Private and confidential 9th Forum on African Public Debt Management and Bond Markets Latest Developments and Challenges Facing the Debt Capital Markets in Africa Standard Bank Debt Primary Markets Contribution June 2015

Private and confidential Overview of The Southern and Central Africa Local Currency Debt Capital Markets Activity

3 Local Currency Issuances in Southern and Central Africa 1 issuance in 2014 (Microfinance Institution) Listed on the Ghana Alternate Exchange (GSX) 2015 known pipeline: 2 issuance Ghana Zambia 3 Issuances in All Listed with the Lusaka Stock Exchange (LuSE) 2 issuances in 2014 (Financial Institutions) All listed with the Namibia Stock Exchange 2015 known pipeline: 4 transactions Namibia 5 transactions completed in 2014 (3 FIs, 2 Corps) Currently known pipeline of transactions is 3 transactions MozambiqueBotswana 4 issuances in 2014 (2 FIs, 1 micro finance, 1 corporate) 2015 known pipeline: 1 (LCY), 1 (USD) 3 listed companies have issued over the last 3 years Malawi

4 Comparative Market Development Dashboard **** Market Characteristic ZambiaMozambiqueBotswanaNamibiaGhanaMalawi Listed vs. Unlisted  Only private pension funds may invest in unlisted bonds  Preference for listed bonds  Majority of bond issued in he market are listed  Required for all Commercial Paper issuances  BPOPF make up ~90% of investor market  Preference to invest in listed notes in the local market  Implementation of regulation 29 restricts investor from investing in unlisted bonds  Listing required for all issuances that intend to attract pension funds  Not Required Type of Issuance  Unsecured  Secured Regulatory Authorities  Bank of Zambia (BoZ)  Lusaka Stock Exchange (LuSE)  Bank of Mozambique (BdM )  Mozambique Stock Exchange (BVM)  Bank of Botswana (BoB)  Botswana Stock Exchange (BSE)  Bank of Namibia (BoN)  Namibia Stock Exchange (NSX)  Bank of Ghana (BoG)  Ghana Stock Exchange (GSE),  Reserve Bank of Malawi (RBM)  Malawi Stock Exchange (MSE) Utilized Parties to Bond Issuance  Independent Legal Counsel  Sponsoring Broker  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger  Independent Legal Counsel  Sponsoring Broker  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger  Independent Legal Counsel  Sponsoring Broker  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger  Independent Legal Counsel  Sponsoring Broker  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger  Independent Legal Counsel  Sponsoring Broker  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger  [Independent Legal Counsel  Transfer, Calculation, Payment, Receiving Agents  Independent Arranger] Expected Time to Complete Issuance  weeks  8-10 weeks  weeks  Shorter Timeframe Existence of Bond Pricing Benchmark  182 day Treasury Bill  Standard Lending Facility (SLF)  182 day Treasury Bill  Longer dated Treasuries for longer dated paper  182 day Treasury Bill  Longer dated Treasuries for longer dated paper  182 day Treasury Liquidity  Highly illiquid  Illiquid  Highly illiquid Typical Issuance Size  ZMW150 million  MZN300 to MZN500 million  BWP300 million  NAD200 million area  GHS60 million area  MWK2billion

Private and confidential Developments and Challenges

6 Key Recent Developments for the SSA Debt Capital Markets DevelopmentComments Development Rate Issuances by the DFIs, Other Organizations DFI issuances have set precedents in the market for other potential issuers. There are other institutions active in the respective local markets Regulatory Reform Increased regulatory authority involvement in the debt capital markets Regular Benchmark issuances Most markets have regular auctions which have developed regular auctions to set benchmarks for corporate issuances High Medium Low Legend:

7 Challenges with the SSA Debt Capital Markets ChallengeCommentsSeverity Lack of Quality Options Besides Government Securities, Pension Fund and Asset Managers are challenged in finding options for investments Understanding of the DCM Products Improve understanding with issuer and investor Lack of Realistic Expectations General disconnect of issuance expectations between Issuers, Investors and Arrangers VolatilityVolatile markets conditions prevents certain issuers from coming to market Lack of Secondary Markets Investors can only Hold-to-Maturity CostsHigh costs for corporate issuances High Medium Low Legend: