South African Economy

1. South African Economy

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. 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 3.2% -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

6. 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

7. 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

8. 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 Ngqura is 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

9. 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.o labour productivity South Africa – emerging market perspective Source: Brazil National Confederation of Industry. Competition Brazil 2010: A Comparison of selected countries

10. 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

11. 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

12. 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

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

14. 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

15. 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

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

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

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

19. INVESTMENT ENVIRONMENT & OPPORTUNITIES

20. 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

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

22. Exports to Turkey

23. Imports from Turkey

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

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

26. 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

27. World Class Capability South African Construction and Steelwork on ALL continents, including Antartica! International icons constructed include Burj al Arab Hotel - Dubai, Emirates Towers - Dubai, Khalifa Sports Hall Asean Games 2006 – Qatar and many more!

28. World Class Capability Examples of complete stadiums, including all civils and steelwork built for the World Cup. Our steelwork is to be found in and around all the stadiums! Moses Mabhida Stadium, Durban Greenpoint Stadium, Cape Town Soccer City, Soweto

29. World Standard Comparison • Birds Nest Beijing, China • Steel – 110,000 tons • Construction period - 5 years • Cost $423m in 2008 terms • 80,000 seating capacity • Soccer City JHB, SA • Steel – 110,000 tons • Construction period – 3 years • Cost $445m in 2010 terms • 90,000 seating capacity

30. Infrastructure Development Securing Electricity Supply Eskom has spent over R75.5 billion on the capital investment programme since 2005, and has delivered some 5 031 Megawatt of new electricity generating capacity into the system as well as thousands of kilometres (3 051 km) of high voltage transmission lines to transport electricity across the country. Eskom, through its Medium Term Power Purchase Program (MTPPP), has signed agreements with three Independent Power Producers (IPPs) since April 2010, totaling some 277 MW with a number of contracts in the final stages of completion, which will bring the contracted power purchases to around 400MW this year. Eskom has embarked on returning to service it’s previously “mothballed” coal-fired power stations. . The total RTS (return to service) portfolio will add 3 800 MW nominal capacities to the national electricity supply system.

31. Infrastructure Development Water The Department of Water Affairs has identified seven (7) new augmentation water resources infrastructure projects to support the domestic, industrial, agriculture and energy sectors Communication infrastructure Broadband Infraco continues to invest in its national backbone fibre optic network with R243 million spent in the 2009/10 financial year. Broadband Infraco’s fibre optic cable network now covers approximately 12 250km country-wide. Enables the country to extend connectivity to the SADC Region to countries such as Lesotho, Namibia, Botswana, Mozambique, Zimbabwe and Swaziland.

32. Infrastructure Development Transport infrastructure Maintenance of secondary road infrastructure using labour intensive methods of construction and maintenance. We have set aside R6.4 billion in 2011/12, R7.5bn in 2012/13 and R8.2bn for 2013/14, amounting to a total of R22.3bn in the medium term. At least 70 000 jobs will be created in 2011. Rail modernisation programme The Gautrain forms an integral part of our rail modernisation programme. Starting in June 2011, the Gautrain will move at least 40 000 people hourly on the commuter line between Johannesburg and Tshwane stress-free and in less than 40 minutes. The system includes 125 feeder buses operated by a consortium that includes taxi operators. The recapitalization of PRASA rolling stock, Extension of the Gautrain from Sandton to Hatfield, and the Modernisation of our long-distance passenger and freight services.

33. 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 ORT 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;

34. 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

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

36. Richards Bay Idz

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

38. Investment Opportunities Source: DTI/TISA

39. Investment Opportunities Source: DTI/TISA

40. Investment Opportunities

41. Incentives

42. Incentives

43. 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

44. Sector Information Finance to explore investment opportunities in SA Facilitating direct Government support in the form of: - information on investing in SA and the Business Environment - detailed investment Incentives - investment facilitation - after care – ongoing contact the dti’s Investment Services • Contact Details • the dti Call Centre: 0861 843 384 • the dti Switchboard: +27 12 394 0000 • Investment Promotion: +27 12 394 1339/1032 • Website: www.thedti.gov.za • E-mail: investmentsa@thedti.gov.za • Postal Address: Private Bag X 84, Pretoria 0001 • South Africa

45. THANK YOU