SA still number one FDI recipient in Africa

MAY 22, 2017
SA still number one FDI recipient in Africa

South Africa continues to be the largest recipient of Foreign Direct Investment (FDI) on the African continent, Brand South Africa said on Monday.

Brand SA said South Africa also continues to be the largest source of intra-regional investment, in addition to having recently made a comeback in the top 25 most attractive global investment destinations.

This was evidenced by findings from the EY Attractiveness Programme Africa 2017, the AT Kearney Foreign Direct Investment Confidence Index, as well as Brand South Africa’s Investor Perceptions Research.

The EY 2017 Attractiveness Program Africa measures FDI attractiveness of 46 African markets. It indicated that South Africa experienced an increase of 6.9% in FDI flows to the market in 2016.  The sectors that dominated include consumer products and retail.

“South Africa continues to attract the bulk of FDI projects destined for the continent with a share of 20.6%, Egypt at 11.7%, Morocco at 12%, Nigeria at 7.5%, and Kenya at 5.9%.  Notable in this regard is that EY indicates investment flows favoured Africa’s more diversified markets,” said Brand SA’s General Manager for Research, Dr Petrus de Kock.

He said the EY Programme results mean that South Africa’s economic profile and diversification remains a key attractiveness feature.

The EY 2017 Attractiveness Program Africa further notes that even as its economy remains under pressure, South Africa retains its appeal as a launch-pad for growth across the continent.

Dr de Kock said the findings on South Africa’s FDI profile underline the fact that global investors have confidence in the market and that they see the country as an attractive investment destination.

“Opportunities identified in these respective indices should be vigorously pursued through a collaborative approach between business and government in South Africa, especially after the credit ratings downgrade,” said Dr de Kock.

South Africa’s diversified economy, geographical location, infrastructure (hard and soft) and logistical capabilities play a major role in attracting investment, trade and related global economic activity.

The 2017 AT Kearney Foreign Direct Investment Confidence Index is characterised by a perception of safety in developed markets, Europe in particular.

However, the 2017 Index marked the emergence of newcomers United Arab Emirates (UAE), New Zealand and South Africa, which Dr de Kock said is a clear sign of a slight increase in investment intentions in emerging markets.

“According to the AT Kearney FDI Confidence Index, South Africa’s Gross Domestic Product growth is expected to reach 0.8% in 2017 and double to 1.6% in 2018. AT Kearney notes that with the country’s improvements in infrastructure and education, investors view South Africa as being poised to lead one of the world’s next major manufacturing hubs,” he said.

Last month, Cabinet welcomed the AT Kearney 2017 FDI report, which indicated that South Africa is the 25th most attractive destination for foreign direct investment globally, the first from the African continent. – SAnews.gov.za