1. African Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University, The South African Institute of Chartered Accountants, Africa Investment Advisors and CFO magazine African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016 1

2. CFO Global and African Business Outlook – Overview 2 Global Business Outlook Duke University has surveyed CFOs around the world every quarter since 1996, most of those years jointly with CFO magazine. The survey takes the pulse of the business community and has a strong record of predicting future economic activity. The results are relied upon by Central Bankers, Analysts, Investors, and are widely reported in the press. SAICA, AIA, and the African Business Outlook SAICA joined the survey in 2013, helping to found the African Business Outlook, with an initial focus on the South African economy. Nigeria was added to the survey sample in late 2015. African Investment Advisors joined the survey team in Spring 2016, with an objective of solidifying participation by Nigerian CFOs and also expanding into Kenya. The analysis in this report will enable participating firms to make important business decisions as they can benchmark themselves against their global peers and also aid investors interested in Africa. Key Survey Facts  Survey Respondents: 111  Of which, 65 from Nigeria, 35 from South Africa, and 7 from other parts of Africa.  Unless otherwise stated, the analysis represents responses from across Africa.  Sample includes CFOs from both public and private companies representing a broad range of industries, including:  Retail/Wholesale, Mining/Construction, Manufacturing, Transportation/Energy, Communications/Media, Technology, and Banking/Finance/Insurance.  Certain questions are constant each quarter, to capture trends in corporate optimism, expected hiring and capital investment plans, inflation, wages, and many other categories.  Other questions change each quarter to examine topical economic issues and newsworthy business or political events that may affect the corporate finance landscape. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

3. African Business Optimism Compared to the Rest of the World Global Trends Country / Region Sep 2016 Response 3 Notes: Presented data are the mean value for each region or country, Scale from 0-100 Country Business Optimism Index Own-Firm Business Optimism Index Own Company African CFOs are the least optimistic in the world, about both their companies prospects and countries’ economic outlooks. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

4. Changes in the African Business Optimism Index 4 When ranked on a 100 point scale, the South African Optimism Index (for the economic prospects of the domestic economy over the next year) increased from 37.6 in Q2 2016 to 43.6 in Q3 2016; Nigeria is slightly better 46.5. Optimism about domestic economy in South Africa remains low, and is still lower than the rest of Africa. The South African Optimism Index improved to 43.55. Nigerian CFOs are more optimistic about their domestic economy relative to the rest of Africa, though their number fell fro, last quarter. Trends in South Africa Optimism CFOs continue to grow less optimistic about the domestic economy  60% of South African CFOs have become less optimistic this quarter, versus 52% of Nigerian CFOs (51.6%).  Compared to Q2’16 (83%), this quarter fewer South African CFOs (60%) report becoming less optimistic about the domestic economy Nigerian Optimism CFOs are optimistic about the domestic economy  Half of CFOs from Nigeria have become “less optimistic”, compared to 39% become “more optimistic”  This is still a better outlook than the rest of Africa African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

5. 5 The trend of South African CFOs becoming more optimistic about their own companies is continuing, increasing to 42.9%. The reverse is the case for Nigeria, as more CFOs are becoming less optimistic about their companies. Changes in Own Company Sentiment When ranked on a 100 point scale, the South African Own-Company Optimism Index (for the economic prospects over the next year of each CFO’s own company) increased slightly from 58.3 in Q2 ‘16 to 59.1 in Q3 2016. This is similar to Nigeria’s 58.7. Trends in South African Own-Company Optimism CFOs are more optimistic about their own companies than the general economy  The trend of South African CFOs becoming more optimistic about their own companies is continuing, increasing from 36.2% in Q2 ‘16 to 42.9% in Q3 ’16.  South African CFOs are more optimistic about their own companies (42.9%) than the general South African economy (22.9%).  Fewer South African CFOs are less optimistic (31.2%) about their companies than CFOs from Nigeria (42.2%). Nigerian Own-Company Optimism More Nigerian CFOs have are becoming more optimistic than are becoming more pessimistic  52% of Nigerian CFOs have grown more optimistic about their own companies’ prospects this quarter, compared to 42% that have grown less optimistic. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

6. What Affects Value at African Firms? 6 African CFOs rank Corporate Culture and the CEO as the top value drivers at their firms. (% that rank item as a Top 5 value driver) African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

7. Corporate Culture – Around the Globe % of firms that listed Culture as Top 5 value driver Global Business Outlook Duke University Sept 2016 7

