S Africa needs to increase positive news flow to attract FDI – Grant Thornton
Despite negative perceptions of South Africa’s local economy, compounded by ongoing social challenges, the country remains the single-biggest recipient of foreign direct investment (FDI) on the continent, capturing more than a quarter of the continent’s total FDI allocation.
“But, to many countries outside, the dominant story about South Africa is one of crime, violence and, more recently, of poor labour relations,” noted Grant Thornton South Africa chairperson Deepak Nagar in a statement, adding that the country needed to counter the negative headlines and perceptions with more positive news that promotes the nation’s promising, emerging economy.
“Many emerging economies still face tough social challenges but, beyond the negative headlines, there is great investment potential for businesses to tap into,” he added, noting that, while no economic growth was expected for this year, South Africa had still clinched its biggest investment deal in 40 years, namely the R11-billion investment deal that the Coega Development Corporation signed with Beijing Automobile International Corporation.
This deal will see the establishment of a vehicle manufacturing plant in the Coega Industrial Development Zone, near Port Elizabeth.
“Most businesses in search of growth will, at some point, consider expanding into an emerging economy. The large working-age populations and huge, hungry consumer markets that these countries offer are strong pull factors for ambitious businesses,” said Nagar.
“Yet there is often something holding businesses back from investing in South Africa, namely the tough social challenges documented on an almost daily basis by the world’s media.”
Another emerging economy, Mexico, attracted $28.4-billion of FDI – a 25.8% increase on the previous year, catapulting the nation into AT Kearney’s list of the world’s top ten biggest recipient nations of FDI. Nevertheless, global perceptions of Mexico, similarly to South Africa, are those of a nation challenged by drug trafficking, violence and corruption.
POSITIVE PULLS
Nagar believes South Africa has a lot to offer businesses interested in expanding in the country. Alongside developed physical and digital infrastructure, South Africa has a well-regulated and secure stock market, tough banking regulations, attractive foreign exchange provisions, and political stability. This is the narrative that South Africa has to emphasise to the global community, he reiterated.
“There should be a greater emphasis on the country providing international businesses with good, concise information about relevant factors – such as economic performance, the wellbeing of the population and its strengths,” said Nagar.
“Communication must be constant and consistent over multiple platforms, as we continuously craft messages to increase the country’s brand as an investment destination,” he concluded.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation