SOUTH AFRICA MARKET SIZE POPULATION TOTAL POPULATION: (July 2001) Spanish Institute of Foreign Trade-Country Cards

2001 POLICY FRAMEWORK (October 2001) ZIMBABWE MOZAMBIQUE 44,560,644 Population density: (2001) FORM OF GOVERNMENT: Presidential Republic Head of State / Chief Executive: The President of the Republic, elected by the National Assembly from among its m embers. Since June 16, 1999, Thabo Mbeki (ANC). 36.5 hab./km2 BOTSWANA GROWTH RATE: (July 2001-July 2000) 2.4% URBAN POPULATION: (2001) 52.7% PRETORIA Bicameral Parliament: National Assembly (400 members) and Senate (10 members for each of the nine prov inces of South Africa), elected every five years. The next elections will take p lace in May 2004. DISTRIBUTION BY GENDER: (July 2001) MALE: FEMALE: Age distribution: (July 2001) 48.1% 51.9% PEOPLE MAIN CITIES: (Millions, 1996) JOHANNESBURG SWAZILAND 1.22 PRETORIA: (Administrative capital) NAMIBIA KIMBERLEY ORANGE

OR AN GE GOVERNING PARTY: The country is run by a coalition of two parties, the African National Congress (ANC) which won 266 seats in the National Assembly in the second democratic elec tions, held on June 2, 1999, and the Inkatha Freedom Party (IFP , 34 seats). The main opposition parties are the Democratic Party (DP, 38 seats), the National P arty (NP, 28 seats) and the United Democratic Movement (UDM, 14 seats). BIG JOHANNESBURG: 5.92 DURBAN: 0-14: 15-64: 65 +: 32.0% 63.1% 4.9% CAPE TOWN: PORT ELIZABETH: Bloemfontein: 3.37 2.75 1.12 0.61 Bloemfontein LESOTHO DURBAN ATLANTIC OCEAN INCOME EAST LONDON INDIEN OCEAN RED RIVER ROAD TERRITORIAL ORGANIZATION OF THE STATE: South Africa is divided into nine provinces with its own institutions (parliamen t, government and Prime Minister) and considerable autonomy: Western Cape, Easte rn Cape, Northern Cape, Free State, Kwazulu-Natal, North West, Gauteng, Mpumalan ga, Northern Province. Pretoria is the administrative capital, Cape Town and Blo emfontein the judicial legislation, while Johannesburg is the economic and finan cial center of the country. Gross Domestic Product GDP by expenditure components: Current prices (million South African rand, 2000) VALUE% CAPE TOWN Cape of Good Hope PORT ELIZABETH RAILWAYS main shopping 0,100,200,300 km Private consumption Public consumption Gross fixed capital formation (including changes in stocks) Exports of goods and services Imports of goods and services S tatistical discrepancy GDP at market prices 555 818 227 919 160 640 135 591 253 804 873 637 4297 63.6 18.3 15.5 29.0 -26.0 -0.4 100.0 GEOGRAPHIC FEATURES The Republic of South Africa (1,221,038 km2, of which 10% is cropland and 65% ar

e meadows and pastures) is at the southern tip of Africa. To the west the Atlant ic Ocean, east to the Indian Ocean, north to Namibia, Botswana and Zimbabwe and northeast by Mozambique and Swaziland. Two independent states are embedded in th e territory of the Republic, Lesotho, completely and partially Swaziland. Geogra phically, there are three major areas: - A large inland plateau that rises above 1,200 m, with a moderate continental climate, and flanked on its east end by th e Drakensberg mountain range. On this plateau the volume of rainfall decreases s teadily from east to west. - A narrow coastal strip east of the Drakensberg regi on including Kwazulu / Natal, the Transkei and Ciskei in the Eastern Cape. Despi te its small size and its irregular terrain, a very important contribution to ag ricultural production thanks to a mild subtropical climate and a good rainfall. - The area of the Western Cape in the southwest corner of the country, with a ty pical Mediterranean climate, and which concentrates much of the South African pr oduction of fruits, vegetables and wine. As befits a country in the southern hem isphere, winter runs from June to August and summer from December to February. SOCIAL INTEREST DATA ETHNIC GROUPS: The racial makeup of the South African population is as follows: black, 76% whit e, 13% mixed, 8.5% and Asians (Indians), 2.5%. RELIGION: 78% of the population profess any religion CHRISTIAN (68% Protestant and 10% Cat holic). Hinduism is the religion of about 2% of the population, while Muslims an d Jews represent 1.5% and 0.5% respectively. (2000) (Prev 2001) REAL GROWTH OF GDP: 3.0% 3.2% OFFICIAL LANGUAGES: Currently there are 11 official languages: English, Afrikaans, Zulu, Xhosa, Ndeb ele, Pedi, Sotho, Swati, Tsonga, Tswana and sell.