8. What Keeps CFOs Awake at Night? (Most Pressing Concerns of CFOs) 8 CFOs in South Africa and Nigeria feel that economic uncertainty, currency risk, and government policies are pressing concerns. South African CFOs are becoming increasingly concerned with the political situation in the country. South AfricaNigeria Economic uncertaintyInflation Currency riskGovernment policies Volatility of political situation Economic uncertainty Government policiesCurrency risk Difficulty attracting /retaining qualified employees Access to capital Weak demand for your products/services Regulatory requirements Employee productivityCost of borrowing Corruption and white collar crimeEmployee morale Inflation Employee productivity African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

9. Most Pressing Concerns, Details and Comparisons 9 Nigerian CFOs express growing concern about the effect of inflation and access to capital. South African CFOs are concerned about economic and political uncertainty African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

10. Financial Snapshot (Expected % Change in Next 12 Months) 10 Wages and revenues will increase rapidly in Nigeria – but not keep pace with inflation. South African employment and capital spending will experience moderate growth (about 3%). African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

11. Would Increased Interest Rates Stifle Capital Spending? 11 Only one-in-five African CFOs say that a 1% increase in interest rates would cause them to curtail their capital spending plans. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016 Response by CFOs (Cumulative) Change in Interest Rates

12. Speed of Brexit Schedule’s Effect on Businesses in Africa 12 Among companies affected by Brexit, the speed of Brexit affects South African companies more than their Nigerian counterparts. Of the affected South African companies, most favor a slow British exit from the EU. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

13. Political Uncertainty Affecting Companies 13 African CFOs say that political uncertainty causes them to be more cautious when making spending and hiring decisions. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

14. Political Uncertainty – Around the World Has political uncertainty or political risk in your country led your company to be more cautious in...? Global Business Outlook Duke University Sept 2016 14

15. 15 Political Risk and Uncertainty How would you rate the degree of political uncertainty or political risk in your country? CFOs believe that Africa has the highest degree of political risk in the world, followed by Latin America  93% of African CFOs think their country’s political risk is moderate-to-high, compared to 90% for Latin America  Within Africa, South Africa has the highest political uncertainty, with more than 80% saying it is severe  Due to the upcoming election and Washington gridlock, the US also faces high political risk African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

16. Primary Sources of Political Risk 16 CFOs from South Africa and Nigeria rank the following sources of political risk and uncertainty that is causing their firms to be more cautious in their business plans South AfricaNigeria Government gridlock or dysfunction Proposed regulationsThreat of terrorism Social policies [socioeconomic or racial activism, etc.]Proposed regulations Upcoming electionsProtests against current administration The potential for tax reform Minimum wage Environmental / climate policies Social policies [socioeconomic or racial activism, etc.] OtherUpcoming elections African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

17. Primary Sources of Political Risk, Details 17 African CFOs identify Government gridlock or dysfunction (68%) as the primary source causing business caution, followed by proposed regulations (50%) and Protests against the current administration (38%). African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

18. Effects on Business of Political Risk and Uncertainty 18 About three-fourths of South African and Nigerian CFOs say that political risk is causing their firms to be more cautious in spending or making acquisitions. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

19. Upcoming U.S. Presidential Election’s Effect on Businesses in Africa 19 Few African companies are not currently altering their business decisions based on the upcoming U.S. presidential election. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

20. U.S. Presidential Election Results’ Effect on Investment in Africa 20 Among African companies that say they are affected by the U.S. presidential election, 29% (South African) to 47% (Nigerian) of firms say they will delay investment plans after the U.S. election should Donald Trump win. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

21. CFO’s Perception of Government Accountability Influences Outlook 21 South African CFOs who believe that the country’s constituents are holding government accountable for its actions also believe that the investment prospects and quality of government are worse today than they were a year ago. For example, among this group, nearly 80% of South African CFOs believe the quality of government is worse today than one year ago. African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

22. Nigerian CFO’s Perceptions of Floating Exchange Rate 22 Most Nigerian CFOs have a negative perception of the impact of changing from a fixed exchange rate to a floating exchange rate policy. Below are responses to the question, “Will the floating exchange rate …” African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016

23. Return on Assets (ROA) 23 Expected 2017 profit margin in Africa is higher than in the US, Europe, Latin America or Asia Profit margins are expected to rise in all regions next year, relative to 2016 profits  Despite substantial risk, CFOs in Africa expect high ROA African Business Outlook Duke University / SAICA / AIA / CFO Magazine Sept 2016