Presentation to the US-South African Women's Business Forum Chicago by Pumla Ncapayi, Department of Trade and Industry Deputy Director General for Trade and Investment October 24, 2011

1. Trade & Investment South Africa
Department of Trade and Industry
PUMLA NCAPAYI
Deputy Director General

2. INVESTMENT ENVIRONMENT
&
BUSINESS OPPORTUNITIES

3. South Africa fast facts
•Area 1,219, 090 km2
•Head of the State: President Jacob Zuma
•11 Official languages with English the business language
•Est. Population: 49,9 million

4. South Africa at a glance
Indicator 1994 2009
Total Population 38,283,223 49,320,150
% of Total Population under 15 years 37% 31%
Adult Literacy Rate (1990) 76.2 % 88.8%
Internet Users 100,000 4,420,300
Mobile Telephone Subscriptions 340,000 46,436,000
GDP per capita (constant 2005 prices) R 27,400.12 R 37,261.16
FDI (net inflows % of GDP) 0% 2%
Gross Fixed Capital Formation (% of GDP) 15% 23%
Source: World Bank Development Indicators 2010

5. Strategic Location on Shipping Routes
• South – South Trade
• Important to the BRICS countries
• Vulnerability of the Suez Canal
• Political instability
• Somali pirates

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

7. Investor’s plans in Africa
1%
29% Withdraw from Africa
8% Can't say
Maintain operations in Africa
19% Invest in Africa
43% Not invest in Africa
Source: Ernst & Young’s 2011 Africa attractiveness survey

8. 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

9. South Africa- global perspective
• 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 non permanent 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 quicken from 2.8% in 2010 to 3.2% in
2011 and 4% in 2012, helped by stronger external demand and looser fiscal
policy.
Source: SouthAfrica.info; Economist Intelligence Unit

10. South Africa - global perspective
• 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 mines at
approaching 4km.
• South Africa houses one of the three largest telescopes in the world at
Sutherland in the Karoo.
• SA has 45 million active cell phones (population 49 million) – ranking in
the top 5 globally 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
Source: SouthAfrica.info

11. South Africa’s Competitiveness
• Ranked 50th out of 142 countries in the World Economic Forum’s Global
Competitiveness Report.
• Highest of Sub-Saharan Countries
• 2nd after China in BRICS group of countries
• Ranked 1st in strength of auditing and reporting standards
• Ranked 1st in regulation of securities exchanges
• Ranked 2nd in soundness of banks
• Ranked 3rd in protection of minority shareholders’ interests
• Ranked 4th in financial market development
• Ranked 8th in the legal rights index
• Ranked 10th in investor protection
• Ranked 25th in the market size pillar
• Ranked 30th in intellectual property protection

12. South Africa – emerging market perspective
Of 14 emerging markets; Australia, Canada, Russia, Mexico,
China, Poland, Spain, India, Korea, Brazil, SA, Colombia Chile &
Argentina
South Africa is:
• 2nd most sophisticated financial market
• 2nd lowest effective business tax rate
• 4th ranked for ease of accessing capital
• 4th ranked i.t.o. the cost of capital
• 6th ranked for infrastructure
• 7th for FDI as a % of GDP (2008)
• 8th ranked i.t.o labour productivity
Source: Brazil National Confederation of Industry. Competition Brazil 2010: A Comparison of
selected countries

13. South African Economy
Subject Descriptor 2005 2010 2015
GDP growth 5.277 2.784 4.5
GDP per capita (constant prices) 33,507 36,730 42,280
Investment (%GDP) 17.958 21.698 20.855
Import volume of goods and services growth (%) 10.879 4.584 6.3
Export volume of goods and services growth (%) 8.568 5.036 6.452
Population (million people) 46.888 49.912 52.979
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

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

15. Industrial Policy Action Plan II
1. Macro-economic policies which support more competitive and
stable real exchange and interest rates
2. Industrial financing channelled to more labour-intensive and
value-adding sectors
3. Leveraging procurement to raise domestic production and
employment in a range of sectors
4. Developmental trade policies such as tariffs and standards
deployed in a selective and strategic manner
5. Competition and regulation policies: competitive input costs for
productive investments and affordable goods and services for poor
and working-class households
6. Skills, technology and innovation policies better aligned to
sectoral priorities
7. Deploying these policies in general and in relation to more
ambitious sector strategies, as set out in detailed Cross-cutting
and Sector KAPs

16. South Africa’s Tops the BRICS for Ease of Doing Business
Country Overall Rank Getting credit Protecting investors
South Africa 34 2 10
China 79 65 93
Russia 123 89 93
Brazil 127 89 74
India 134 33 44
Source: World Bank Group, 2011

