Bond Southern Africa 4.85% ( US836205BA15 ) in USD

Southern Africa

99.46 % ▲

South Africa

US836205BA15 ( in USD )

4.85% per year ( payment 2 times a year)

29/09/2029

Prospectus brochure of the bond South Africa US836205BA15 en USD 4.85%, maturity 29/09/2029

836205BA1

30/03/2026 ( In 104 days )

South Africa is a diverse country located at the southern tip of Africa, renowned for its stunning landscapes, rich biodiversity, vibrant culture, and complex history encompassing colonialism, apartheid, and a subsequent transition to democracy.

The Bond issued by Southern Africa ( South Africa ) , in USD, with the ISIN code US836205BA15, pays a coupon of 4.85% per year.
The coupons are paid 2 times per year and the Bond maturity is 29/09/2029

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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-216978
PROSPECTUS SUPPLEMENT
(to Prospectus dated March 28, 2017)
REPUBLIC OF SOUTH AFRICA
U.S.$2,000,000,000 4.850% Notes due 2029
U.S.$3,000,000,000 5.750% Notes due 2049
The U.S.$2,000,000,000 4.850% Notes due September 30, 2029 (the "2029 Notes") bear interest at the rate of 4.850% per year, accruing from
September 30, 2019 and the U.S.$3,000,000,000 5.750% Notes due September 30, 2049 (the "2049 Notes" and, together with the 2029 Notes, the
"Notes") bear interest at the rate of 5.750% per year, accruing from September 30, 2019. Interest on the Notes is payable on March 30 and September 30
of each year, commencing March 30, 2020. The 2029 Notes mature on September 30, 2029 and the 2049 Notes mature on September 30, 2049. The
Notes are not redeemable prior to maturity.
Application will be made to the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg, as competent authority
under Regulation (EU) 2017/1129 (the "Prospectus Regulation") and the Luxembourg law of July 16, 2019 on prospectuses for securities, as amended,
to approve this prospectus supplement (the "Prospectus Supplement"), together with the accompanying prospectus dated March 28, 2017 (the
"Prospectus"), as a prospectus for the purposes of the Prospectus Regulation.
Currently there is no public market for the Notes. Application will be made to admit the Notes to listing on the Official List of the Luxembourg
Stock Exchange and to have the Notes traded on the regulated market "Marché réglementé" of the Luxembourg Stock Exchange, Bourse de
Luxembourg (which is a regulated market for the purpose of the Markets in Financial Instruments Directive 2014/65/EU, amending Directive
2002/92/EC and Directive 2011/61/EU). There can be no assurance that such application will be accepted or that the Notes will be admitted.
The Notes will contain provisions regarding ranking and future modifications to their terms that differ from those applicable to South Africa's
outstanding external debt issued prior to April 6, 2016. The Notes will be designated Aggregated Collective Action Securities and, as such, will contain
provisions regarding future modifications, which are described beginning on page 16 of the accompanying Prospectus, under which South Africa may
amend the payment provisions of any series of debt securities (including the Notes) and other reserved matters listed in the fiscal agency agreement
with the consent of the holders of: (1) with respect to a single series of debt securities, more than 75% of the aggregate principal amount of the
outstanding debt securities of such series; (2) with respect to two or more series of debt securities, if certain "uniformly applicable" requirements are
met, more than 75% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the
aggregate; or (3) with respect to two or more series of debt securities, more than 662/3% of the aggregate principal amount of the outstanding debt
securities of all series affected by the proposed modification, taken in the aggregate, and more than 50% of the aggregate principal amount of the
outstanding debt securities of each series affected by the proposed modification, taken individually.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED
OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
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OFFENSE.
A decision to participate or not participate in the offering will involve certain risks. It is important that you read "Risk Factors"
beginning on page S-15 of this Prospectus Supplement and the risks discussed elsewhere in this Prospectus Supplement, the accompanying
Prospectus and the documents we file with the Securities and Exchange Commission (the "SEC").

2029 Notes

2049 Notes

Per Note

Total

Per Note

Total

Public Offering Price(1)
100.000%U.S.$
2,000,000,000 100.000%U.S.$
3,000,000,000
Underwriting Discount

0.125%U.S.$
2,500,000
0.125%U.S.$
3,750,000
Proceeds, before expenses, to South Africa 99.875%U.S.$
1,997,500,000 99.875%U.S.$
2,996,250,000
(1)
Plus accrued interest from September 30, 2019, if settlement occurs after that date.
The Underwriters expect to deliver the Notes in book-entry form only through the facilities of The Depository Trust Company ("DTC"), for the
accounts of its participants, including Clearstream Banking, société anonyme, and Euroclear Bank S.A./N.V., as operator of the Euroclear System,
against payment on or about September 30, 2019.
Joint Book-Running Managers
Citigroup
Deutsche Bank / Nedbank

Rand Merchant Bank

Standard Bank
The date of this Prospectus Supplement is September 23, 2019.
Table of Contents
TABLE OF CONTENTS

Page

Prospectus Supplement

Introduction
S-1
Forward-Looking Statements
S-5
Overview of the Issuer
S-6
The Offering
S-11
Risk Factors
S-15
Use of Proceeds
S-21
Description of the Notes
S-22
Global Clearance and Settlement
S-27
Taxation
S-31
Underwriting
S-34
Jurisdictional Restrictions
S-36
Legal Matters
S-42
General Information
S-43
Documents Incorporated by Reference
S-45

Base Prospectus

About this Prospectus

2
Forward-Looking Statements

3
Incorporation of Certain Documents by Reference

4
Use of Proceeds

5
Description of Debt Securities

6
Description of Warrants

22
Plan of Distribution

24
Official Statements

25
Validity of the Securities

26
Authorized Representative

27
Further Information

28
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S-i
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INTRODUCTION
This Prospectus Supplement supplements the accompanying Prospectus relating to the debt securities and warrants of the Government of the
Republic of South Africa (the "National Government," the "South African Government," the "Republic" or "South Africa," unless references to the
"Republic" or "South Africa," within any particular context, clearly indicate a reference to the sovereign state of the Republic of South Africa). You
should read this Prospectus Supplement along with the accompanying Prospectus, which together constitute a prospectus within the meaning of the
Prospectus Regulation. Both documents contain information you should consider when making your investment decision. Certain other documents are
incorporated by reference into this Prospectus Supplement and the accompanying Prospectus. Please see "Documents Incorporated by Reference" in this
Prospectus Supplement and "Incorporation of Certain Documents by Reference" in the accompanying Prospectus. In case of an inconsistency between
information provided in this Prospectus Supplement and the accompanying Prospectus, the statements in this Prospectus Supplement will prevail.
No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this
Prospectus Supplement and the accompanying Prospectus and, if given or made, such information or representations must not be relied upon as having
been authorized by the Republic, Citigroup Global Markets Inc., Deutsche Bank AG, London Branch, Nedbank Limited, Rand Merchant Bank, a
division of FirstRand Bank Limited (London Branch), or The Standard Bank of South Africa Limited (the "Underwriters"). This Prospectus
Supplement and the accompanying Prospectus do not constitute an offer to buy or a solicitation of an offer to sell any securities in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this Prospectus Supplement and the
accompanying Prospectus nor any exchange, purchase or sale made hereunder shall, under any circumstances, create any implication that the
information in this Prospectus Supplement and the accompanying Prospectus is correct as of any time subsequent to the date hereof or that there has
been no change in the affairs of the Republic since such date.
The Republic accepts responsibility for the information it has provided in this Prospectus Supplement and the accompanying Prospectus and, after
having taken all reasonable care and to the best of its knowledge, confirms that:
·
the information contained in this Prospectus Supplement and the accompanying Prospectus is true and correct in all material respects and
is not misleading; and
·
it has not omitted other facts the omission of which makes this Prospectus Supplement and the accompanying Prospectus as a whole
misleading.
To the best of the Republic's knowledge, as at the date of this Prospectus Supplement the information contained in this Prospectus Supplement and
the accompanying Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Notes are debt securities of the Republic, which are being offered under the Republic's registration statement no. 333-216978 filed with the
SEC under the U.S. Securities Act of 1933, as amended (the "Securities Act"). This Prospectus Supplement and the accompanying Prospectus are part
of the registration statement. The accompanying Prospectus provides you with a general description of the securities that the Republic may offer, and
this Prospectus Supplement contains specific information about the terms of the Notes. This Prospectus Supplement also adds, updates or changes
information provided or incorporated by reference in the accompanying Prospectus. Consequently, before you decide to participate in the offering, you
should read this Prospectus Supplement together with the accompanying Prospectus as well as the documents incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus.
S-1
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None of this Prospectus Supplement, the accompanying Prospectus nor any document incorporated by reference are intended to provide the basis of
any credit or other evaluation and should not be considered as a recommendation by any of South Africa or the Underwriters that any recipient of this
Prospectus Supplement, the accompanying Prospectus or any document incorporated by reference should purchase Notes.
You must comply with all laws that apply to you in any place in which you possess this Prospectus Supplement and the accompanying Prospectus.
You must also obtain any consents or approvals that you need in order to purchase Notes. Neither the Republic nor the Underwriters is responsible for
your compliance with these legal requirements. It is important that you read "Jurisdictional Restrictions" beginning on page S-36 of this Prospectus
Supplement.
The Republic has prepared the offering and is solely responsible for its contents. You are responsible for making your own examination of the
Republic and for making your own assessment as to the suitability of investing in the Notes. By purchasing Notes, you will be deemed to have
acknowledged that:
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·
you have reviewed the offering;
·
you have had an opportunity to request and review any additional information that you may need; and
·
the Underwriters are not responsible for, and are not making any representation to you concerning, the accuracy or completeness of the
offering.
The Republic and the Underwriters are not providing you with any legal, business, tax or other advice in the offering. You should consult with your
own advisers as needed to assist you in making your investment decision and to advise you whether you are legally permitted to purchase Notes.
As used in this Prospectus Supplement, "business day" means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close in New York City or London.
In this Prospectus Supplement, all amounts are expressed in South African Rand ("R," "Rand" or "rand") or U.S. dollars ("U.S.$," "$" or "dollars"),
except as otherwise specified.
The Republic's fiscal year begins on April 1 and ends on March 31. Economic data presented in this Prospectus Supplement is presented on a
calendar year basis unless reference is made to the relevant fiscal year or the fiscal year is otherwise indicated by the context.
Unless otherwise indicated, references to gross domestic product ("GDP") are to real GDP, calculated using constant prices in order to adjust for
inflation (with 2010 as a base year), and percentage changes in GDP refer to changes as compared to the previous year or the same quarter of the
previous year, unless otherwise indicated.
This Prospectus Supplement, the accompanying Prospectus and the documents incorporated by reference herein contain figures that have been
subject to seasonal adjustment and/or annualisation. Seasonal adjustment is a method to account for and eliminate the estimated effects of normal
seasonal variation from a series of data, so that the effects of other influences on the series can be more clearly recognised and defined. Depending on
the nature of the seasonal pattern, seasonal adjustment is accomplished either by the multiplicative method (i.e., each value of a time series is adjusted
by dividing by a seasonal index that represents the percentage of the normal value typically observed in that season) or the additive method (i.e., each
value of a time series is adjusted by adding or subtracting a quantity that represents the absolute amount by which the value in that season of the year
tends to be below or above normal, as estimated from past data). The aim of annualisation is to reflect what the real growth rate would be if the
prevailing growth rate were to be sustained for a year. Annualised information is calculated as the quarterly data multiplied by four, while the annualised
growth rates are derived by raising the
S-2
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change in a given quarter from the previous quarter to the power of four. Seasonally adjusted and annualised information is presented for comparative
purposes only and is not necessarily indicative of actual performance. Accordingly, South Africa cautions you not to place undue reliance on seasonally
adjusted or annualised information because actual performance may differ materially from such information.
The South African Government is a foreign sovereign government. Consequently, it may be difficult for investors to obtain or realize upon
judgments of courts in the United States against the South African Government. The South African Government will irrevocably submit to the
jurisdiction of the Federal and State courts in The City of New York, and will irrevocably waive any immunity from the jurisdiction (including
sovereign immunity but not any immunity from execution or attachment or process in the nature thereof) of such courts and any objection to venue, in
connection with any action arising out of or based upon the Notes brought by any holder of Notes. The South African Government reserves the right to
plead sovereign immunity under the U.S. Foreign Sovereign Immunities Act of 1976 (the "Immunities Act") with respect to actions brought against it
under United States federal securities laws or any state securities laws. In the absence of a waiver of immunity by the South African Government with
respect to such actions, it would not be possible to obtain a U.S. judgment in such an action against the South African Government unless a court were
to determine that the South African Government is not entitled under the Immunities Act to sovereign immunity with respect to such action.
Enforceability in South Africa of final judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of the United States
federal securities laws is subject, among other things, to the absence of a conflicting judgment by a South African court or of an action pending in South
Africa among the same parties and arising from the same facts and circumstances and to the South African courts' determination that the U.S. courts had
jurisdiction, that process was appropriately served on the defendant and that enforcement would not violate South African public policy. In general, the
enforceability in South Africa of final judgments of U.S. courts obtained other than by default would not require retrial in South Africa. In original
actions brought before South African courts, there is uncertainty as to the enforceability of liabilities based on United States federal securities laws. The
South African courts may enter and enforce judgments in foreign currencies. See "Description of Debt Securities--Governing Law; Consent to Service"
in the accompanying Prospectus.
In connection with the issue of the Notes, the Underwriters or any person acting for the Underwriters may over-allot or (provided that the aggregate
principal amount of Notes allotted does not exceed 105% of the aggregate principal amount of the Notes) effect transactions with a view to supporting
the market price of the Notes at a level higher than that which might otherwise prevail. However, stabilization may not necessarily occur. Any
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stabilizing action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may
cease at any time, but it must end at no later than the earlier of 30 days after the issue of the Notes and 60 days after the date of allotment of the Notes.
This Prospectus Supplement and the accompanying Prospectus have been sent to you in an electronic form. You are reminded that documents
transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither the Republic nor the
Underwriters or any person who controls an Underwriter or any director, officer, employee or agent of the Underwriters or any affiliate (as defined in
Rule 405 under the Securities Act, an "affiliate") of such person will accept any liability or responsibility whatsoever in respect of any difference
between this Prospectus Supplement and the accompanying Prospectus distributed to you in electronic format and this Prospectus Supplement and the
accompanying Prospectus in their original form.
The distribution of this Prospectus Supplement and the accompanying Prospectus and the offering of the Notes in certain jurisdictions is
restricted by law. Persons who acquire this Prospectus Supplement and the accompanying Prospectus are required by the Republic and the
Underwriters to inform themselves about, and to observe, any such restrictions. See "Jurisdictional Restrictions" in this Prospectus
Supplement.
S-3
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PROHIBITION OF SALES TO EEA RETAIL INVESTORS--The Notes are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a "retail
investor" means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended,
"MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97, the "Insurance Distribution Directive") where that customer would not
qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus
Regulation. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering
or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or
otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
MIFID II product governance / Professional investors and ECPs only target market --Solely for the purposes of each manufacturer's product
approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible
counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Notes to eligible counterparties and
professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into
consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target
market assessment in respect of the Notes (by either adopting or refining the manufacturers' target market assessment) and determining appropriate
distribution channels.
We expect that delivery of the Notes will be made on the date specified on the cover page of this Prospectus Supplement, which will be the
fifth business day following the date of this Prospectus Supplement. Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade
expressly agree otherwise. Accordingly, the purchasers who wish to trade the Notes on the date of this Prospectus Supplement or the next three
succeeding business days will be required to specify an alternate settlement cycle at the time of any such trade to prevent failed settlement.
Purchasers of the Notes who wish to trade the Notes on the date of this Prospectus Supplement or the next three succeeding business days
should consult their own adviser.
S-4
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FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the accompanying Prospectus contain certain forward-looking statements within the meaning of Section 27A of
the Securities Act. Statements that are not historical facts, including statements with respect to certain of the current expectations, plans and objectives
of South Africa and the economic, monetary and financial conditions of the Republic, are forward-looking in nature. These statements may be made
expressly in this Prospectus Supplement or may be in other documents. South Africa refers you to or has filed with the SEC. You can find many of
these statements by looking for words such as "believes," "expects," "anticipates," "estimates," or similar expressions used in this Prospectus
Supplement or documents to which South Africa refers you.
These forward-looking statements are subject to numerous assumptions, risks, and uncertainties that may cause South Africa's actual results to be
materially different from any future results expressed or implied by the Republic in those statements. The risks and uncertainties include those risks,
uncertainties, and risk factors identified, among other places, under "Risk Factors" below and the risks discussed elsewhere in this Prospectus
Supplement, the accompanying Prospectus and the documents we file with the SEC. Such factors include, but are not limited to:
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·
external factors, such as interest rates in financial markets outside South Africa and social and economic conditions in South Africa's
neighbors and major export markets; and
·
internal factors, such as general economic and business conditions in South Africa, present and future exchange rates of the Rand,
foreign currency reserves, the ability of the South African Government to enact key reforms, the level of domestic debt, domestic
inflation, the level of foreign direct and portfolio investment and the level of South African domestic interest rates.
Because these statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-
looking statements. South Africa cautions you not to place undue reliance on those statements, which speak only as of the date of this Prospectus
Supplement or, in the case of documents South Africa refers you to or incorporates by reference, the date of such documents.
The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-
looking statements that the Republic or persons acting on its behalf may issue. South Africa does not undertake any obligation to review or confirm
analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date
of this Prospectus Supplement or to reflect the occurrence of unanticipated events.
S-5
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OVERVIEW OF THE ISSUER
This Prospectus Supplement and the accompanying Prospectus contain information that should be read carefully before any decision is made with
respect to the offering. Any decision to invest in the Notes by an investor should be based on consideration of this Prospectus Supplement and the
accompanying Prospectus as a whole. You should read this entire Prospectus Supplement and the accompanying Prospectus carefully. The following
overview is qualified in its entirety by reference to, and should be read in connection with, the information appearing elsewhere or incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus. Each of the capitalized terms used in this overview and not defined herein
has the meaning set forth elsewhere in this Prospectus Supplement.
This section provides information that supplements the information about South Africa that is included in South Africa's Annual Report on
Form 18-K, which was filed with the SEC on February 15, 2019 (as amended, the "Annual Report"). To the extent that the information in this section
differs from the information contained in South Africa's Annual Report, you should rely on the information in this section.
On February 20, 2019, the National Treasury released the Budget Review 2019 (the "2019 Budget Review"), and on June 27, 2019, the South
African Reserve Bank released its June 2019 Quarterly Bulletin (the "June Quarterly Bulletin"). South Africa filed the 2019 Budget Review and the
June Quarterly Bulletin with the SEC on September 23, 2019 under cover of Form 18-K/A ("Amendment No. 1"), which is incorporated by reference
into this Prospectus Supplement and the accompanying Prospectus. You should read the 2019 Budget Review and the June Quarterly Bulletin together
with the additional information therein in conjunction with the other information appearing elsewhere in this Prospectus Supplement and the
accompanying Prospectus.
The Issuer
South Africa has been an established constitutional democracy since 1994, when it held its first fully democratic national elections. South Africa
has one of the most developed economies in Sub-Saharan Africa and accounted for almost 22% of the aggregate GDP of Sub-Saharan Africa during
2018 (source: IMF, World Economic Outlook Database, April 2019). The South African economy is diverse and supported by a well-developed legal
system and a sophisticated financial system. The National Government's central economic policy goal is to accelerate inclusive growth and create jobs.
Its main fiscal objective is to ensure sustainable finances by containing the budget deficit and stabilising public debt.
However, South Africa continues to confront a challenging domestic and international economic environment in which global growth is slowing
and trade tensions are mounting. Following the financial crisis, which induced a 1.5% contraction in real GDP growth in 2009, real GDP growth
rebounded to rates above 3% in 2010 and 2011. Growth subsequently declined to 1.8% in 2014, 1.3% in 2015, 0.6% in 2016 and 1.3% in 2017 as a
result of lower commodity prices, higher borrowing costs, diminished business and consumer confidence, and drought. The economy fell into technical
recession in the first half of 2018, as a result of production losses in the agriculture and mining sectors, while investment growth remained subdued and
imports accelerated. Growth rebounded in the second half of 2018, primarily driven by a recovery in the manufacturing, transport, finance and business
services sectors, which resulting in real GDP growth of 0.8% in 2018. However, real GDP contracted at an annualised rate of 3.2% in the first quarter
of 2019, which is the largest contraction since the first quarter of 2009, although this was offset in part by real GDP growth of 3.1% in the second
quarter of 2019. The decrease was exacerbated by severe electricity-supply disruptions and was broad-based, with real output shrinking in the primary,
secondary and tertiary sectors, and in seven of ten subsectors.
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The real gross value added by the primary sector contracted for a fifth successive quarter in the first quarter of 2019, as real output receded sharply
in both the agricultural and mining sectors. A further decline in the wine grape harvest, the postponement of the citrus fruit harvest to the second quarter
of 2019 and a reduced domestic maize harvest all contributed to the lower agricultural output. The decrease in the real output of the mining sector was
fairly broad-based among the different mineral groups and was
S-6
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exacerbated electricity-supply disruptions, planned maintenance and stocktaking at platinum mines, and strike action. The real output of the secondary
sector also contracted sharply in the first quarter of 2019, aggravated by the electricity-supply disruptions. The real gross value added by the
manufacturing as well as the electricity, gas and water supply sectors contracted compared to prior periods, while construction activity decreased further
in the first quarter of 2019. The real gross value added by the tertiary sector contracted in the first quarter of 2019. The decrease in the real output of the
commerce as well as the transport, storage and communication sectors reflected generally weak consumer demand and lower export and import
volumes. The real gross valued added by the finance sector grew at a slower pace, while gross value added by the general government services sector
increased in the first quarter of 2019, following a marginal decrease in the fourth quarter of 2018.
Private-sector employment growth has been slowing since 2011 as job creation remains stagnant. The unemployment rate declined marginally from
an average of 27.5 per cent in 2017 to 27.1 per cent in 2018, although this decrease is due in part to an increase in the number of discouraged work
seekers, who are not counted in the unemployment rate. Employment increased in the second quarter of 2019 for the first time in a second quarter since
2015, after experiencing declines in the past consecutive second quarters of 2016, 2017 and 2018. According to the Quarterly Labour Force Survey
conducted by Statistics South Africa ("Stats SA"), the number of people employed in South Africa increased by 21,000 from the first to the second
quarter of 2019, increasing total employment to approximately 16.3 million, although the number of unemployed persons increased by 455,000 to
6.7 million during that same period. Accordingly, the absorption rate decreased by 0.2% to 42.4% in the second quarter of 2019, while the
unemployment rate increased by 1.4 percentage points to 29.0% in the same period.
Domestic inflationary pressures increased gradually in the first five months of 2019 as a result of higher international crude oil prices and the
depreciation in the exchange value of the Rand. Most measures of producer price inflation increased in 2019, largely reflecting higher energy and food
prices. Headline consumer price inflation also increased, from a low of 4.0% in January 2019 to 4.5% in May, but remained within the inflation target
range set by the South African Reserve Bank ("SARB") in April 2017 for the last 26 consecutive months. Core inflation remained unchanged at 4.4% in
the five months to March 2019 before decreasing to 4.1% in both April and May, reflecting an environment of weak domestic demand with cost
increases fully passed on to consumers.
Recent Developments
The National Treasury's Economic Policy paper, "Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy
for South Africa," published on 27 August 2019 and which is currently available for public comment, is intended to facilitate a public debate on the
types of economic and policy reforms that can and should be undertaken by the National Government. The paper draws on the National Government's
National Development Plan to outline six themes and the contribution of growth reforms within each theme that prioritize economic transformation,
inclusive growth and competitiveness. The themes include:
·
Modernizing network industries to promote competitiveness and inclusive growth;
·
Lowering barriers to entry and addressing distorted patterns of ownership through increased competition and small business growth;
·
Prioritizing labour-intensive growth: agriculture and services;
·
Implementing focused and flexible industrial and trade policy to promote competitiveness and facilitate long-run growth;
·
Promoting export competitiveness and harnessing regional growth opportunities; and
·
Quantifying the impact of proposed growth reforms.
S-7
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The 2019 Medium-Term Budget Policy Statement is expected to be released in October 2019 and will provide an updated review of the National
Government's economic and fiscal performance, in particular, as a result of slower than anticipated GDP growth in the first half of 2019. While overall
GDP growth is expected to be positive, certain downside risks highlighted in the 2019 Budget Review have materialised, which is expected to result in
a downward adjustment on full year real GDP growth, notwithstanding real GDP growth of 3.1% in the second quarter of 2019.
The National Government has announced that it has appropriated R59 billion out of the National Revenue Fund to assist Eskom with its financial
obligations. This appropriation is in addition to the R69 billion allocated in the 2019 Budget Review and consists of R26 billion for the 2019/20
financial year and R33 billion for the 2020/2021 financial year. In addition, following the appointment of Freeman Nomvalo as chief restructuring
officer (the "Eskom CRO") for Eskom in July 2019, the Eskom CRO is expected to publish a proposal setting forth the next steps in the restructuring of
Eskom. Any proposal will be subject to review by the relevant stakeholders, including the National Government. Eskom is expected to appoint a
permanent CEO in the short term.
The National Government has announced that it has revised its contingency reserve upwards to R13 billion for 2019/2020, R6 billion for
2020/2021 and R6 billion for 2021/2022 to respond to possible requests for financial support.
Recent Economic Data
The following table sets forth growth in real gross value added by sector for the periods indicated.
Percentage Growth in Real Gross Value Added by Sector

(at constant 2010 prices)

For the year ended
For the year ended

December 31, 2017

December 31, 2018

Contribution
Contribution
to GDP
Share in
to GDP
Share in

Growth

Growth

GDP
Growth

Growth

GDP

Agriculture, forestry and fishing

17.7
0.4
2.6
4.8
0.1
2.6
Mining and quarrying

4.6
0.3
8.2
1.7
0.1
8.1
Manufacturing

0.2
--
13.5
1.0
0.1
13.5
Electricity, gas and water

0.2
--
2.3
0.9
0.0
2.3
Construction

0.3
--
3.8
1.2
0.0
3.8
Wholesale and retail trade, catering and
accommodation

0.6
0.1
15.0
0.6
0.1
15.1
Transport, storage and communication

1.5
0.1
9.4
1.6
0.1
9.6
Finance, insurance, real estate and business
services

1.9
0.4
22.3
1.8
0.4
22.4
General government services

0.3
0.1
16.8
1.3
0.2
16.7
Personal services

1.2
0.1
5.9
1.0
0.1
6.0
Sources: South African National Treasury and Stats SA.
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Table of Contents
The following table summarizes the National Government debt as of the dates indicated in each of the years ended March 31, 2015 through 2019.

As of March 31,

2015

2016

2017

2018

2019

Rand (million) except percentages

Government bonds
1,399,282 1,572,574 1,727,085 1,949,577 2,160,399
Treasury bills

202,217
209,468
250,468
293,321
307,360
Marketable internal debt
1,601,499 1,782,042 1,977,553 2,242,898
2,467759
Non-marketable internal debt

30,586
37,322
38,171
29,013
29,277
Total internal debt
1,632,085 1,819,364 2,015,724 2,271,911 2,496,986
Total external debt(1)

166,830
199,607
221,934
217,811
291,314
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Total gross loan debt
1,798,915 2,018,971 2,237,658 2,489,722 2,788,300
Cash balances(2)
(214,709) (214,333) (231,411) (205,196)
(243,117)
Total net loan debt(3)
1,584,207 1,804,638 2,006,247 2,284,526 2,545,183
GFECRA(4)
(203,396) (304,653)
241,514
--
(285,829)
As percentages of nominal GDP:

Net loan debt

41.0%
44.2%
45.5%
48.6%
50.65%
External debt

4.3%
4.9%
5.0%
4.6%
5.80%
As percentage of gross loan debt:

