, Enko Capital. there to create awareness in France on the use of MauritiusMost of the lawyers advising on Africa structuring also sits in as a platform to invest in Africa.UK. Target in France: corporates in renewable energy,Targets: private equity firms, fund managers, asset managers consumer goods, logistics , infrastructure , oil & Gasand corporates investing in Africa as well as the lawyersChina: India:The Chinese President has given his support to Africa and Indian firms are conducting numerous takeovers abroadoffered $60 billion loan and aid package to Africa. China aims and are venturing into Africa. Trade between India & Africato develop infrastructure, improve agriculture and reduce has grown exponentially during the past 15 years. Indo-poverty on the continent. China investment in recent years has African trade volume reached nearly US$ 90 billion byincreased from $7 billion in 2008 to $26 billion in 2013. 2015. India has emerged as one of Africa's largest trade andThe top 20 African nations in which China is involved include investment partner. Indian companies have alreadynot only commodity-rich nations such as Nigeria and South invested more than US$ 60 billion in the resource-richAfrica, but also countries like Ethiopia, Kenya and Uganda. continent.The largest deals — which tend to be government-to- Investment by Indian state-owned enterprise in Africa isgovernment — do in fact involve infrastructure projects and largely driven by energy, infrastructure and power whilstnatural resources. But this tend to evolve and more and more private companies seem to be more active in sectors suchprivate investment is now being carried out in Africa. Chinese as agriculture, pharmaceuticals, telecommunications andprivate companies have invested/ are investing in business mining.services; wholesale and retail. There is therefore a number of opportunities to tap on theTargets: corporates, entrepreneurs outward investment side. Targets: Indian corporates

Market-entry Strategy Key countries targeted in Africa based on the economic fundamentals of those countries.Kenya: Tanzania and Uganda:The World Bank’s most recent economic update projected a 5.9% Tanzania and Uganda have been targeted as part of the countriesgrowth in 2016 for Kenya and which is expected to rise to 6% in that have potential in East Africa besides Kenya. Uganda has a2017. The report attributed the positive outlook to low oil prices, very good DTA with Mauritius whilst Tanzania has an IPPA.good agriculture performance, supportive monetary policy, and Both countries have a number of family businesses that areongoing infrastructure investments. expanding overseas and that it might be worth to target.Kenya recorded the fastest rise in foreign direct investments (FDI) In addition, both countries are attracting foreignin Africa and even surpassed SA. The Kenya Govt has ratified new investment. Investors are attracted to the country’s commitmentrules allowing foreign direct investment (FDI) in the establishment to implementing sound macro-economic policies, their effectiveof special economic zones (SEZ) making the procedures for privatisation programme and rich natural resources. Severalregistration simple, flexible and transparent. Kenya’s top large-scale infrastructure projects -port facilities, oil and energyinvestors are drawn from US, India, United Kingdom, Mauritius, production, gas liquefaction are under way and where foreignIsrael, Japan, Netherlands, Belgium, China and South Africa. investment is being attracted.Many private equities to the like of Progression, Responsability, The mining sector, the oil and gas industry, as well as the primaryAcumen have set up offices in Kenya. The IFC has opened an office agricultural products sector (coffee, cashew nuts andin Kenya. tobacco) and renewable energy draw most FDI.In addition many family businesses in Kenya have grown to astage where they need to expand and therefore exploring Target: In Country Corporates , international corporates, high netopportunities in other African countries. worth individualsTarget : corporates, fund managers, PE , high net worthindividuals

Market-entry StrategyWest AfricaIn West Africa the two economic giants Nigeria and Ghana have had difficult years but it is expectedthat those economies will rebound.Ghana: Nigeria:Ghana’s economic growth is expected to be around 5.6% for 2016 The Nigerian economy has closed 2016 with its worst economicand it is expected that in 2017 this will grow to 8.7% following performance in over 20 years due to the hit on oil prices, tightconsolidation of macroeconomic stability and implementation of liquidity in the FX market and depressed private consumption.measures to resolve the crippling power crisis. The economy will certainly rebound but recovery, however, isGhana the second largest West African economy continued to fragile and depends mostly upon policy action by the government.attract investment although the number of projects fell from 58 to Analysts consider that a further devaluation of the naira is key to39 over the last few years. Investments were registered in sectors attract investment into the economy and support domesticlike Technology, Media and Telecommunications, Financial Services demand.as well as Consumer products and retail. Investors from South Private equities say that it’s probably the best time to enter theAfrica, UK and Nigeria maintained a presence but with more market.caution in their investment.Given the positive prediction of pick up in the country, Ghana is a Target: In Country Corporates , international corporates, high netcountry that would offer opportunities. worth individualsTarget: In Country Corporates , international corporates, high networth individuals

Market-entry Strategy The West Africa francophone countries are not to be neglected as two of the countries in this region, namely Cote d’Ivoire and Senegal are predicted to have more than 6% growth.Cote d’Ivoire: Senegal:World Economic Forum predicts that Ivory Coast is likely to maintain After several years of growth below 5%, Senegal’s GDP grew by 6.5%its lead as Africa’s fastest growing economy in 2017. The peaceful re- in 2015, making it the second fastest growing economy in Africa,election of president Alassane Ouattara in 2015, along with its four- according to the World Bank. Economists believe this trend willyear National Development Plan , went some way in rebuilding continue in 2017.investor confidence. That National Development Plan has beenextended from 2016 to 2020, with $15.4 billion worth of foreign Along with political stability, the government’s economic plan willinvestments in the form of grants and credits. continue to attract investors. The Plan for an Emerging Senegal , launched in 2014, covers projects ranging from infrastructure andSustained growth will come from Cote d’Ivoire’s ambitions to transport, energy and water and sanitation developments.become a regional energy hub. The country has several renewableenergy projects under way. In diversifying its economy and Mauritius also has a very interesting treaty with Senegal, one of theencouraging a growing middle class, Cote d’Ivoire has also seen its best treaty and which is also very much use for investment in theretail sector growing. All this could see Abidjan regain its 1970s -era sub-region.boomtown status.The African Development Bank has re-opened its office in Abidjan. Target: International corporates, high net worth individualsThere are also some in-country private equities that have set up inAbidjan.Target: International corporates, private equities and high net worthindividuals

South Africa  South African economy has witnessed low growth over the past few years due to falling investment and persistent drought as well as strong fluctuations in the currency.  However according to OCED it is predicted that economic growth will rebound in 2017 and strengthen further in 2018, driven by household consumption and investment.  In particular, the improvement in electricity production removes bottlenecks and should boost confidence and therefore investment, provided that political uncertainties dissipate.  Rising production costs, together with the earlier rand appreciation should weigh on exports.  South Africa is a leading recipient country in terms of FDI. It attracted some 125 investment projects last year according to the FDi report and the largest investors in South Africa are US, UK, Germany and Spain. In addition South Africans are also investing massively across Africa.  This represents huge opportunities to be tapped and a presence on the ground certainly helps in tapping more into those opportunities. Target in SA: corporate, fund managers, private equities, individuals and high net worth individuals

South Africa Existing Business- client base and services  Our client portfolio in SA include some 200 entities.  Our client profile is predominantly corporates and HNWIs. We do administer a few funds but not much.  The corporates that we administer are mostly leading South African corporates.  Services that we offer to them are  Secretarial services  Directorship services  Accounting  Tax advisory services Cim current representation in SA:  The South Africa office is for the moment mostly a representative office and set up as a branch.  Objective: maintain proximity with our client and also to develop new relationship and build the pipeline in South Africa.  Aim: To convert the SA office into a full fledge office in order to provide on-shore services. Feedback from clients seems to indicate that there is a need for provision of secretarial and administrative services in SA and there is a lack of service provider.

Strategy to get new business in South Africa  Target the large corporates with presence in different countries and to entice them to have their RHQ and RTC in Mauritius and benefits of the tax incentives  Talk to the High Net Worth Individuals to attract them to take the advantage of the incentives announced by Government for UHNW individuals whereby individuals investing a minimum of USD 25 mn in Mauritius would benefit of 5 years tax holidays.  To attract the SA family offices to relocate to Mauritius and benefit of the 5 years tax holiday granted under the ‘Overseas Family Corporation’ licence.  To attract individuals and HNW individuals to set up trust for a better wealth and asset planning  To target the SA fund managers and private equities that are investing outside SA ( some of them were mainly focused on the SA market so far)  To position ourselves among the African PE that are investing in South Africa  To work with the lawyers in order to seize opportunities for structuring for international businesses that are setting up in South Africa  To promote our listing capabilities and encourage companies to have dual listing on the JSE and SEM  To target the Durban traders to encourage them to restructure their business through Mauritius  To target individual players in the 2nd tier and 3rd tier cities

What is required for conversion of SA office  Employ 3 additional staff in the SA office.  1 Business Development Manager and two additional administrative staffs.  The Business Development Manager can be a recently qualified Attorney or someone with a tax background that will solely be focusing on sales.  The Administrative persons will focus primarily on On-Boarding clients and also do the secretarial and administrative work related to the on-shore services.  Having more people on the ground should result in the office seeing more prospective clients and lawyers/accountants/bankers/fund managers etc.  In addition we will be able to offer to our clients services with respect to the incorporation, administration and secretarial services in SA  To consider a bigger office either within Regus or any other business area. Details with respect to cost and revenue are provided at Annex 5.

