T RANSPORT INVESTORS CONFERENCE 2011

1. Investing into South Africa TRANSPORT INVESTORS CONFERENCE 2011

2. South Africa at a glance Source: World Bank Development Indicators 2010

3. South African Economy Source: IMF: World Economic Outlook, April 2011 • South Africa positioned as a manufacturing centre of excellence • Diversified Industrial sectors • Open economy • Sound business case for investment and profit • Gateway to Africa and markets of more than 200 Million consumers • Africa is the next big story after China and India

4. Established industrial & financial infrastructure A tested and reliable legal system Abundant mineral & natural resources Increased investment in infrastructure A relatively large labour force Achieving sustained and balanced growth Economic advantages which create a positive environment Further,‘consistently prudent macroeconomic policies have succeeded in reducing the fiscal deficit, stabilising debt levels, and lowering inflation and interest rates’ and the country ‘stands out among its peers due to its democratic and transparent institutions and entrenched political stability…’ Standard and Poor’s, August 2010

5. Rapid recovery from recession: 4.8% growth in Q1 14% growth in manufacturing improving fiscal position Improved growth prospects in Africa and Asia low interest rates Reachable economic goals South African Economy… Platform on which improved economic performance can be built = Employment growth of 140 000 in past 6 months • Complemented by investment in social, municipal and economic infrastructure = Proviso: Gross fixed capital formation growth of 10% p.a. - investment would thus rise to 25% by 2014.

6. Macro-Economic Policy Macroeconomic interventions to accelerate growth and ensure social inclusion • Higher public sector investment • Reduce the cost of doing business • Expand public works & micro-credit programmes • Improve state capacity to provide economic services • Strengthen social and municipal infrastructure 2011 Growth in 2011 expected 3,8% • Broad framework of further steps needed to raise the rate of investment, employment and economic growth • Proceeds from premise that positive developments in Africa and BRICS will lead to economic development. New Growth Path

7. Cape Town was named the top tourist destination in the world in the 2011 Traveler’s Choice Destinations awards. South Africa is the only African country that is a member of the G20 South Africa is also a member on the UN Security Council OR Tambo airport is the best airport in Africa, according to the World Airport Awards 2010/11. It was also in the top 3 most improved airports in the world for the same period South Africa’s Real GDP growth will accelerate from 2.8% in 2010 to 3.7% in 2011 and 4.8% in 2012, helped by stronger external demand and looser fiscal policy. South Africa- global perspective Source: SouthAfrica.info; Economist Intelligence Unit

8. Stellenbosch University was the first African university in the world to design and launch a microsatellite The Western Deep Level mines are the world’s deepest minesat approaching 4km. South Africa houses one of the three largest telescopesin the world at Sutherland in the Karoo. SA has 45 million active cell phones (population 49 million) – ranking in thetop 5globally in terms of cell phone coverage. South Africa sold $1.8 billion worth of cars to the US in 2010, putting us ahead of Sweden and Italy as suppliers to the US market. Car sales are projected to grow 10% in 2011 to 460,000 South Africa - global perspective Source: SouthAfrica.info

9. South Africa's total road network is about 754 000 kilometers, of which over 70 000km are paved or surfaced roads. South Africa has an extensive rail network – the 10th lengthiest in the world – connecting with networks in the sub-Saharan region. More than 50 airlines, making around 230 000 aircraft landing, and carrying about 33m passengers a year, move through South Africa’s 10 principal airports. The Port of Ngqurais being developed off the coast of Port Elizabeth in the Eastern Cape and is set to be the deepest container terminal in Africa. South Africa - global perspective Source: South Africa Geared for Growth, 2010

10. Of 14 emerging markets; Australia, Canada, Russia, Mexico, China, Poland, Spain, India, Korea, Brazil, SA, Colombia Chile & Argentina South Africa is: 2ndmost sophisticated financial market 2ndlowest effective business tax rate 4thranked for ease of accessing capital 4thranked i.t.o. the cost of capital 6thranked for infrastructure 7thfor FDI as a % of GDP (2008) 8thranked i.t.olabour productivity South Africa – emerging market perspective Source: Brazil National Confederation of Industry. Competition Brazil 2010: A Comparison of selected countries

11. In 2011, at 5.5%, South African interest rates are at a 30-year low. The JSE Securities Exchange one of the world’s top 20 exchanges. 1stfor the regulation of securities exchange, strength of auditing & reporting standards by Global Competitiveness Report 2010. 1stout of 60 countries in the Economist’s House Price index for the period 1997 – 2009. The South African Rand was the 2ndbest performing currency against the US Dollarbetween 2007 and 2011, in Bloomberg’s Currency Scorecard. Economic Achievements Source: SouthAfrica.info

12. The South African stock market rose 16.09% in 2010, ranking 8th out of the G20 nations and ahead of all of the G7 countries 34thout of 183 countries in the World Bank Ease of Doing Business 2011 2ndin the ease of getting credit 2ndforgood practice in protecting both borrowers and lenders 10thininvestor protection 54thout of 139 countries in the World Economic Forum’s Global Competitiveness Index. 9thinfinancial market development 27thin the protection of intellectual property Economic Achievements

