Bond South Africa 6.3% ( US836205AZ74 ) in USD

South Africa

81.86 % ▲

South Africa

US836205AZ74 ( in USD )

6.3% per year ( payment 2 times a year)

21/06/2048

Prospectus brochure of the bond South Africa US836205AZ74 en USD 6.3%, maturity 21/06/2048

836205AZ7

22/06/2025 ( In 63 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 South Africa ( South Africa ) , in USD, with the ISIN code US836205AZ74, pays a coupon of 6.3% per year.
The coupons are paid 2 times per year and the Bond maturity is 21/06/2048

424B5 1 a2235753z424b5.htm 424B5
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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.$1,400,000,000 5.875% Notes due 2030
U.S.$600,000,000 6.300% Notes due 2048
The U.S.$1,400,000,000 5.875% Notes due June 22, 2030 (the "2030 Notes") bear interest at the rate of 5.875% per year, accruing from May 22,
2018 and the U.S.$600,000,000 6.300% Notes due June 22, 2048 (the "2048 Notes" and, together with the 2030 Notes, the "Notes") bear interest at the
rate of 6.300% per year, accruing from May 22, 2018. Interest on the Notes is payable on June 22 and December 22 of each year, commencing
December 22, 2018. There will be a long first coupon from (and including) May 22, 2018 to (but excluding) December 22, 2018. The 2030 Notes
mature on June 22, 2030 and the 2048 Notes mature on June 22, 2048. The Notes are not redeemable prior to maturity.
Application has been made to the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg (the "CSSF"), as
competent authority under Directive 2003/71/EC, as amended (the "Prospectus Directive") and the Luxembourg Act dated July 10, 2005 on
prospectuses for securities, as amended (the "Prospectus Act 2005"), 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 Directive. By approving
this Prospectus Supplement and the accompanying Prospectus, the CSSF gives no undertaking as to the economic and financial soundness of the
transaction or the quality or solvency of the Republic of South Africa in accordance with article 7(7) of the Prospectus Act 2005.
Currently there is no public market for the Notes. Application has been made to admit the Notes to listing on the Official List of the Luxembourg
Stock Exchange and to trading 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).
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.
Upon listing and admission to trading of the Notes offered hereunder on the Luxembourg Stock Exchange, copies of this Prospectus Supplement
and the accompanying Prospectus, as well as the documents incorporated by reference herein, may be obtained from the Luxembourg Stock Exchange
website at http://www.bourse.lu.
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
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SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
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").

2030 Notes

2048 Notes

Per Note

Total

Per Note

Total
Public Offering Price(1)
99.992%
U.S.$1,399,888,000 99.991%
U.S.$599,946,000
Underwriting Discount

0.125%
U.S.$1,750,000

0.125%
U.S.$750,000
Proceeds, before expenses, to South Africa
99.867%
U.S.$1,398,138,000 99.866%
U.S.$599,196,000
(1)
Plus accrued interest from May 22, 2018, 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") on
May 22, 2018.
The Joint Bookrunners are:
Deutsche Bank / Nedbank

J.P. Morgan

Rand Merchant Bank

Standard Bank
The date of this Prospectus Supplement is May 15, 2018
Table of Contents
TABLE OF CONTENTS
Prospectus Supplement

Page

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-22
Description of the Notes
S-23
Global Clearance and Settlement
S-28
Taxation
S-32
Underwriting
S-35
Jurisdictional Restrictions
S-37
Legal Matters
S-43
General Information
S-44
Documents Incorporated by Reference
S-46
Base Prospectus