€English is the language used mostly in the business world. GDP PER CAPITA: (U.S. dollars, 2000) 2877 NATURE OF THE ECONOMY ECONOMIC ACTIVITY (Fiscal Year: April 1 to March 31) TRANSPORT AND COMMUNICATIONS INFRASTRUCTURE GDP by industry Current prices (millions of rands, 2000) VALUE% EMPLOYED POPULATION BY SECTOR: (1999) AGRICULTURE AND MINING: INDUSTRY AND CONSTRUCTION: SERVICES: UNEMPLOYMENT RATE: (2000)

30% 20% 50% 30% Agriculture, Fisheries and Forestry Industry Mining Electricity, gas and water C onstruction Trade and Tourism Distribution Transport, storage and communication Finance, insurance and business services Personal, Social and Community Public A dministration Other GDP at factor cost 25,375 51,563 148,875 22,995 22,152 103,923 80,063 160,954 23,532 129,735 24,826 793,993 3.2 6.5 18.8 2.9 2.8 13.1 10.1 20.3 3.0 16.3 3.1 100.0 ROADS: The road network consists of more than 200,000 km of roads, of which appr oximately 93 422 km are paved. The connections between major urban centers are g ood and, overall, traffic density is low. In the next four years will be underta ken major infrastructure projects within the South African government's program of development of transport and communications. RAIL: The railway network has a length of 33 804 km, of which 18,241 km are paved. Currently there are 3009 brid ges, 188 tunnels and 625 stations. PORTS: South Africa, with 2954 km of coastline on the Atlantic Ocean to the west and east Indian Ocean, has seven international ports. The main ones are those o f Cape Town and Durban. Less important are Port Elizabeth and East London. AIRPO RTS: There are three main airports, Johannesburg, Durban and Cape Town, and a la rge number of small and medium provide a good network of connections. Include th ose of Bloemfontein, East London, Kimberley, Port Elizabeth and Upington. Domest ic flights are covered primarily by South African Airways. TELECOMMUNICATIONS: S outh Africa is the telecommunications leader on the African continent with appro ximately 5.3 million installed telephones and 4.03 million telephone lines. This represents 39% of total lines installed in Africa with about 100 lines per 1,00 0 inhabitants. The government plans to increase telephone density from 10% to 18 % for 2002, reaching 7 million telephone lines. PRICES: (Variation 2000 / 1999) INDUSTRIAL PRICES: CONSUMER PRICES: GOVERNMENT DEFICIT: (FY 2000-01) 9.2% 5.3% 2.4% GDP character i STICASDELOSPRINCI PA LES PRODUCTIVE SECTORS In the agricultural sector only 12% of the land is arable, although the country' s varied climate allows a wide diversity of crops, the main corn, vegetables, ci trus, potatoes, wheat, fruit and perishable subtropical fruit. Almost all produc tion comes from commercial farms owned by white farmers, along with co-existing in the former homelands many farms that practice subsistence agriculture. Livest ock is the dominant activity in many rural areas with major cattle herds and she ep (South Africa is the fourth largest producer and exporter of wool). Also impo rtant is the Ostrich. The mining sector has traditionally been the economic engi ne of the country, although in recent years has been declining relative importan ce, remains the backbone of its economy. In 2000 contributed to 54% of the value of South African exports. The main production in value terms is the gold of whi ch South Africa is the world's largest producer, followed by that of diamonds, c oal and platinum (also the first world producer of this metal). The South Africa n industry is the most advanced Sub-Saharan Africa and includes all industries t ypical of a developed economy. In 1999, the most important sub-sectors for their contribution to total industrial production were the chemical (15%), the food ( 13%), steel (12%), automotive (6.4%), textiles (6 %), beverages (4.5%) and elect ronic equipment (4.5%). However, with few exceptions, this is hardly a competiti ve industry that has developed under a high level of tariff protection. The cons truction sector, which employs more than 5% of the population, has a small numbe

r of large construction companies which, either individually or through joint ve ntures, dominate the market for large construction projects and public works cou ntries in the area.€The service sector has experienced significant development in recent years. The financial sector and banking in particular is one of the mo st sophisticated global. They also highlight tourism, with great development ove r the decade of the nineties, and transport and communications, as South Africa has an excellent local infrastructure and a good network of connections, both wi th the countries of the region and with major international markets. The main fe ature of the country's business structure is the concentration of economic power in a small number of large corporations with a great diversity of interests, wh ich has resulted in many oligopolistic situations. Although the current system h as been the free market, the public sector has played an important role in both the percentage of public expenditure on GDP and the weight of public enterprises as excessive regulation and regulation of the economy. It is carrying out a pri vatization process in which the policy is to sell part of the shares of public e nterprises to privatize one or more strategic partners, usually international co mpanies, and yet reserve some of the shareholders to the National Empowerment Fu nd created by the Government. BUSINESS AND BANKING SERVICES MARKETING One of the features of the South African economy is its dual, can be said that t here are actually two markets: a market of about 5 million whites with high purc hasing power (the average income of whites in South Africa is almost equal to th e middle-income Spanish and lets you enjoy one of the highest living standards i n the world), and a market of 30 million blacks with very limited purchasing pow er. Mestizos and Indians would be somewhere in between, with mestizos closer to blacks and Indians closer to whites in both consumption patterns and purchasing power. The vast majority of retail sales of consumer products is done in large m alls. These are grouped in small establishments, chain stores (Stuttafords, Edga rs, Woolworths), supermarkets (Checkers, Pick 'n Pay), and hypermarkets (Hyperam a, Makro), along with entertainment (restaurants, cinemas, bars and cafes ), thu s covering all consumer and leisure needs of the population. As for industrial p roducts, the market is characterized by a high degree of concentration, being co mmon to find areas where two or three large companies can gain control over 80% of the market, with the remaining 20% distributed among a large number of small distributors. Overall, the introduction of new products in the South African mar ket will require the appointment of a broker-dealer. Fragmented demand for produ cts would have to consider the appointment of several actors who would share the South African market by region, while for more concentrated demand products wou ld be desirable to find an agent covering not only South Africa but also the oth er countries of the region . In the case of those industrial products that requi re it, especially in the case of goods, it is essential that the chosen agent is able to provide the necessary technical assistance. BANKS The central bank of South Africa is the South African Reserve Bank. The South Af rican financial system is well developed and provides the services normally offe red in advanced financial markets. At present, South Africa has 32 commercial ba nks, seven of which are also merchant banks and five mutual banks, specialized i n residential sector. Besides private banks are public corporations that provide additional funding, the main: The Industrial Development Corporation (industria l projects), The Land Agricultural Bank (agricultural sector), The Development B ank of Southern Africa (development projects), and The Small Business Developmen t Corporation (SMEs). In the late eighties, there was a rationalization of the s ector and stage of mergers and acquisitions. As a result of this process, the fo ur largest banks, Stanbic, ABSA, First National Bank (FNB) and Nedcor, control 8 0% of the assets of commercial banks and major investment banks. There are ten f oreign banks installed in the country, among them ABN Amro Bank, Internationale Nederlanden, Citibank and Commerzbank. The Spanish element is present only the S

antander Group, with representative office. BALANCE OF PAYMENTS (Millions of U.S. dollars, 2000) Trade balance Exports (FOB) Imports (FOB) services and income transfers Current account long-term capital in the short term Capital Other Financial Account 4,275 31,667 -27,392 -3,785 -930 -441 314 -2,004 305 -1,384 EXTERNAL DEBT (Millions of U.S. dollars, 2000) Total external debt 36 903 External debt / GDP external debt service / exports goods and services * * 1999. 29.4% 11.2% MARKET OPENNESS AND ACCESSIBILITY MARKET OPENING DEGREE (Goods, 2000) EVOLUTION OF EXCHANGE RATES (Period average) 1997 1998 1999 2000 FOREIGN TRADE (IMPORT Export.ar +.) / GDP Imports / GDP 41.8% 21.2% TOTAL IMPORT / EXPORT GLOBAL TOTAL IMPORT / EXPORT WORLD 0.45% 0.47% South African Rands / DOLLAR USA * = 4.61 5.53 1.121 6.11 1.066 6.94 0.924 U.S. DOLLAR / ECU-EURO = 1.134 ** * A November 1, 2001, 1 U.S. dollar = 9.44 South African rand. ** ECU exchange r ates until December 1998 and the euro from 1999. A November 1, 2001, 1 euro = 0. 91 dollars. STRUCTURE OF FOREIGN TRADE MARKET ACCESS GEOGRAPHICAL DISTRIBUTION OF SOUTH AFRICAN TRADE (Percent structure, 1999) TRADE REGIME

EXPORTS IMPORTS REST OF WORLD 23.0% GERMANY NETHERLANDS UNITED KINGDOM 3.3% 6.6% 8.9% EU 43.4% 3 0.0% EU GERMANY 14.4% UNITED KINGDOM AUSTRALIA 2.1% 9.5% 2.7% CHINA IRAN SAUDI ARABIA 3.4% 4.1% 8.5% O THER EU EE. UU. 7.7% 13.6% JAPAN BELGIUM 2.8% 3.0% ITALY SPAIN FRANCE 1.4% 1.7% 2.3% OTHER EU EE. UU. 6.2% TAIWAN ISRAEL JAPAN KOREA AUSTRALIA ZIMBABWE ZAMBIA 4.1% 2.7% 1.9% SOUTH 1.5% 1.4% 1.2 % 2.4% 48.6% OTHER WORLD FRANCE ITALY 3.9% NETHERLANDS 3.7% 1.1% 2.3% SPAIN Basically, the trade regime is the freedom of trade. Although still requires imp ort license for certain agricultural products, the South African offer in the Ur uguay Round provides for the tariffication of the vast majority of them. The exp ort is also liberalized with the usual exceptions of some strategic materials an d weapons. Exchange control has been a constant in the South African economic hi story from the sixties, however this should not pose Spanish exporter major problems. The general rule is that payment of imports can not be made before the date of shipment. Are allowed, however, prepayments of u p to one third of the value at the factory in the case of capital goods. For its part, the South African exporters should charge sales within six months from th e date of shipment and declare and sell foreign exchange to an authorized bank w ithin seven days. In exceptional cases defer payment is authorized up to twelve months. SOUTH AFRICAN TRADE TARIFFS FOR GOODS Harmonized System tariff items (millions of rands, 2000) VALUE% CHANGE 00/99 HISPANO-AFRICAN BILATERAL TRADE Tariff chapters of the EU's Combined Nomenclature (thousands of euros, 2000) VALUE% CHANGE 00/99 IMPORTS (FOB) 27.9 Crude oils obtained from bituminous minerals Components origi nal equipment 98.01 87.03 Motor cars and other motor vehicles 85.25 transmitters for radio, telegraphy 84.71 Machines for data processing 85.17 Electrical appar atus for line telephony or line telegraphy Other aircraft 88.02 4.30 71.02 Drug Diamonds, whether unmounted worked 28.18 oxide and aluminum hydroxide, including artificial corundum Remaining Imports Exports (FOB) 71.08 Gold, including gold, platinum 71.02 Diamonds, whether or not worked, not