I. COMMERCIAL OVERVIEW - EXECUTIVE SUMMARY

South Africa represents one of the last untapped markets for many
American exporters and investors.

With President Nelson Mandela at the head of a democratically
elected transitional government South Africa rejoined the world
trading community after a decade of sanctions and pariah status.
Its parallel first and third world economies will merge into a
unique entity, a middle-income developing country with
infrastructure, services and business sophistication that often
equal those found in fully developed nations. The challenge now is
to incorporate all South Africans into the mainstream economy while
maintaining the kind of business climate that encourages economic
growth, stability, trade and investment.

The successful election and transfer of power have produced a
tangible surge in business confidence and a sharp rise in the
number of business visitors from the United States. Once here they
find that South Africa offers exciting potential in project
management,  financial services, consulting, construction and many
other fields connected to the long-term reconstruction and
development effort required to bring the benefits of economic
development, heretofore enjoyed by only five or six million South
Africans, to the more than thirty five million people formerly
disenfranchised by apartheid. The rapidly growing black middle
class represents the prime area of growth in consumer spending;
products and services aimed at that market will find ready
acceptance and good demand. Many smaller, minority-owned American
suppliers can find unique opportunities in these spheres.

There also are significant opportunities in more traditional
sectors - aircraft and parts, chemicals, machinery, computers and
electronics, pharmaceutical and medical equipment for example.

Experience gained marketing in a culturally and racially diverse
home market gives American exporters an edge. A similar benefit
accrues to American companies operating in South Africa. Experience
in managing a diverse work force, EEO, affirmative action and
similar management skills gives U.S firms a competitive advantage
that U.S. firms have and most competitors do not. Coupled with the
ready acceptance and good reputation American products enjoy here,
these factors can go far in overcoming the market inroads made by
competitors from countries that did not impose or enforce sanctions
as vigorously as did the United States. American suppliers can now
regain market share lost to Europeans and Asians over the past
decade.

Although American exporters can benefit from the goodwill and
gratitude earned by the United States and other nations that
forcefully opposed apartheid through sanctions, in the end business
is business. Emotional ties help to get in the door, solid bottom
line returns and sound business offerings are what consummate
deals. Here as elsewhere success requires  homework, hard work and
competitiveness.