Page

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

23
Plan of Distribution

25
Official Statements

27
Validity of the Securities

28
Authorized Representative

29
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Further Information

30
S-i
Table of Contents
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
article 5.3 of the Prospectus Directive. 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. Upon listing and admission to trading of the Notes offered hereunder on the Luxembourg Stock Exchange, copies of this
Prospectus Supplement and the accompanying Prospectus, as well as the documents incorporated by reference herein, may be obtained from the
Luxembourg Stock Exchange website at http://www.bourse.lu.
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, Deutsche Bank AG, London Branch, J.P. Morgan Securities plc, 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.
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
Table of Contents
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-37 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
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Republic and your own assessment of the merits and risks of purchasing Notes pursuant to the offering. By purchasing Notes, you will be deemed to
have acknowledged that:
·
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.
S-2
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Annualised information is calculated as the quarterly data multiplied by four, while the annualised growth rates are derived by raising the 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
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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
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
S-3
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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.
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 2002/92/EC (as amended, the "Insurance Mediation 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
Directive. 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
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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:
·
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 January 26, 2018 (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 21, 2018, the National Treasury released the Budget Review 2018 (the "2018 Budget Review"), and on March 20, 2018, the South
African Reserve Bank released its March 2018 Quarterly Bulletin (the "March Quarterly Bulletin"). South Africa filed the 2018 Budget Review and the
March Quarterly Bulletin with the SEC on May 15, 2018 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 2018 Budget Review and the March 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 the most developed economy in Sub-Saharan Africa in terms of total GDP, and accounted for almost 23% of the aggregate GDP of Sub-Saharan
Africa during 2017 (source: IMF, World Economic Outlook Database, April 2018). The South African economy is diverse and supported by a well-
developed legal system and a sophisticated financial system.
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 and 0.6% in 2016 as a result of lower commodity prices, higher
borrowing costs, diminished business and consumer confidence, and drought. However, real GDP accelerated to an annualised rate of 3.1% in the
fourth quarter of 2017, marking the third consecutive quarter with growth above 2.0%, driven primarily by a faster pace of expansion in economic
activity in the secondary and tertiary sectors. By contrast, real output growth slowed notably in the primary sector, largely due to a contraction in
mining output. Growth in real agricultural output also decreased slightly, but remained positive overall.
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Faster growth in the real gross value added by the secondary sector in the fourth quarter of 2017 resulted from a third successive quarter of growth
in manufacturing output growth, supported by increased manufactured exports as well as a rebound in activity in the sector supplying electricity, gas
and water. By contrast, the real output of the construction sector contracted further as both residential and non-residential building activity decreased.
The acceleration in real output growth of the tertiary sector in the fourth quarter of 2017 was due to faster output growth in all four of the services
subsectors. Real activity in the commerce sector rebounded in the fourth quarter as the real gross value added by the wholesale, retail and motor trade
subsectors increased. Increased activity in land freight transportation underpinned the expansion in the
S-6
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real output of the transport sector, while the real output of the financial sector increased primarily as a result of increased activity in the equity market.
