This document discusses ways to help close Africa's annual $50 billion infrastructure funding gap over the next 10 years. It proposes a collaborative approach between African emigrants, local banks, and governments. Local banks can provide banking services tailored to emigrants' needs and help channel emigrants' remittances and savings into infrastructure projects to bridge the gap. Governments can implement policies to incentivize diaspora investment and improve engagement. Working together, these groups could leverage emigrants' $37 billion in annual savings and $32 billion in remittances to significantly reduce the infrastructure funding shortage.

1. BUILDING AFRICA
How local banks, governments, and African
emigrants can help bridge Africa infrastructure
funding gap
April 2015
By Khadar Ahmed and Serge Ouedraogo
© Rollo Consulting 2015 1

2. The Team
Khadar Ahmed Serge Ouedraogo
MBA from UC Berkeley
Haas School Business
• Born in Somalia, he spent – due to the Civil
War – five years in refugee camps without
access to education, health care, and
decent food
• He has deep appreciation for the difficulties
faced many Africans and eager to
contribute solutions that increase economic
activities and help lift many out of poverty
CFA
MBA from UC Berkeley
Haas School Business
• Originally from Burkina Faso, he has over
10 years of international experience in
North America, Europe, Africa and the
Middle East
• He is an experienced consultant and
financial analyst who enjoys helping
entrepreneurs solve strategic questions
with double bottom line opportunities
© Rollo Consulting 2015 2

3. Agenda
African Infrastructure: A collaborative approach to solve a
fundamental funding problem
How African emigrants can potentially bridge the gap
How local Banks can win new business and help solve the
funding problem
How government can facilitate the collaboration
A
B
C
D
© Rollo Consulting 2015 3
How you can contribute todayE

4. Over the next 10 years, Africa faces an infrastructure
funding gap of ~$50B annually – Low funding from private
• Over $93B annually
over the next 10
years
• Financing gap of
about $50
billion/year
• Poor state of
infrastructure cuts
economic growth
by 2%
• Productivity down
by to 40%
African infrastructure funding, $B/year
$48B
$45B
$93B
$30B $11B
Total
required
funding
Infrastructure
funding
gap
Total
current
funding
African
Govern-
ments
Donor
Agencies
$4B
Private
© Rollo Consulting 2015 4

5. This gap can be addressed by collaboration between 3
parties: African emigrants, local banks, and governments
INFRASTRUCTURE
FUNDING GAP
AFRICAN EMIGRANTS1
32LOCAL BANKS GOVERNMENTS
© Rollo Consulting 2015 5

6. African emigrants can potentially bridge the gap through
productive remittances and savings
Private
Foreign Capital
African Emigrant
Savings & Remittance
Institutional
Collaboration
Saving
Incentives
Fund
location
External
Internal
Size/Cost/
Sustainability
Low High
1 AFRICAN EMIGRANTS
© Rollo Consulting 2015 6

7. African emigrants can help close the infrastructure gap by
investing 20% of remittance and 50% of savings
$48B
$45B
$93B
Total current
funding
Total required
funding
Infrastructure
funding
gap
$11.7B
$5.3B
Remittance
Savings
$17B
/year
Annual infrastructure gap
• Sub-Sahara Africa’s diaspora saved $37B
in 2012 in western banks
• 8% annual growth rate (2009 – 2012)
• Africans’ surveyed indicate a willingness
to allocate 20% of saving to home country
• Saving allocation to home country could
grow to 50% with reduced political risks
• $32billion remittance flows to sub-Sahara
Africa in 2013
• 9% annual growth rate (2013 – 2017)
• Highest remittance cost at 12%
• In Kenya 25% of remittance is
saved/invested
1 AFRICAN EMIGRANTS
© Rollo Consulting 2015 7

8. Offering African emigrants an opportunity to “build their
home country” is a win-win for emigrants and banks
2 LOCAL BANKS
Why Local Banks Win-Win Proposition
African Emigrants offer
• New source of capital
• Reliable and sizable long term funding
Local banks offers
• Affordable remittance services
• Easy saving options not offered by host
country
• Reliable means of investing money
back home
• Investment advisory
Asset
Allocation
Debt
Financing
Political
Risk
Currency
Risk
Local banks have limited to no assets
allocated to infrastructure projects
Debt financing market is dominated
by DFIs, the requirements of which
are so stringent and stifle investments
Reduce political risk, which is one of
top 3 risks limiting the participation of
private capital
Reduce currency risk, which is one of
top 5 risks limiting the participation of
foreign private capital
© Rollo Consulting 2015 8

