2. 11 October 2005 A Walk Through the Global Village Dawie Roodt Efficient Group Presented by

3. Index Us Our Neighbours Us and Them Global Hotspots If I was the Minister Threats Pick Your Currency What now?

4. Us

5. Economic Aggregates 20042005 Fiscal Deficit (Fiscal)-1.6%-0.9% CPIX (average)4.3%4.2% Prime Interest rate (year-end)11.0%10.5% PSCE (year-end) adj16.1%18.6% Current Account : GDP-2.9%-2.7% R/$ (year-end)5.736.51 GDP (full year)3.7%4.4%

6. Outcome: Revenue R bnBudget ‘04EfficientDifferenceBudget ‘05EfficientDifference Personal Tax105.9110.84.9116.9123.26.3 Company Tax68.871.32.568.787.518.8 VAT89.598.18.6106.0109.53.6 Excise Duties13.113.80.714.513.6-0.9 Fuel levy17.418.71.320.720.90.2 Other32.334.62.343.344.81.3 Total327.0347.320.3370.1399.529.3

7. State Finance

8. Government Finance

9. Inflation

10. Interest Rates De Kock Stals Mboweni

11. BoP

12. Rand Valuation Gold $800 Rubicon Stock market crash ANC, Reds fall Elections Exchange controls Asian Wakefordgate Rus, Zim, Arg Fin Rand NOFP +NOFP -

13. GDP

15. Our Neighbours

16. 4% of African Area 23% of African GDP 21.2% of African Exports

17. Mistakes made in Africa Idolise Leaders Marketing Boards Nepotism Incompetence Corruption Poor Fiscal Discipline Too Relaxed Monetary Policy Unrealistic Projects ????????

18. GDP Source: UN

19. AIDS Source: UNAIDS

20. Us and them

21. $ € Yuan ¥ £ R

22. Euro Composition CountryCurrencyConversion rate:€1 AustriaSchillings13.76 BelgiumFrancs40.34 FinlandMarkkaa5.95 FranceFrancs6.56 GermanyDeutsche Marks1.96 GreeceDrachmae340.75 IrelandPound0.79 ItalyLire1936.27 LuxembourgFrancs40.34 NetherlandsGuilder2.20 PortugalEscudos200.48 SpainPesetas166.39

23. $ € Yuan ¥ 15 years?

24. $ € Yuan ¥ € 50 years?

25. $ € ? € Sensible?

26. Percentage of World, ‘04 CountryCountry AreaGDPGDP per CapitaInternational Trade (03) Africa 20.3%2.2%$8952.5% South Africa 0.8%0.5%$4 5070.4% Japan 0.3%11.4%$36 5014.4% France 0.4%5.0%$32 9845.2% Germany 0.2%6.8%$33 1627.9% UK 0.2%4.3%$35 7184.5% USA 6.4%27.6%$35 71812.2% China 6.4%4.5%$1 2832.5% Russia 11.4%1.5%$4 04716.8% India 2.2% $6260.9% Brazil 5.7%1.9%$3 2250.9%

27. GDP, y:y Q2 05 Source: Economist

28. GDP, 99 – ’03 avg Source: World Bank

29. Inflation, Aug 05 Source: Economist

30. Interest Rates, Aug 05 Source: Economist

31. Africa - Loser FDI In: $15bn FDI Out: $1.3bn Western Europe FDI In: $310.2bn FDI Out: $350.3bn North America FDI In: $36.4bn FDI Out: $173.4bn South America FDI In: $49.7bn FDI Out: $10.7bn Central & Eastern Europe FDI In: $20.9bn FDI Out: $7.0bn Asia - Winner FDI In: $107.1bn FDI Out: $23.6bn FDI Flows 2003 Source: World Bank

32. Global Hotspots

33. Hotspot If China grows at its five year average (8.52%) it will surpass the US in 2040 if the US continues at 2.78%

34. Tax systems PersonalCorporateDividendsSales, value added France49.58% (€47 131)34.33% territorialIncome tax19.6% Germany47% from (€52 293)27.9575%Income tax, 50% exempt 16.0% Japan50% nat.; local (¥18m) 30.0%Comp tax 50% exempt; income tax 16.0% UK40% (£30 500)30.0%10%; 32.5% (£30 500)17.5% USA35% Fed; 0-11% state ($311 950) 35.0% Federal + 0-12% state Comp tax; 5-15%; double taxed 0% Federal + 0-7.25% state SA40% from R300 00029%12.5% exempt in indv14%

35. Flat Taxes Systems Flat tax first introduced in the 19 th century Estonia – 24% Latvia – 25% Russia – 13% Slovakia – 19% Romania – 16% US States ranging from 3.5% - 5.3% Illinois Indiana Massachusetts Michigan Pennsylvania Canada provinces –Alberta – 10.5%

36. Considering Flat Tax Systems Poland – 15% Greece – 25% Czech Republic Croatia The Netherlands – 40% USA

37. If I was the Minister

38. Tax Requirements Consumption tax + 6% Redistribution tax + tax on dividends Sin taxes

39. Tax Requirements Consumption tax + 6% Redistribution tax + tax on dividends Sin taxes No corporate taxes No other taxes

40. Threats

41. Oil: Impact

43. Commodities

44. Pick Your Currency

45. International Currencies

49. What now?

50. Asset Allocation, 2005 Reason DomesticRatings upgrades, GDP, Commodities International ( )Uncertainty over oil price; economic recovery – Heavy Overweight – Overweight – Neutral – Underweight – Heavy Underweight

51. Asset Allocation, 2005 DomesticInternational Equities Property( ) Bonds Cash – Heavy Overweight – Overweight – Neutral – Underweight – Heavy Underweight

52. www.efgroup.co.za