African Business Outlook Part of the Global Business Outlook

1. African Business OutlookPart of the Global Business Outlook A joint survey effort between Duke University, The South African Institute of Chartered Accountants and CFO magazine

2. CFO Global and African Business Outlook – Overview 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 and the African Business Outlook SAICA joined the survey in 2013, helping to found the African Business Outlook. South African results are highlighted in the analysis, as are results from Nigeria and the rest of Africa, enabling SAICA and other survey partners to share key insights about the African economy with members of the Institute and others focusing on Africa. The analysis in this report will assist companies to make important business decisions as they can benchmark themselves against their global peers. The long run goal is to develop a large and steady set of responding African firms. • Key Survey Facts • Survey Respondents: 74 • Of which, 44 from South Africa, 9 from West Africa (excluding Nigeria), 4 from Nigeria, and 17 from MENA other parts of Africa • The small number of respondents may skew some results outside of South Africa • Sample includes CFOs from both public and private companies representing a broad range of industries • 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 landscape of corporate finance. African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

3. Sentiment Regarding Domestic Economy African optimism about the next 12 months remains low Trends in South African Optimism CFOs are less optimistic about the domestic economy • 67% of South African CFOs report being less optimistic about the domestic economy this quarter Sentiment towards domestic economy • Unlike South Africa, CFOs surveyed in the Rest of Africa are more optimistic about their domestic economies • Overall average suggests CFOs are less optimistic but this is likely due to high response rate from South Africa When ranked on a 100 point scale, the African Optimism Index (for the economic prospects of the continent over the next year) increased from 49.4 in Q2 2014 to 51.7 in Q3 (South Africa: 53; ROA: 51.5). African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

4. Own Company Sentiment Most African CFOs are optimistic about their own companies, despite being less optimistic about the overall economy; own-firm optimism is especially high in Nigeria Own-company optimism has decreased over the past year in South Africa • Although South African CFOs remain optimistic for their own companies on average, a pattern of decreasing optimism has emerged All surveyed Nigerian CFOs have grown more optimistic about their company this quarter compared to last • Throughout the rest of Africa, CFOs are more optimistic about their own companies then they were three months ago When ranked on a 100 point scale, the Own-Company African Optimism Index (for the economic prospects over the next year of each CFO’s own company) increased from 61.5 in Q2 2014 to 65.5 in Q3 (South Africa: 67.8, Nigeria: 63.8, ROA: 62.2) African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

5. African Business Optimism Compared to Rest of World African Business Optimism slightly recovers from last quarter. Business Optimism Index (by Continent) Own-Firm Business Optimism Index Over the past few quarters, African CFOs have become increasingly less optimistic about their domestic economies, with a slight rebound this quarter • Economic optimism in the USA and Asia are stable and high, while optimism in Africa and Latin America remain low. African CFOs are more optimistic about their own firms than they are about the continent overall, and they are at the median in the world • Own-company optimism recovers in all regions except for Latin America African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

6. Top 10 Corporate Concerns for African CFOs Concerns of African CFOs vary by country, with governmental policies being one common concern. Top 10 Corporate Concerns African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

7. Growth in Revenue, Earnings, Spending, Other Budget Items Compared to last quarter, South African CFOs expect larger growth in earnings but slower growth in spending (capital and technology). Other expectations are similar to last quarter. South African CFOs anticipate modest growth in dividends, R&D spending, and Marketing but the rate of growth is reduced relative to last quarter’s predictions • Significant growth is expected in Revenues, Tech spending (>10%); • Earnings are expected to grow more strongly, compared to last quarter’s expectation. African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

8. Minimum Wage and Reducing Labor Needs African firms typically pay the workforce a higher wage than the minimum wage Only around 16% South Africa workers in the surveyed firms are paid minimum wage, much lower than Asia. The percentage of minimum-wage workers is 7.2% in the US, 7.0% in Europe and 8.3% in Latin America. • African CFOs plan to slowly invest in labor-saving technology, less so than in other regions of the world. • Fewer than 30% of the S.A CFOs say that they have made or plan to make capital investment to reduce labor needs, Nigerian CFOs are more active in such spending (50%). African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

9. Political Contributions Firms in emerging markets are less likely to make political contributions, even where permitted by local laws. • Fewer than 20% of South African CFOs indicate that their firms make political contributions, which is among the lowest in all the surveyed regions. • European and US CFOs show higher rates of making political contributions, aimed at making sure that their corporate views are heard by policy-makers African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014

10. Managing Corporate Tax Exposure Do you Agree or Disagree with the following statements about managing your company's corporate tax exposure. • Companies overwhelmingly agree that managing corporate tax exposure is important • Taxes affect business strategies and where to locate operations • Responses are very similar in other regions of the world. African Business Outlook Duke University / SAICA / CFO Magazine Sept 2014