13. 54thout of 173 countries in the Transparency International Corruption Perception Index 2010 South Africa is aworldleader in coal-based synthesis and gas-to-liquid technologies. It is among the lowest-cost producers of ethylene and propylene in the world, thanks to abundant access to low-grade coal and leading-edge process technology. Sasol has flown the world’s firstpassenger aircraft using the company’s own-developed and internationally approved 100% synthetic jet fuel. Sasol took to the skies with the world’s first fully synthetic jet fuel flight on Tuesday, 21st of September 2010. Economic Achievements

14. Africa is becoming more attractive... Source: Ernst & Young’s 2011 Africa attractiveness survey

15. Investing in Africa: an improving environment The operating environment is improving visibly and rapidly … 54 countries, 35 democracies (compared to only 8 in 1991) Many countries have improved their business environment: restored macro-economic stability greater predictability & increased reliability of policy & regulatory framework increased transparency and improved decision-making privatisation initiatives reduced corruption investment protection & promotion intra and inter-regional initiatives High returns on investment

16. TRIPARTITE FREE TRADE AREA (T-FTA)SADC,COMESA AND EAC (Economic Benefits) T – FTA will create a sizeable regional market with a GDP of $ 624 billion and a population of approximately 700 million people An African common market without internal borders will unleash the economic growth and potential of Africa Developmental Integration leading to cross border infrastructure development to strengthen regional supply capacity North – South Corridor – Cape to Cairo to facilitate trade and reduce cost of doing business

17. Trade Agreements in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey

18. Trade Corridors in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey

19. Africa’s Main Transport Corridors North/South Corridor Dares-Salam To Durban

20. Trans-African Highways

21. Traffic Flows in Southern Africa

22. BRICS (Economic Benefits) Combined GDP of BRICS countries is over $ 9 trillion BRICS will account for 60 % of global growth in 3 years time according to the IMF BRICS-Africa trade is expected to show dramatic gains by 2015, increasing threefold from USD150 billion in 2010 to an incredible USD340 billion.BRIC’s share of Africa’s total trade is expected to increase from one-fifth in 2010 to one-third in five years BRIC’s foreign direct investment (FDI)in Africa is expected to soar to more than USD150 billion by 2015.

23. South African Economy: New Growth Path Vision: Create jobs 5 million And to 15% reduce unemployment in the next 10years

24. Industrial Policy Action Plan II Key pillar of the New Growth Path IPAP: value-added sectors with high employment and growth multipliers

25. Industrial Policy Action Plan II Macro-economic policies which support more competitive and stable real exchange and interest rates Industrial financingchannelled to more labour-intensive and value-adding sectors Leveraging procurementto raise domestic production and employment in a range of sectors Developmental trade policiessuch as tariffs and standards deployed in a selective and strategic manner Competition and regulation policies: competitive input costs for productive investments and affordable goods and services for poor and working-class households Skills, technology and innovation policiesbetter aligned to sectoral priorities Deploying these policies in general and in relation to more ambitious sector strategies, as set out in detailed Cross-cutting and Sector KAPs

26. INVESTMENT ENVIRONMENT & OPPORTUNITIES

27. South African Trade Agreements • South Africa – European Union (EU) Trade, Development and Co-operation Agreement (TDCA) • Southern African Development Community (SADC) FTA • Southern African Customs Union (SACU) – India Preferential Trade Agreement (PTA) • Southern African Customs Union (SACU) - European Free Trade Association (EFTA) FTA • Africa Growth and Opportunity Act (AGOA) • SACU –Southern Common Market (Mercosur)Preferential Trade Agreement

28. South Africa’s leading trade partners Source: Quantec, 2011

29. South Africa’s leading investment partners Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com

30. South Africa’s FDI Composition Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com

31. STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES

32. Strategic Location on Shipping Routes • South – South Trade • Important to the BRICS countries • Important to T-FTA - SADC, COMESA and EAC • Vulnerability of the Suez Canal • Political instability • Somali pirates

33. Made by SA industrial capabilities Dubai Burj Al Arab

34. Customs Secured Area Services Enterprises IDZ Industry & Service Area One Stop Center Industrial Development Zone IDZ’s are considered part of the Customs Territory of South Africa. Customs Controlled Area JIA RCB Customs Territory of South Africa EL Coega An IDZ is located adjacent to a port allowing importation of raw materials, plant machinery & equipment; and the export of finished products;

35. New Deepwater Port Of Ngqura • 80,000 DWT Bulk Carriers • 9 000 TEU Cellular Containership • Inner Basin 16.5 m below CD • Entrance Channel 18m • 175,000 DWT Bulk Carriers

36. East London IDZ Multi-Level Car Terminal Containerisation Dry Dock & Ship Repair Grain Elevator

37. Johannesburg International Airport IDZ

38. Richards Bay Idz

39. Future Aviation Cluster Development on State Land Factory Expansion New Aerosud Supplier Park Aerospace Aviation Village

40. Investment Opportunities Source: DTI/TISA

41. Investment Opportunities Source: DTI/TISA

42. Investment Opportunities

43. Incentives

44. Incentives

45. South Africa’s investment environment South Africa today is one of the most sophisticated and promising emerging markets globally, mainly because of … Abundant natural resources Political & economic stability with sound macro-economic management Excellent transport & logistical infrastructure Competitive sectors/industries World class financial system Skills availability Favourable cost of doing business