Since the end of the 2008-2009 recession, the labor market recovery has been sluggish. Employment growth remained low in the fourth quarter of
2017, despite three consecutive quarterly increases in real GDP. According to the Quarterly Labour Force Survey conducted by Statistics South Africa
("Stats SA"), the number of people employed in South Africa decreased by 21,000 from the third to the fourth quarter of 2017, lowering total
employment to approximately 16.2 million. Compared to the fourth quarter of 2016, total employment increased by 102,000, while the year-on-year
growth rate slowed significantly from 2.3% in the third quarter of 2017 to 0.6% in the fourth quarter.
Domestic inflationary pressures moderated significantly throughout most of 2017. In particular, food price inflation (with the notable exception of
meat prices) declined significantly following the end of the drought in the northern parts of the country and a bumper maize harvest, electricity price
inflation decreased by more than half and the appreciation of the Rand from early 2016 onwards has resulted in significantly lower prices of imported
goods.
Annual average consumer price inflation slowed from 6.3% in 2016 to 5.3% in 2017, with headline consumer price inflation falling below the
upper limit of the inflation target range set by the South African Reserve Bank ("SARB") in April 2017 and moderating further to 4.6% in July.
Subsequently, this measure of price inflation fluctuated within a fairly narrow band, and was 4.4% in January 2018, with the decline slowed primarily
by higher fuel price inflation as a result of high international crude oil prices.
Recent Developments
Political Developments
Mr Jacob Zuma resigned as President of South Africa on February 14, 2018. Mr Cyril Ramaphosa, Mr Zuma's former Deputy President, was sworn
in as President of South Africa on February 15, 2018.
On February 26, 2018, President Ramaphosa reshuffled the cabinet, which had been appointed by former President Zuma, and appointed African
National Congress Deputy President, Mr David Mabuza, as Deputy President of the Republic. Former Finance Minister Nhlanhla Nene was sworn in as
a member of parliament and appointed as Minister of Finance, while Mr Pravin Gordhan was appointed as Minister for Public Enterprises. Mr Malusi
Gigaba, who was serving as Minister of Finance at the time of the reshuffle, was appointed as Minster of Home Affairs. Following the cabinet reshuffle,
23 out of 35 departments have new political heads; in total, 15 ministers were reshuffled and 10 were removed.
Former President Jacob Zuma was formally served with a summons to appear in court on April 6, 2018 to face 16 charges of corruption, money
laundering and racketeering, originating from 783 questionable payments he received. However, the state prosecutors and former President Zuma's
lawyers were granted an adjournment by the Durban High Court until June 8, 2018.
Credit Rating Developments
On 23 March 2018 and 13 April 2018, respectively, both Moody's Investors Service ("Moody's") and Japan's Ratings and Investment
Information, Inc. ("R&I") affirmed South Africa's investment grade ratings and changed their outlooks from negative to stable.
Moody's, cited the following factors in affirming the rating:
·
The previous deterioration of South Africa's institutions is expected to gradually reverse under a more transparent, predictable policy
framework. The recent change in political leadership,
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including the election of Cyril Ramaphosa as President of South Africa on 15 February 2018, appears to have halted the gradual erosion
of the strength of South Africa's institutions.
·
The recent change in political leadership comes in parallel with growing signs of cyclical, and potentially structural, improvements in
economic growth, leading to improved growth performance and prospects.
·
The 2018 Budget Review contains a fiscal adjustment plan that is intended to stabilise and eventually reduce South Africa's debt burden.
Compared to the Medium Term Budget Policy Statement published in October 2017, the 2018 Budget Review outlines a strategy for
addressing rising fiscal pressures, with a front loaded, revenue-driven, fiscal adjustment, supported by material cuts in expenditures in
2018/2019 and future years to finance, among others, rising expenditure on education.
Similarly, while South Africa's ratings by both S&P Global Ratings ("S&P") and Fitch Ratings ("Fitch") are in the sub-investment grade category,
they carry stable outlooks. S&P and Fitch are expected to publish further credit rating announcements on 25 May 2018 and in June 2018, respectively.
Nevertheless, such ratings remain subject to on-going political and economic risks, including those set forth in "Risk Factors--Risks Related to the
Notes--There can be no assurance that the Republic's credit rating will not change" below.
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, 2016