External debt

9.3%
9.9%
9.9%
8.7%
10.45%
Notes:
(1)
Valued using the applicable foreign exchange rates as at the end of each period.
(2)
This represents surplus cash of the National Revenue Fund on deposit at the commercial banks and the SARB. Bank balances in
foreign currencies are revaluated using the applicable exchange rates as at the end of each period.
(3)
The total net loan debt is calculated with due account of the bank balances of the National Revenue Fund (balances of the
National Government's accounts with the SARB and with commercial banks).
(4)
Represents the balance on the GFECRA. A negative balance indicates a profit and a positive balance reflects a loss.
Sources: South African National Treasury and SARB.
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Table of Contents
The following table sets forth, for the periods indicated, the Current Account as a percentage of nominal GDP.

As of December 31,

Percentage of GDP

2014

2015

2016

2017

2018

Total current account (saar values)
5.1 4.6 2.9 2.5 3.5
Trade balance
1.4 1.2
0.7
1.4
0.5
Net services, income and current transfer payments
3.6 3.5 3.6 3.9 4.0
Net service payments
0.1 0.1 0.2 0.1 0.2
Net income payments
2.7 2.5 2.8 3.0 3.2
Net dividend payments
1.4 1.2 1.3 1.3 1.4
Net current transfer payments (mainly SACU(1))
0.9 0.8 0.6 0.8 0.7
Current account excluding SACU current transfers(2)
3.8 3.4 1.9 1.4 2.5
Notes:
(1)
SACU refers to the Southern African Customs Union
(2)
Excluding net transfer payments.
Source: South African Reserve Bank.
The following table sets forth, for the periods indicated, the exchange rate of the Rand per U.S. Dollar.
Rand

(against the U.S. Dollar)

Year

Low

High

Average

Period End

2009

7.2439 10.5948
8.4372
7.3721
2010

6.6224
7.9704
7.3222
6.6224
2011

6.5962
8.5423
7.2531
8.1319
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2012

7.4777
8.9432
8.2099
8.4838
2013

8.4478 10.4849
9.6502
10.4675
2014
10.2815 11.7415 10.8444
11.5719
2015
11.2955 15.5742 12.7507
15.5742
2016
13.2747 16.8927 14.7088
13.6282
2017
12.2566 14.4606 13.3129
12.2940
2018
11.5600 15.5480 13.2339
14.4506
January 2019
13.3249 14.4870 13.8615
13.3249
February 2019
13.2966 14.1863 13.7956
13.9532
March 2019
14.1054 14.6804 14.3831
14.5968
April 2019
13.9210 14.4946 14.1544
14.3319
May 2019
14.2010 14.8641 14.4370
14.7581
June 2019
14.1487 15.1165 14.5665
14.1487
July 2019
13.8574 14.2762 14.0466
14.1784
August 2019
14.4699 15.4120 15.1423
15.2324
September 2019 (through September 16, 2019)
14.5560 15.2256 14.8072
14.6588
Source: South African Reserve Bank.
On September 16, 2019, the exchange rate was R14.6588 per U.S. dollar.
S-10
Table of Contents
THE OFFERING
Issuer:

Republic of South Africa.

Securities Offered:
U.S.$2,000,000,000 4.850% Notes due 2029.
U.S.$3,000,000,000 5.750% Notes due 2049.

Maturity Date:
The 2029 Notes will mature on September 30, 2029.
The 2049 Notes will mature on September 30, 2049.

Aggregate Principal Amount:
U.S.$2,000,000,000 for the 2029 Notes.
U.S.$3,000,000,000 for the 2049 Notes.

Issue Price:
100.000% of the principal amount of the 2029 Notes, plus accrued interest, if
any, from September 30, 2019.
100.000% of the principal amount of the 2049 Notes, plus accrued interest, if
any, from September 30, 2019.

Issue Date:
September 30, 2019.

Interest Rate:
4.850% per annum for the 2029 Notes.
5.750% per annum for the 2049 Notes.

Current Yield:
4.850% as at the Issue Date for the 2029 Notes.
5.750% as at the Issue Date for the 2049 Notes.

Interest Calculations:
Interest payable on a particular interest payment date will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.

Interest Payment Dates:
March 30 and September 30 of each year, commencing March 30, 2020.

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Document Outline

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