17. South Africa’s leading trade partners
South African Exports 2010 – top 10 South African Imports 2010 – top 10
Rank Country Proportion Growth Rank Country Proportion Growth
2010 Name % Total 2009 - 2010 2010 Name % Total 2009 - 2010
1 China 11.48% 20.28% 1 China 16.89% 14.22%
2 United States 10.08% 25.26% 2 Germany 5.45% 11.35%
3 Japan 9.08% 36.42% 3 United States 0.93% 7.14%
4 Germany 8.34% 31.49% 4 Japan 17.01% 5.34%
5 United Kingdom 5.13% 4.20% 5 Saudi Arabia -11.01% 4.12%
6 India 4.36% 24.23% 6 Iran 4.04% 4.00%
7 Netherlands 3.35% -7.15% 7 United Kingdom 2.30% 3.81%
8 Switzerland 3.28% -21.29% 8 India 33.92% 3.58%
9 Zimbabwe 2.93% 12.53% 9 France 1.58% 2.93%
10 Mozambique 2.68% 5.53% 10 Nigeria 3.10% 2.80%
Source: Quantec, 2011

18. South Africa’s export composition
Rank COUNTRY Proportion Growth
2010 Name %Total 2009-2010
1 Basic non-ferrous metals 39.40% 43.19%
2 Basic iron & steel 13.02% 23.75%
3 Motor vehicles, parts & accessories 10.27% 9.19%
4 Machinery & equipment 7.03% 9.91%
5 Basic chemicals 5.73% 11.34%
6 Food 3.67% 4.03%
7 Other industries 3.39% -2.13%
8 Coke & refined petroleum products 2.55% -8.67%
9 Paper & paper products 2.24% 8.03%
10 Other chemicals & man-made fibers 1.95% -3.70%
Source: Quantec, 2011

19. South Africa’s leading investment partners
Investment in South Africa – top 10 Investment from South Africa – top 10
2003 - 2010 2003 - 2010
Rank Country Proportion % Rank Country Proportion %
1 United States 17.21% 1 Qatar 18.60%
2 Australia 13.60% 2 China 14.95%
3 UK 11.52% 3 Ghana 14.00%
4 Germany 7.26% 4 Nigeria 8.33%
5 India 6.03% 5 Canada 4.78%
6 Japan 5.00% 6 Mozambique 4.64%
7 Canada 4.59% 7 Indonesia 4.15%
8 Ireland 4.59% 8 United States 3.46%
9 Norway 4.06% 9 Seychelles 2.70%
10 Switzerland 3.91% 10 Iran 2.56%
Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com

20. South Africa’s FDI Composition
Rank Sector Proportion %
2003 - 2010
1 Coal, Oil and Natural Gas 25.13%
2 Metals 20.75%
3 Automotive OEM 8.15%
4 Alternative/Renewable energy 7.53%
5 Communications 7.32%
6 Hotels & Tourism 5.49%
7 Real Estate 3.00%
8 Chemicals 2.89%
9 Building & Construction Materials 2.78%
10 Transportation 1.89%
Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com

21. 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

22. Trade Agreements in Africa
Source: Ernst & Young’s 2011 Africa attractiveness survey

23. Investment Opportunities
Sector Sub-sector
Business Process •Call Centres
Outsourcing & IT •Back /office Processing
Enabled Services •Shared Corporate Services
•Enterprise solutions e.g. fleet management and asset management
•Legal process outsourcing
Electro Technical •Software & mobile applications
•Smart metering
•Embedded software
•Radio frequency identification
•Process control , measurement & instrumentation
•Security & monitoring solutions
•Financial software
Clothing, Textiles, •Manufacturing of Industrial Textiles using Polyester
Leather and •Production of other natural fibre textiles such as flax
Footwear
•Wool and mohair production – downstream opportunities for yarns, knitwear
and fabric.

24. Investment Opportunities
Sector Sub-sector
Agro-processing Fisheries and aquaculture i.e. freshwater aquaculture & marinculture
Food processing in the milling and baking industries
Beverages viz. fruit juices and the local beneficiation, packaging and export of
indigenous teas
High value natural fibres viz., organic cotton & downstream mohair production
High value organic food for the local and export market
Biofuels production viz. biodiesel & bioethanol
Automotives & Engine parts/components, vehicle interiors, electronic drive train
Components components, body parts, catalytic converters, aluminum forgings & castings,
diesel particulate filters and leather products
Chemicals and Beneficiation of polypropylene used in automotive components & building and
plastic fabrication construction industries, packaging materials
Medical (drips & syringes), manufacture of active pharmaceutical ingredient
(APIs) for key anti-retrovirals (ARVs)
Manufacture of reagents for AIDS/HIV diagnostics
Production of vaccines and biological medicines

25. Investment Opportunities
Sector Sub-sector
Metal fabrication, •Downstream processing and value adding of iron, steel, aluminium,
capital and stainless steel ferroalloys and the platinum group of metals (PGM)
transport • Conversion processes of metal products i.e. metal fabrication, pipe & tube,
equipment foundry products, wire and jewellery
•Manufacturing and assembly of mining, agricultural and construction
equipment
•Utilities i.e. reticulation plants and pipe lines.
•Machine tools and tooling (auto, packaging, mining and aerospace
industries)
•Electrical motors
•Services in the engineering, construction sectors
•Rolling stock i.e. locomotives, wagons and coaches
•Production of permanent ways i.e. railway lines, signalling equipment,
electrification, bridges and stations
•Harbour construction and equipment
•Ship- and oil platform building and maintenance