How do we implement this strategy? 1. On the origination side: - Develop relationship with the lawyers and intermediaries - Use the support of offices on the ground to reach out to the corporates, PE and intermediaries 2. On the market-entry side: - Develop a hub in East Africa supported by representatives in key countries - Develop a hub in West Africa francophone - Develop a hub in West Africa anglophone 3. On the South Africa side: - Convert the office into a full-fledge office with the possibility of registration onshore and provision of secretarial services - A representation in Cape Town to keep close contact with the fund managers and PE based in CT

What is required to develop the Africa Hubs? East Africa Hub: - Set-up a branch in Kenya which will be staffed by 2 people and ideally one from Mauritius and one local - Appoint representatives in Tanzania and Uganda that can work on a retainer plus a success fee for all secured contract. Both representatives will have an accountability to the Head of the East Africa Hub. Estimated cost: Operationalisation of an office with 2 persons and one of which from Mauritius at Managerial level and Sales person: USD 191,600 /annum ( details at Annex 1) Revenue Expected: USD 219,000 (Yr 1), USD 365,000 (Yr2) and USD 456,250 (Yr 3) Representative in Tanzania and Uganda – Retainer of USD 2,000/ month + success fee Revenue Expected: USD 171,500 (Yr1), USD 310,000 (Yr2) and USD 446,500 (Yr3) ( details at Annex 2) Legal requirements for setting up a branch in Kenya: - Kenya laws allows to set up a branch of a Foreign company. However the law requires that you have a person on the ground who can accept service of process and documents in Kenya on behalf of the company. - Legal cost for set up: USD 3,500 exclusive of Govt fees, disbursements and VAT (16%).

What is required to develop the Africa Hubs? West Africa Anglophone (WAA) Hub: - Appoint a representative in Ghana that can work on a retainer plus a success fee for all secured contracts - Appoint a representative in Nigeria that can work on a retainer plus a success fee for all secured contracts Estimated Cost: Representative in Ghana and Nigeria – Retainer of USD 2,500/ month + success fee Estimated cost for Ghana and Nigeria- USD 128,800 Revenue Expected: USD190,000 for Yr1 , USD 321,000 for Yr 2 and USD 416,000 for Yr 3 ( details at Annex3)

What is required to develop the Africa Hubs? West Africa Francophone (WAF) Hub: - Initially start with the appointment of a representative in Cote d’Ivoire that can also oversee Senegal and once revenue starts to flow to set- up a branch in Abidjan, Cote d’Ivoire. - Once the office is set up, it will oversee Senegal and the sub-region. Estimated Cost: Representative in Cote d’Ivoire – Retainer of USD 3,500/ month + success fee Estimated Cost- USD 82,800 and with an office set-up the cost is estimated to be around USD 118,600 Revenue Expected: USD 131,500 for Yr 1, USD 222,500 for Yr 2 and USD 333,500 for Yr 3( details at Annex 4) Revenue in Senegal will be expected to increase after 2018 with the setting up of the SEZ driven by the Mauritius Government in Senegal and where the investment going in the zone would likely be structured through Mauritius.

Annex 1- Details of costing for East Africa HubKenya Office_ estimated costItems USD / Month USD/Year 21,600Rental of Office 1,800 104,000Salary ( 1 manager @ 6,000/ 8,000 18,000month + 1 Sales @ 1,500 12,0002,000/month) 36,000 191,600Rental of House in Kenya Yr 3Traveling expenses 1,000 225,000Others 3,000 (25X9000) 137,500Total (25x5500) 93,750 (25X3750)Kenya Office_ estimated revenue 456,250Type of Estimates USD Yr 2structures /Annual (Yr1) 180,000 (20X9000)GBC1 110,000 (20X5500) 108,000Trusts (12X9000) 66,000 (12X5500)GBC 2 45,000 (12X3750) 75,000 (20X3750) 219,000 365,000

