Overview of the Strategic Plan 2008 - 2011 Presentation to the Portfolio Committee on Trade and Industry 5 March 2008 1

Presenters Ms Philisiwe Buthelezi Mr. Andrew Wright Chief Executive Officer (Telephone +27 11 305 8000/ 8147 (Manager in the CEOs Office: Emma Riley) Mr. Andrew Wright Chief Operating Officer (COO) Mr. Frencel Gillion Chief Investment Officer (CIO) Mr. Moemise Motsepe Manager: Marketing & Communications Ms Hlengiwe Makhatini Pre-Investment Manager 2

Mission Statement broad- based Black Economic “The National Empowerment Fund (NEF) is the catalyst of broad- based Black Economic Empowerment in South Africa. We enable, develop, promote and implement innovative investment and transformation solutions to advance sustainable Black economic participation.” 3

NEF Mandate Main objective Driven by Development focus To be a catalyst in facilitating economic equality and transformation Driven by Current market needs Broad-based empowerment charters Government policy and sectoral charters (Industrial Policy) Addressing past failures of BEE structures Broad Based BEE Codes of Good Practice Development focus Maximise the empowerment dividend 4

Key Objectives of the NEF Promote and support business ventures pioneered and run by black people; Promote the understanding of equity ownership among black people; Provide black people with direct and indirect opportunities to acquire share interests in State Owned and private business enterprises; Encourage and promote investments, savings and meaningful economic participation among black people. 5

Key Objectives of the NEF Strategic Plan To create a prudently and effectively managed fund with a time horizon of at least 10 years; To ensure broad-based and sustainable empowerment; To act as a catalyst to stimulating Broad Based BEE and hence economic growth; To avoid duplicating existing offerings by other operating Development Finance Institutions (DFIs); To work in partnership with both public and private sectors; To maximise the empowerment dividend in lieu of the financial dividend; To protect the capital base of the NEF and provide a real return. 6

NEF’s Performance Criteria – “The Empowerment Dividend” The assessment of impact is not driven only by financial returns but by measurement in terms of “The Empowerment Dividend” made up as follows: Broad Based Black Economic Empowerment Ownership, management control, employment equity, skills etc Black Women Empowerment Job Creation Growth Sectors Geographic Spread Investment Return 7

Provincial Roundtables With effect from October 2007, NEF has launched Provincial Roundtables with stakeholders in the following provinces: KZN North West Limpopo The NEF has so far participated in Provincial Roundtables in Northern Cape (12 December 2007) and North West (7 March 2008) Objective is to optimise regional invested portfolio through intensive local interaction and communication Stakeholders include: MECs for Finance & Economic Affairs, as well as MECs for Agriculture, to encourage rural and community development Constituency Members of Parliament Local Development Finance Institutions (DFIs) Local entrepreneurs and co-operatives Mass Media Mpumalanga Northern Cape Free State 8

Strategic Initiatives NEF, in 2006/7, reached two significant and strategic milestones in its history since its establishment: On-going track record achieved in the Fund Management Division, with approvals to date now exceeding R600m; Asset Management Division was able to obtain the overall approval for the NEF’s first BEE Retail Product, Asonge, subsequently launched on 25 June 2007. 9

(INCL. UNDRAWN CAPITAL) NEF Invested Process Report 31 January 2008 ENQUIRIES Approx. 28,664 APPLICATIONS 5,908 NEW DEALS ACCEPTED 24 worth R 344m DUE DILIGENCE 18 R 404m APPROVED 13 R 245m DISBURSED (INCL. UNDRAWN CAPITAL) 102 R 631m NEF work in progress: 55 transactions worth R 993 million 10

NEF Approved & Disbursed Deals by Value 1 April 2007 - 31 January 2008 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 R 363m R 135m Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed 11

NEF Approved & Disbursed Deals by Number 1 April 2007 - 31 January 2008 5 10 15 20 25 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 23 16 Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed 12

FMD Portfolio by Sector by Value 31 January 2008 ICT & Media 14.3% Engineering 1.5% Manufacturing 8.3% Transportation 5.2% Mining Services 7.4% Printing 2.5% Motor Industry 1.8% Tourism & Entertainment Wood & Paper 2.0% Chemicals & Pharmaceuticals 5.4% Construction 25.6% Financial 1.1% Other 0.1% Food & Agro Processing 12.9% 3.1% Textile Industry 13