mounted, solid fuel Hullas 27.01 from coal Ferro 72.02 27.10 Petroleum oils obtained from bituminous minera ls 87.03 Motor cars and other motor vehicles 84.21 76.01 Unwrought aluminum cent rifuges, devices for filtering liquids or gases 72.19 Flat-rolled products of st ainless steel 47.02 Chemical wood pulp dissolving Remaining exports 185,591 24,461 15,007 5,781 5,271 5,005 4,487 3,894 3,540 3,196 2,240 112,709 17 9,457 27,316 12,260 9,186 8,506 8,086 7,570 4,995 4,744 2,916 2,270 91,608 82.9 24.8 5.6 25.3 93.0 45.6 13.0 18.3 20.1 32.0-13.4 82.0 18.4 38.2 20.5 -0.1 1 61.7-28.8 173.1 - - -0.6 SPANISH EXPORTS (FOB) 87. Motor vehicles, tractors 84. Nuclear reactors, boilers , machinery 85. 40 Electrical machinery and apparatus. Rubber and articles there of 39. Plastics and articles thereof 69. 27 Ceramic products. Mineral fuels and oils 73. Articles of Iron or steel 99. Positions of regrouping 48. Paper and pap

erboard exports Remaining SPANISH IMPORTS (CIF) 27. 03 Mineral fuels and oils. F ish and crustaceans, molluscs 72. Foundry€Iron and steel 84. Nuclear reactors, boilers, machinery 26. Ores, slag and ash 48. Paper and cardboard 08. 25 edible fruit. Salt, sulfur, earths and stone 38. Miscellaneous chemical products 85. El ectrical machinery and equipment imports Remaining 311,820 77,443 37,996 36,033 14,951 14,149 11,430 9,760 8,712 8,368 7,593 85,385 753,580 325,852 91,696 68,179 48,982 41,602 29,766 23,515 22,729 15,307 14,771 71,181 14.9 30.8 16.0 7.3 65.4 102.0 23.5 16.7 25.8 -9.1 15.6 -4.6 17.1 31.4 14.9 15.4 -7.1 21.1 23.9 -19.0 17.6 5.2 50.4 -2.5 The South African tariff nomenclature follows the Harmonized Commodity Descripti on and Coding. South African trade policy has for decades been subject to ingrow th model based on import substitution. There has been a consistent tariff policy but continuous changes of specific duties. This led to a tariff characterized b y its enormous complexity, with a wide range of rights, a high level of media, a round 22% for industrial products, high volatility, and level of vesting too low ( 20% for industrial products). South Africa and the European Union recently si gned a Trade Agreement, which entered into force on January 1, 2000, by establis hing the progressive reduction of tariffs in both directions within a maximum pe riod of 12 years. The EU will liberalize 95% of its imports from South Africa an d South Africa, in turn, will liberalize 86% of its imports from the European Un ion. To access full information on the agreement and tariff reduction schedules by item, please consult the website of the European Commission (http://europa.eu .int/comm/development/index.htm). MEMBERSHIP ORGANIZATIONS COMMERCIAL AND ECONOMIC WORLD TRADE ORGANIZATION (WTO) World Bank (WB) International Monetary Fund (IMF) British Commonwealth (Commonwealth) ORGANIZATION OF AFRICAN UNITY (OAU) COMMUNI TY DEVELOPMENT FOR SOUTHERN AFRICA (SADC), African Development Bank (AfDB ) CUST OMS UNION OF SOUTH AFRICA (SACU) Common Monetary Area (CMA) NON-ALIGNED MOVEMENT LEGAL FRAMEWORK FISCAL SYSTEM The single rate of value added tax is 14%, being removed from it some basic food s. South African companies are subject to double taxation: 35% on profits and 12 .5% on dividends distributed. Subsidiaries of foreign companies registered in So uth Africa are subject to the same taxation that South African companies, while branches of foreign companies operating in the country are subject to a single r ate on profits of 40%. PRACTICAL INFORMATION CURRENCY The currency is the Rand (R), divided into 100 cents, and issued in denomination s of 10, 20, 50, 100 and 200 rands. LINKS FROM SPAIN AIRWAY: Iberia currently operates four times a week, the Madrid-Johannesburg-Madrid. LOCAL TIME There is no time difference from late March to late September, while the rest of the year South Africa is one hour ahead for Spain. By Sea: There is connection between the Spanish ports of Barcelona and Valencia and the South Africans in Cape Town and Durban, the latter being the most important in t he transport of goods.