26. Investment Opportunities
Sector Sub-sector
Tourism •Accommodation – hotels, boutique hotels, lodges & resorts
•Urban integrated tourism/ entertainment precincts
•Adventure, - eco-, sport-, conference - and cultural tourism.
•Infrastructure development.
•Leisure complexes & world class golf courses.
•Harbour & waterfront developments.
•Transfrontier conservation areas.
•Tourism transport – aviation, rail, cruise liners etc
•Green building and green technologies for tourism
•Attractions and activity – based tourism
•Museums and heritage
•Cultural, music, arts festivals and events
Aerospace •Aviation related services, including maintenance, repair and overhaul (MRO)
•Rotary and fixed wing components.
•Aviation training services
•Specialised manufacturing of avionics, including health usage monitoring
systems
•Aerostructure components, specifically composites and sheet metal
(aluminium and titanium)
•Small and micro-satellite capability including sensor platforms
•Satellite related services (including tracking and control and applications
development)
•Specialised design expertise, systems level as well as first tier level.
•Unmanned Arial Vehicles (UAVs)

27. Investment Opportunities
Power generation Independent power generation, energy infrastructure & alternative energy
and distribution
Renewable energy Solar water heating, evacuated tube plants, concentrated solar heating,
and energy saving wind and biomass energy production
industries
Advanced Advanced materials manufacturing viz.
Manufacturing Nano-materials
•High performance materials based on natural resources (advanced bio-
composites)
•Composites (intelligent textiles used in medical, building and construction
industries)
•Continuous fibre reinforced thermoform composites
Digital TV and Set Top Boxes due to migration to full digital television as
analogue will be switched-off by November 2011.
Nuclear Build Programme i.e. joint ventures, consortiums and the
establishment of new companies to grow South Africa’s nuclear
manufacturing capability and nuclear supply industry to supply into the
nuclear build programme
Electricity Demand Side Management Solutions to improve electricity
efficiency usage.

28. Investment Opportunities
Creative and Design Industry Film and Media
Film studios, treaty film co-production ventures,
distribution infrastructure,
servicing of foreign productions.
Production of film and documentaries,
commercials, stills photography and
multi-media
Design
Jewellery manufacturing and design
Fashion design

29. Incentives
Incentive Benefit Main Conditions
The Enterprise The EIP (manufacturing) is a cash the EIP will be used to stimulate
Investment Program grant for locally based investment within manufacturing and
(EIP) manufacturers who wish to tourism, it will also be used to
establish a new production deliver on some of the IPAP's key
facility, expand an existing facility performance areas, as well as
or upgrade an existing facility in priority sectors.
the clothing and textiles sectors
Foreign Investment To compensate qualifying foreign Foreign investors only
Grant investors for the cost of moving
qualifying new machinery and
equipment from abroad to SA.
Industrial Exemption from VAT when Prospective IDZ operator companies
Development Zone sourcing goods and services from must apply for permits to develop
South African customs territory and operate an IDZ
and duty-free imports of raw
materials and inputs for export

30. Incentives
Incentive Benefit Main Conditions
Section 12i Tax Tax deductions of up to R 900m Valid until December 2015
Allowance depending on status viz. preferred Capital investment > R 200m
or qualifying projects.
Training allowance/ deduction of
up to R30m or R36 000 per
employee.
Critical Infrastructure Infrastructure projects intended The minimum qualifying
Fund
to service IDZ, shall qualify for a infrastructure development cost is
grant of 30% of the qualifying R15m
infrastructure development cost
The Location Film & To encourage and attract large Foreign owned qualifying productions
Television production budget films and television
Incentive
productions that will contribute
towards SA economic development
and international profile and
increase foreign direct investment

31. Incentives
Incentive Benefit Main Conditions
BPO & O Investment The BPO&O Investment Incentive Local and foreign investors
Incentive comprises an Investment Grant establishing projects that aim
and a Training Support Grant primarily to serve offshore clients
towards costs of company-specific
training. The incentive is offered
to local and foreign investors
Competitiveness Grants are to be used for the Clothing and Textile companies and
Improvement following interventions: clusters
Programme World-class manufacturing
principles.
Training
Labour relations and employee
wellness programmes
Product related
Supply chain integration
Industrial engineering
Competitiveness improvement
Bottom line business processes

32. Incentives
Incentive Benefit Main Conditions
Production Incentive Aims to help the industry upgrade Clothing manufacturers
(PI) its processes, products and Textiles manufacturers
people. Cut, Make and Trim (CMT) operators
Footwear manufacturers
Leather goods manufacturers and
Leather processors (specifically for
leather goods and footwear
industries).
Automotive A taxable cash grant of 20 percent Motor vehicle
Investment Scheme of the value of qualifying assemblers/manufactures.
(AIS investment in productive assets
Motor component manufacturers

33. Coega IDZ & Port Infrastructure

34. the dti’s Investment Services
• 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
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