Asset Management Division 14

Asset Management Division Through its Asset Management Division, the NEF: Promotes the understanding of equity ownership among black people Provides black people with direct and indirect opportunities to acquire shares in State Owned and private business enterprises Encourages and promote investments, savings and meaningful economic participation amongst black people It is specifically to address the above objectives that the NEF Asonge Share Scheme was conceived, designed, launched, implemented, subscribed for and now allocated to its beneficiaries. 15

“The NEF Asonge Share Scheme” Subscriptions by Value 100% R 889,058,857.00 85,314   4.61% R 40,988,400.00 0.48% 410 90001 to 100000 0.05% R 446,000.00 0.01% 5 80001 to 90000 0.18% R 1,641,220.00 0.02% 21 70001 to 80000 0.24% R 2,147,282.00 0.04% 37 50001 to 60000 0.12% R 1,102,484.00 16 60001 to 70000 39.77% R 353,604,161.00 8.31% 7,091 40001 to 50000 4.30% R 38,256,743.00 1.17% 998 30001 to 40000 8.34% R 74,163,562.00 3.18% 2,717 20001 to 30000 12.57% R 111,795,894.00 7.38% 6,297 10001 to 20000 12.84% R 114,196,042.00 14.81% 12,637 5001 to 10000 16.95% R 150,717,069.00 64.57% 55,085 2000 to 5000 %age TOTAL VALUE TOTAL APPLICANTS INVESTMENT 16

Asset Management Division – Enabling Legislation NEF Act (No.105 of 1998) – Objects of the NEF Trust Policy Framework for an Accelerated Agenda for the Restructuring of State-owned Enterprises (August 2000) – requirement of the NEF to broaden empowerment with State Owned Commercial Enterprise (SOCE) allocations through individual & collective share ownership Cabinet Memorandum No. 32 of 29 November 2000, which was adopted on 6 December 2000 – SOCE equity allocations nominated for transfer to NEF 17

Asset Management Division – Designated State Allocated Investments Asset Shareholding % Status MTN Group 1.5 received by NEF Telkom 5 not yet received SAA 5 not yet received ACSA 10 not yet received Connex Travel 10 received by NEF Viamax 10 not yet received Syncat 10 not yet received Transwerk Perway 10 not yet received Sentech 10 not yet received Uthingo 5 received by NEF SAFCOL 10 in discussion 18

Key Strategic Interventions for NEF Asset Management Ensure that new products are aimed at accessible subscription levels and structures so that lower income groups are not excluded Address geographic access to product offerings through targeted communication campaigns, engagement with provincial government and existing Asonge share register Capitalise on the Asonge share register with future offers allowing investors to diversify and extend the reach of future offers through this channel 19

Fund Management Division On-going track record achieved in the Fund Management Division, with approvals to date now exceeding R600m. 20

Fund Management Strategy – Strategic Drivers PROCESSES MARKETING HUMAN CAPITAL Streamline investment reports Refine investment processes Establish post investment as separate unit – freeing resources Strengthen due diligence processes Compile Investment Manual Coordinated marketing strategy Develop partnership Pro-active Business Development Enhance NEF brand awareness Deepening skills base Encourage team work Build sector expertise Key recruitments Performance management focus Retention strategy Ongoing training 21

Fund Management Strategy – Strategic Drivers contd RISK MGMT PARTNERSHIPS PORTFOLIO MGMT Strengthen due diligence process Restructure post investment Establish portfolio limits to reduce over exposure Institutionalize investment process – Investment Manual Refine investment products / Criteria Build partnerships with banks, DFI’s, Private Equity firms Explore non-financial support partnerships Explore co-funding opportunities in large transactions Enterprise Development partnerships with corporates Portfolio allocation to reduce risk Portfolio Management Committee Dedicated Portfolio Management Unit Mentorship programmes Work-out Unit 22

FMD Portfolio by Stage of Investment 31 January 2008 (R) Value R138m R103m R390m R631m % By Value 21.9% 16.2% 61.8% 100% By Number 55 29 18 102 % By Number 53.9% 28.4% 17.6% 100% Early Stage Development Stage Later Stage 23

Budget 2008/9 24

Consolidated Budget for the years 2007 - 2011 R1 042m R 1 377m R1 632m   R 1 377m R1 632m R 1 970m R 315m TOTAL SURPLUS R1 377m R1 970m Including proceeds of the Asonge Share Scheme R 1 631m R 290m Surplus brought forward (R 335m) (R 255m) (R 338m) R 339m R 25m Surplus/ (Application of Surplus)  R765m  R123m  R 685m  R 114m  R 650m R107m  R 270m R 75m Actual/Budgeted Spending R 430m R 123m R 114m R 312m R 107m R 609m R 100m Budget Approved Capital Operations 2010/11 (MTEF) 2009/10 (MTEF) 2008/9 (MTEF) 2007/08 (actual) 25

We thank you for your attention. www.nefcorp.co.za 26

Fund Management Activity Reports for the year to date 2007/8 Appendices Fund Management Activity Reports for the year to date 2007/8 27

(INCL. UNDRAWN CAPITAL) NEF Invested Process Report 31 January 2008 ENQUIRIES Approx. 28,664 APPLICATIONS 5,908 NEW DEALS ACCEPTED 24 worth R 344m DUE DILIGENCE 18 R 404m APPROVED 13 R 245m DISBURSED (INCL. UNDRAWN CAPITAL) 102 R 631m NEF work in progress: 55 transactions worth R 993 million 28

iMbewu Fund - Work in Progress Corporate Fund - Work in Progress FMD Invested Process Report 31 January 2008 iMbewu Fund Corporate Fund Since inception to 31 January 2008 INFORMATION MANAGEMENT SYSTEM NEW DEALS ACCEPTED 24 worth R344m 14 R 132m 10 R 212m DUE DILIGENCE 18 R 404m 11 R 140m 7 R 264m APPROVED 13 R 245m 8 R 85m 5 R 160m WORK IN PROGRESS 55 R 993m 33 R 357m 22 R 636m iMbewu Fund Disbursed Corporate Fund DISBURSED (INCLUDING UNDRAWN CAPITAL) 102 R 631m 70 R 158.7m 32 R 472.5m iMbewu Fund - Work in Progress Corporate Fund - Work in Progress 29

FMD Approved & Disbursed Deals by Value 31 January 2008 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000 800,000,000 900,000,000 1,000,000,000 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 R 943m R 631m Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed 30

FMD Portfolio by Stage of Investment 31 January 2008 (R) Value R138m R103m R390m R631m % By Value 21.9% 16.2% 61.8% 100% By Number 55 29 18 102 % By Number 53.9% 28.4% 17.6% 100% Early Stage Development Stage Later Stage 31

FMD Portfolio by Product by Value 31 January 2008 Entrepreneurship Fund 14.1% Expansion Capital 0.0% Market 10.2% Franchise 3.9% Liquidity & Warehousing 13.8% Procurement 8.5% Rural & Community 3.3% Project Finance 3.8% Acquisition Funding 42.4% 32

FMD Portfolio by Sector by Value 31 January 2008 ICT & Media 14.3% Engineering 1.5% Manufacturing 8.3% Transportation 5.2% Mining Services 7.4% Printing 2.5% Motor Industry 1.8% Tourism & Entertainment Wood & Paper 2.0% Chemicals & Pharmaceuticals 5.4% Construction 25.6% Financial 1.1% Other 0.1% Food & Agro Processing 12.9% 3.1% Textile Industry 33

FMD Portfolio by Region by Value 31 January 2008 Gauteng 46.6% Limpopo 0.5% Western Cape 22.7% Mpumalanga 4.2% Eastern Cape 17.3% Kwa-Zulu Natal 9.0% Free State 0.0% 34

FMD Portfolio by Region by Number 31 January 2008 Kwa-Zulu Natal 10.3% Gauteng 59.8% Free State 1.0% Eastern Cape 8.8% Mpumalanga 2.0% Western Cape 15.7% Limpopo 2.9% 35

Job Creation Statistics 31 December 2007 Rand Invested Number of Jobs Existing Jobs New Jobs Rand Per Job 2,210 1,402 808 121,248 4,507 4,444 63 14,220 1,079 265 814 82,275 267,957,806 64,087,480 88,774,575 286 70 216 86,825 1,172 892 280 74,386 947 682 56,585 24,832,020 87,180,000 53,586,432 891 274 617 27,071 807 24,120,130 20,819,000 Acquisition Funding Capital Market Entrepreneurship Fund Franchise Liquidity & Warehousing Procurement Project Finance Rural & Community 11,899 7,612 4,287 53,060 631,357,443 64% 36% TOTAL PORTFOLIO: 36