Investing into South Africa Investment Environment & Opportunities 1

South Africa at a glance Area 1,22 million km 2 Population 53m (estimate) Head of the State: President Jacob Zuma 11 Official languages with English the business language Total GDP: 2014 US$ million) GDP 2014 per capita: US$ Real GDP Growth: 1.3% (2015) Inflation (CPI): 5,23% (2015 annual average) Main Exports; minerals & mineral products, precious metals & metal products, chemical & food products, automotives & components. Main trading partners: China, USA, Japan Germany, India & the UK.

South Africa’s Sovereign Ratings South Africa’s Sovereign Ratings (May 2014) Rating AgencySouth Africa’s Rating Standard & Poors BBB- Moody’sBaa2 Fitch RatingsBBB- Source: Trading Economics 3

SADC Free Trade Agreement provides access to 200Million + Consumers Future FTA with SADC, COMESA & EAC (26 countries) with a market of 700million + Consumers 4

5 Market of 600 million consumers! South Africa already has distribution channels in most of these countries.

South African Economy Open economy Sound business case for investment and profit Gateway to Africa and markets of more than 200 Million consumers Source:SARB YEAR 1994 THEN2004IN 2014 GDPR 482 bn US$ 60 bn R bn US$ 171 bn R bn US$ 350,09 bn Merchandise exports (billions) R 69, 8 US$ 8.7 R 281,8 US$ 35,2 R 988,2 US$ 84,3 GDP Growth3,2%4,6% 1,5 %

South Africa’s leading Import Partners (2014) 7 Import Country US Dollars Billion China15.5 Germany10.0 Saudi Arabia 7.1 United States of America 6.6 Nigeria 5.1 India 4.6 Japan 3.8 United Kingdom 3.3

8 South Africa’s leading Export Partners (2014) Export Country US Dollars Billion China8.6 United States of America6.4 Japan4.8 Botswana4.7 Namibia4.5 Germany4.2 India3.7 United Kingdom3.4

South Africa – a conducive environment World Economic Forum’s Global Competitiveness Index (2014/15) shows that South Africa is: # 2 accountability of of private institutions # 1 in the strength of auditing and reporting standards # 3 in the efficacy of corporate boards # 3 in the protection of minority shareholders’ interests # 2 in the regulation of securities exchanges # 1 in financing through local equity market # 2 the availability of financial services # 8 in the soundness of banks # 14 in the strength of investor protection # 14 in the quality of air transport infrastructure #1 Overall highest ranking in the sub – Sahara Africa 49 th overall ranking out of 149 countries and # 3 of all the BRICS economies

Current Economic Relations Bilateral Trade volume in 2015 was $ 1,1 billion Turkey’s export to South Africa totalled $ 583 million Turkey’s imports from South Africa totalled $ 544 million The trade balance was slightly in Turkey’s favour in

Turkey South Africa Trade 2015 Turkish Exports to SATurkish Imports from SA 11

Economic Relations: Investment Two way flow of investment between the countries Turkey has invested through medium and large business expansion: Growth of current business to SA or Relocation to SA, various attractive reasons South Africa investment in Turkey, largely big company acquisition: Naspers 100% purchase of Markofoni Mondi Paper, 13 production plants in Turkey SAB Miller 24% purchase of Efes Brewery (1,9 Billion US $) MetAir purchased of Mutlu Automotive Batteries (175 million US $) 12

Economic Relations: Investment cont. Large acquisition investments by South African companies resulted in investment imbalance toward South Africa, particularly EFES deal with SAB Miller and MUTLU Purchase BUT Arçelik recently purchased Defy in South Africa for $ million. Both brand and production capacity, making South Africa Arçelik’s 2 nd biggest centre after Turkey. DHT Consortium recently purchased Cape Iron and Steel Corporation for $ 150 million - $ 50 million incentive from SA government This investment with some other potential investments in the pipeline may even the investment imbalance that exists.

South Africa is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy. South Africa is one of the world’s 26 industrialised nations & 27 th largest economy The country is also regarded as the gateway to Africa. South Africa has the 2 nd largest economy on the African continent, accounting for approximately 25% of the continent’s GDP. The JSE Securities Exchange is Africa’s largest and most developed Securities Exchange and one of the world’s top 20 exchanges. South African economy is the most diversified African economy South Africa- global perspective

Why South Africa for FDI? South Africa offers the returns without the high risk! South Africa has the most diversified economy in Africa offering multiple investment opportunities to the savvy investor That African investments tend to be in capital intensive one product economies; the energy sector in Angola and Nigeria The FDI is mostly concentrated in the telecommunications sector in The country is the third largest in capital FDI recipient in Africa, after Nigeria and Mozambique, and the largest FDI provider. Globally, South Africa ranks 15th among the most attractive economies for transnational companies for

Why South Africa for FDI? 16

South Africa’s FDI Composition 17

Investment Incentives * These are a few possible options on incentives; more options can be found at or the Embassywww.dti.gov.za

Industry & Service Area Customs Secured Area Services Enterprises One Stop Center IDZ 2. Free Port 1. Industrial Development Zones (considered as part of the Customs Territory of South Africa) Coega EL RCB ORT Customs Territory of South Africa New Policy Instruments to Attract Investment SB 3.. Free Trade Port 4. Sector Specific Zones SPECIAL ECONOMIC ZONES:

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

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 South African Investment Services Contact Details South African Embassy: South African Embassy: Economic Office: Economic Office: Website: / / / / Postal Address: Filistin Sokak, 27Postal Address: Filistin Sokak, 27 GOP, Cankaya Ankara06700

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