December 31, 2017

Contribution
Contribution
to GDP
Share in
to GDP
Share in

Growth

Growth

GDP
Growth

Growth

GDP

Agriculture, forestry and fishing

10.2
0.2
2.3
17.7
0.4
2.6
Mining and quarrying

4.2
0.3
8.0
4.6
0.3
8.2
Manufacturing

0.9
0.1
13.7
0.2
--
13.5
Electricity, gas and water

2.3
0.1
2.3
0.2
--
2.3
Construction

1.1
--
3.9
0.3
--
3.8
Wholesale and retail trade, catering and
accommodation

1.7
0.2
15.3
0.6
0.1
15.0
Transport, storage and communication

0.8
0.1
9.4
1.5
0.1
9.4
Finance, insurance, real estate and business
services

2.3
0.5
22.2
1.9
0.4
22.3
General government services

1.4
0.2
17.0
0.3
0.1
16.8
Personal services

1.5
0.1
5.9
1.2
0.1
5.9
Sources: South African National Treasury and Stats SA.
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The following table summarizes the National Government debt as of the dates indicated in each of the years ended March 31, 2013 through 2018.

As of March 31,

2014

2015

2016

2017

2018

Rand (million) except percentages

Government bonds
1,217,512 1,399,282 1,572,574 1,727,085 1,949,577
Treasury bills

192,206
202,217
209,468
250,468
293,321
Marketable internal debt
1,409,718 1,601,499 1,782,042 1,977,553 2,242,898
Non-marketable internal debt

31,381
30,586
37,322
38,171
29,013
Total internal debt
1,441,099 1,632,085 1,819,364 2,015,724 2,271,911
https://www.sec.gov/Archives/edgar/data/932419/000104746918003842/a2235753z424b5.htm[5/17/2018 12:24:06 PM]

Total external debt(1)

143,659
166,830
199,607
221,934
217,811
Total gross loan debt
1,584,758 1,798,915 2,018,971 2,237,658 2,489,722
Cash balances(2)
(205,304) (214,709) (214,333)
231,411
205,196
Total net loan debt(3)
1,379,454 1,584,207 1,804,638 2,006,247 2,284,526
GFECRA(4)
(177,913) (203,396) (304,653)
241,514
--
As percentages of nominal GDP:

Net loan debt

38.1%
41.0%
44.2%
45.5%
48.6%
External debt

4.0%
4.3%
4.9%
5.0%
4.6%
As percentage of gross loan debt:

External debt

9.1%
9.3%
9.9%
9.9%
8.7%
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.
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

2013

2014

2015

2016

2017

Total current account (saar values)
5.8 5.1 4.6 2.8 2.5
Trade balance
2.0 1.4 1.1
0.8
1.5
Net services, income and current transfer payments
3.8 3.7 3.5 3.6 4.0
Net service payments
0.3 0.1 0.1 0.2 0.1
Net income payments
2.6 2.7 2.5 2.8 3.0
Net dividend payments
1.4 1.4 1.2 1.3 1.3
Net current transfer payments (mainly SACU(1))
0.9 0.9 0.8 0.6 0.8
Current account excluding SACU current transfers(2)
4.6 3.8 3.4 1.8 1.3
Notes:
(1)
SACU refers to the Southern African Customs Union
(2)
Excluding net transfer payments.
Source: South African Reserve Bank.
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Table of Contents
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)

Period

Low

High

Average

End

Year

2009

7.2439 10.5948
8.4372
7.3721
2010

6.6224
7.9704
7.3222
6.6224
https://www.sec.gov/Archives/edgar/data/932419/000104746918003842/a2235753z424b5.htm[5/17/2018 12:24:06 PM]

2011

6.5962
8.5423
7.2531
8.1319
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
January 2018
11.8483 12.4626 12.2073
11.8753
February 2018
11.5604 12.0987 11.8246
11.7735
March 2018
11.6360 12.0635 11.8365
11.8128
April 2018
11.8154 12.4260 12.0865
12.3651
May 2018 (through May 7, 2018)
12.5266 12.6450 12.5997
12.5266
Source: South African Reserve Bank.
On May 7, 2018, the exchange rate was R12.5266 per U.S. dollar.
S-10
Table of Contents

THE OFFERING
Issuer:
Republic of South Africa.

Securities Offered:
U.S.$1,400,000,000 5.875% Notes due 2030.

U.S.$600,000,000 6.300% Notes due 2048.

Maturity Date:
The 2030 Notes will mature on June 22, 2030.

The 2048 Notes will mature on June 22, 2048.

Aggregate Principal Amount:
U.S.$1,400,000,000 for the 2030 Notes.

U.S.$600,000,000 for the 2048 Notes.

Issue Price:
99.992% of the principal amount of the 2030 Notes, plus accrued interest, if
any, from May 22, 2018.

99.991% of the principal amount of the 2048 Notes, plus accrued interest, if
any, from May 22, 2018.

Issue Date:
May 22, 2018.

Interest Rate:
5.875% per annum for the 2030 Notes.

6.300% per annum for the 2048 Notes.

Current Yield:
5.875% as at the Issue Date for the 2030 Notes.

6.300% as at the Issue Date for the 2048 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.

https://www.sec.gov/Archives/edgar/data/932419/000104746918003842/a2235753z424b5.htm[5/17/2018 12:24:06 PM]

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