The South African Nation Brand continues to be the largest recipient of FDI on the African continent, and is the largest source of intra-regional investment – this is in addition to having recently made a comeback in the top 25 most attractive global investment destinations.
This is according to findings from the EY Attractiveness Programme Africa 2017, the AT Kearney Foreign Direct Investment Confidence Index, as well as the Brand South Africa’s Investor Perceptions Research.
Brand South Africa’s General Manager for Research – Dr Petrus de Kock says the findings on South Africa’s FDI profile underlines the fact that global investors have confidence in the market, and 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,” adds Dr de Kock..
Major findings from these indices are that South Africa attracted 20.6% of all FDI projects on the African continent in 2016 with an increase of 6.9% on 2015; the country is the 6th largest source of FDI in the African economy; and the diversified economy, geographical location, infrastructure (hard and soft) and logistical capabilities – play a major role in attracting investment, trade and related global economic activity.
“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. This means 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 launchpad for growth across the continent,” said Dr de Kock.
The EY 2017 Attractiveness Program Africa, measures the FDI attractiveness of 46 African markets and moreover indicates 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 – projects more than doubled from 19 in 2015 to 41 in 2016.
The 2017 A.T. 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 UAE, New Zealand, and South Africa – a clear sign of slight increase in investment intentions in emerging markets according to Dr de Kock.
“According to the AT Kearney FDI Confidence Index, South Africa GDP 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,” concluded Dr de Kock.
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