Annex 2- Details of costing for East Africa HubTanzania and Uganda Representative office _ estimated costItems USD / Month USD/YearRetainer for one representative 2,000 26,000in Tanzania 17,150 1,000 12,000Commission based on sales 2,000 26,000estimates ( 20% of 1st year fees) 17,150 1,000 12,000Other expenses ( client 110,300entertainment, transport)Retainer for one representativein TanzaniaCommission based on salesestimates ( 20% of 1st year fees)Other expenses ( cliententertainment, transport)Estimated revenue Tanzania Estimated revenue UgandaType of Estimates USD Yr 2 Yr 3 Type of Estimates USD Yr 2 Yr 3structures /Annual (Yr1) structures /Annual (Yr1) 135,000 108,000GBC1 45,000 90,000 ( (15x9000) GBC1 45,000 ( 72,000 ( (12x9000)Trusts (5X9,000) 10x9000) 66,000 Trusts 5x9000) 8x9000) 55,000GBC 2 22,000 ( 4x5500) (12x5500) GBC 2 22,000 (4x5500) (10x5500) 55,000 45,000 33,000 37,500 18,750 ( 5x3750) (10x5500) (12x3750) 18,750 (5x3750) (6x5500) (10x3750) 246,000 200,500 85,750 37500 85,750 22,500 (10x3750) (6x3750) 182,500 127,500

Annex 3- Details of costing for West Africa Anglophone HubGhana and Nigeria Representative office _ estimated costItems USD / Month USD/YearRetainer for one representative 2,500 32,500in Tanzania 19,000 1,000 12,000Commission based on sales 2,500 32,500estimates ( 20% of 1st year fees) 20,800 1,000 12,000Other expenses ( client 128,800entertainment, transport)Retainer for one representativein TanzaniaCommission based on salesestimatesOther expenses ( cliententertainment, transport)Estimated revenue- Ghana Estimated revenue- NigeriaType of Estimates USD YR 2 YR 3 Ghana Type of Estimates Nigeria type Estimatesstructures /Annual Yr 1 structures USD /Annual of structures USD/ Annual 108,000 GBC1 45,000 ( 5x9K)GBC1 45,000 ( 5x9k) 90,000 (10x9k) (12x9K) 90,000 108,000 55,000 Trusts 27,500 (10x9k) (12x9K)Trusts 27,500 (5x 5.5K) 33,000 (6X5.5K) (10X5.5K) (5x5,5K) 45,000 GBC 2 22,500 33,000 55,000GBC 2 22,500 (6x3.75K) 37,500 (12X3.75K) (6X3.75K) (6X5.5K) (10X5.5K) 95,000 (10x3.75K) 208,000 95,000 37,500 45,000 160,500 (10x3.75K) (12X3.75K) 160,500 208,000

Annex 4- Details of costing for West Africa Francophone HubCote d’Ivoire and Senegal Representative office _ estimated costItems USD / Month USD/Year 1 USD/ Year 2Retainer for one 3,500 32,500 32,500representative in Cote 30,300 44,500d’Ivoire 21,600Commission based on salesestimates ( 20% of 1st yearfees)Rental of OfficeOther expenses ( client 20,000 20,000entertainment, transport, 82,800 118,600traveling to Senegal)Cote d’Ivoire - Estimated revenue Senegal - Estimated revenueType of Estimates USD YR 2 YR 3 Type of Estimates USD Yr 2 Yr 3structures /Annual YR 1 90,000 structures /Annual Yr1 (10x9K)GBC1 36,000 (4x9K) 54,000 (6x9K) 33,000 (6x5.5K) 37,500 4 GBC1 36,000 (4x9K) 72,000 (8X9K) 108,000 (12X9K) (10X37.5K) 2 TrustsTrusts 11,000 ( 2X5.5K) 22,000 (4X5.5K) 5 GBC 2 11,000 (2X5.5K) 22,000 (4X5.5K) 27,500 (5X5.5K) 160,500GBC 2 18,750 ( 5X3.75K) 22,500 18,750 ( 30,000 ( 37,500 65,750 (6x3.75K) 5X3.75K) 8X3.75K) (10X3.75K) 98,500 65,750 124,000 173,000

Annex 5- Details of costing for conversion of SA OfficeEstimated Cost Estimated revenue- RevenueItems Cost USD GBC 1 No USD GBC2 21 115,500Salary 1 137,405 Trusts 15 48,000Salary 2 45,802 10 95,000Salary 3 x2 65,000 CIS manager 42,000Office rental 32,061 Fund 2 70,000BD trips (local & Int) 20,000 2 100,000Moore Stephens 1,908 Revenue from on-shorepayroll services 470,500Client entertainment 6,870Mobile phone costs 3,665Stationery 916Others 3,800 317,427Appointment of representative in Cape Town which will be remunerated on a fixed retainer of USD 3,500/month + success feeIt is estimated that the person can generate a minimum of three funds for year 1 and 5 GBC1 and thereforebringing revenue of USD 132,000