STANDARDIZATION AND CERTIFICATION OF PRODUCTS The Standards Institute of South Africa (South African Bureau of Standards, SABS -) is the agency responsible for developing the activities of standardization an d certification. This works in close collaboration with other international bodi es such as ISO and IEC. At the same time it seeks to enhance the quality of dome stic products by licensing the use of the symbol SABS to ensure compliance with certain technical specifications and an adequate level of quality. It is highly recommended to contact the SABS to ensure the technical and quality requirements necessary for the marketing of products in South Africa. WORK SCHEDULE PUBLIC ADMINISTRATION MONDAY TO FRIDAY 8:00 to 15:30. USEFUL ADDRESSES IN SOUTH AFRICA EMBASSY OF SPAIN FACTORIES AND OFFICES MONDAY TO FRIDAY 8:30 to 17:00. USEFUL ADDRESSES IN SPAIN SOUTH AFRICA EMBASSY IN MADRID Claudio Coello, 91 28006 Madrid tel.: 91 436 3780 fax: 91 577 7414 SHOPPING CENTRES Monday to Saturday from 09:00 to 18:00. BANKS MONDAY TO FRIDAY 9:00 to 15:30, Saturdays from 8:30 to 11:00. Embassy in Pretoria (from July 1 to December 31) 169 0083 Pine Street Arcadia Pretoria tel.00 (27) 12-344 38 75 Fax: 00 (27) 12-343 48 91 Embassy in Cape Town (from January 1 to June 30) 37 Short Market Street Cape Town 8001 tel.: 00 (27) 21-422 23 26/27 Fax: 00 (27) 21-422 23 28 SECRETARY OF STATE FOR TRADE AND TOURISM. MINISTRY OF ECONOMY Paseo de la Castellana, 162 28046 Madrid tel.: 91 349 3500 fax: 91 349 5240 / 60 42 cc: @ sectyp.sscc.mcx.es buzon.oficial VACATIONS AND HOLIDAYS HOLIDAYS: The annual holiday period is between 15 and 20 days, which usually enjoy mid-Dec ember and mid January. PROTECTION OF PATENTS AND TRADEMARKS South Africa is part of the Paris Convention for the Protection of Industrial Pr operty and the Convention Establishing the World Intellectual Property Organizat ion (WIPO) and has signed the Law Treaty (TLT). National legislation on patents is based on the Patents Act 1978, which establishes an initial period of validit y of 16 years. The Trademarks Act No. 194 of 1993 provides a validity period of 10 years for a registered trademark. This period may be extended by successive r enewal for another 10 years. As for design protection, the Design Act 1993 allow s recording new or original design, which will be protected for an initial perio d of five years, extendable for another two periods of five years. ECONOMIC AND TRADE OFFICE OF THE EMBASSY OF SPAIN IN JOHANNESBURG Fedsure Towers, 8th floor Cor. Fredman & Bute Lane Drive P.O. Box 781 050 Sandto n 2146 Johannesburg Tel.: 00 (27) 11-883 21 02 / 03 Fax: 00 (27) 11-883 26 24 ce : buzon.oficial @ johannesburg. ofcomes.mcx.es

HOLIDAYS: January 1 New Year March 21, Human Rights Day, 28 April Freedom Day, May 1, Labo ur Day, May 10, Constitution Day, June 16, Day Youth, August 9, Women's Day, 24 September, Heritage Day, December 16, Reconciliation Day, December 25, Christmas , December 26, Day of Goodwill. They are also holidays Good Friday and Easter Mo nday. SPANISH INSTITUTE OF FOREIGN TRADE (ICEX) Paseo de la Castellana, 14-16 28046 Madrid tel.: 91 349 6100 fax: 91 431 6128 ww w.icex.es HEALTH PRECAUTIONS It takes just a preventive treatment against malaria if visiting the area northe ast of the country. Tap water is potable in all parts of the country. CONSULATE GENERAL OF SPAIN IN CAPE TOWN 37 Short Market Street Cape Town 8001 tel.: 00 (27) 21-422 24 15 Fax: 00 (27) 21 -422 23 28 ENTRY FORMALITIES Spanish citizens visiting South Africa for tourism or transit visa is not requir ed, only a valid passport. If you visit South Africa for work, need a visa and w ork permit. JOHANNESBURG CHAMBER OF COMMERCE & INDUSTRY JCC House Milpark - Johannesburg tel.: 00 (27) 11-726 53 00 Fax: 00 (27) 11-726 17 15, 482 20 00 POWER Voltage: 220 V, single phase. Frequency: 50Hz. SOURCES: Economic and Commercial Office Embassy of Spain in Johannesburg, Databa ses ICEX, Bank of Spain, South African Reserve Bank, South African Central Stati stical Service (CSS), Commissioner for Customs and Excise of the Republic of Sou th Africa, The Economist Intelligence Unit, UN, WIPO, IMF. OCTOBER, 2001 Legal Deposit: M-NIPO 00000-2001: 381-01-016-6 ISBN: 84-7811-415-7