9. Local banks do not yet cater to the needs of African
emigrants – Opportunities for new solutions
2 LOCAL BANKS
The Voice of African Emigrants Opportunities For Banks
• Saving plans to return home
• Partner in business ventures
and help dissipate the
perception of risk
• Business and investment
advisory
• Real estate investment
advisory and mortgages
“I’m not successful here. I don’t have money. I’ll be ashamed to
return just with my suitcase.”
“I want to start a business back home, but everything is political
in Africa. If you don’t have connections, your business could be
crushed and closed at any time by officials.”
“ “I don’t have a place where to live. I don’t want to return to my
parents house. Where will I live and host my family when I don’t
have that much money?”
“As an African in the diaspora I haven’t really seen any targeted
information that would compel me to… invest in [Africa]. There
has to be a lot more focused marketing and encouragement to
invest.”
© Rollo Consulting 2015 9

10. Local banks can take action by building suited banking
infrastructure and reaching out to African emigrants
2 LOCAL BANKS
Engage Enable Empower
• Engage with the
emigrants that
are about to
leave the
country
• Create and
implement
referral
programs
• Simple products
with attractive
interest rates
and low fees
• Low cost
remittance
solutions such
as free account
transfers
• Market
investment
products that
meet the
diaspora needs
• Emigrant-
specific
platforms,
products and
advisors
• Development of
online and
mobile banking
demonstrated
infrastructure
barriers can be
overcome
• Telecommuni-
cation
investments
contributed 1%
per capita
growth from
1995 - 2005
© Rollo Consulting 2015 10

11. Government is an important partner to implement policies
paving the way for African emigrants and others investors
3 GOVERNMENTS
• Rehabilitate existing
infrastructure, target
better subsidies, and
improve budget
execution
• Governments need
to be more active in
engaging the
diaspora and
reducing the
perception of risk
• More tangible
actions such as
FDIC deposit
insurances and
regulation allowing
foreign denominated
deposits need to be
considered
Challenges Solutions
Policies
No targeted
policies to
incentivize
emigrants
Engagement
Platforms
Lack of
Engagement
No dedicated
platforms for
mobilization
Increase engagement with diaspora
through Embassies, World Bank, Media
Develop online and offline platforms that
can help mobilize & engage emigrants
Create policies incentivizing emigrants
to invest back home: allow dual
nationalities, tax incentives
Offer deposit insurance protection (DIP)
comparable to those provided in Asia –
Only 20% of African banks provide DIP
Increase bank regulation & supervision,
implement insolvency resolution
procedures
© Rollo Consulting 2015 11

12. Government has an opportunity to engage, enable, &
empower African emigrant communities around the world
Engage Enable Empower
• Events Promoting
saving and investments
in Africa
• Dedicated diaspora
engagement cabinet
• Tax incentives:
Remittance and
diaspora saving and
investments
• Transparency and
deposit insurance
• Develop the
infrastructure that
allows diasporas to
vote
• Develop online
platforms dedicated to
the Diaspora
3 GOVERNMENTS
© Rollo Consulting 2015 12

13. Use a compelling integrated marketing strategy to attract
emigrants capital
EXAMPLE OF OUTREACH FROM LOCAL BANKS
Solutions
Channels
• Emigrant saving and checking
• Then more sophisticated products:
Securitize infrastructure assets funded
• Emigrant bonds, Sukuk
• Partnership with external investors to
make projects economically viable
• Referral programs
• Ads on online diaspora communities
• Partnership with the African Diaspora
Networks
Communication
“To all African Emigrants,
South African Citi is a local partner and
financial advisor for an affordable
remittance solution to support your family
and invest back home.
Citi does this by providing a no charge
money transfer solution across all Citi
bank accounts and a dedicated financial
advisor to support all your money
management and investment needs.”
© Rollo Consulting 2015 13

14. What can you do today to bridge the infrastructure gap in
Africa?
EXAMPLE OF WHAT EMIGRANTS CAN DO TODAY
Mentor African Startups
Study Engineering
• Help entrepreneurs build revolutionary
technologies and scalable businesses
• It only takes a few hours a month
• Contribute remotely through platforms
like VC4Africa
• A recent study by the Royal Academy of
Engineering shows that:
• Africa is not graduating enough
engineers
• Graduates do not have the necessary
skills and experience
Invest
• Invest in Infrastructure funds
• Participate in the many funds
across the continent
• New crowdfunding platforms such
as Homestrings make it easier than
ever (e.g.)
• Invest in current African startups that
are helping Africa leapfrog traditional
infrastructure
• Drones, distributed resources (e.g.
solar), mobiles technologies…
• Join the growing number of African
angel networks like ABAN
© Rollo Consulting 2015 14

15. THANK YOU
Contacts:
Khadar Ahmed : khadarahmed01@gmail.com
Serge Ouedraogo: sergeouedraogo@gmail.com
© Rollo Consulting 2015 15