Jul 05, 2012
SA ranks in top 20 of prospective FDI host economiesBack
Johannesburg|Africa|Ghana|Industrial|Industrial Development Corporation|Massmart|Mining|Wal-Mart|Africa|Brazil|China|Egypt|Ghana|India|Indonesia|Korea|Libya|Mozambique|Nigeria|Poland|Republic Of Congo|South Africa|The Netherlands|United States|USD|Services|Jorge Maia|Unctad|Sub-Saharan Africa
© Reuse this
The country ranked fourteenth, along with the Netherlands and Poland, in a survey of TNCs prepared and validated for the report by the United Nations Conference on Trade and Development (Unctad).
The ranking, which was topped by China, was based on the percentage of respondents selecting an economy as a ‘top destination’.
Industrial Development Corporation head of research and information Jorge Maia, who presented the WIR 2012 findings in Johannesburg on Tuesday, described the ranking as “ reasonably good news”. “Below us, interestingly, is a country like Korea,” Maia noted.
The survey responses also pointed to the growing importance of developing regions as locations for international production over the medium term. Among the top five countries, four were developing economies, including China, India (3), Indonesia (4) and Brazil (5) – the US was ranked second.
However, South Africa performed less well in Unctad’s ‘Foreign Direct Investment (FDI) Attraction Index’, which measures success in attracting FDI over a rolling three-year period.
The list is led by Hong Kong and includes eight developing and transition economies in its top ten, including the Republic of Congo. In addition, Ghana (16), Mozambique (21) and Nigeria (23) improved their rankings.
By contrast, South Africa was among a list of countries that Unctad said received less FDI than could be expected based on economic determinants.
Nevertheless, South Africa recorded a sharp turnaround in FDI inflows during 2011, which rose to $5.8-billion, or 13.6% of Africa’s total, during the period.
The rebound from $1.2-billion in 2010 was underpinned, Maia said, by Wal-Mart’s acquisition of a stake in Massmart, as well as mining-related corporate activity.
FDI into South Africa represented 7.5% of overall fixed investment in the country in 2011, and enabled it to emerge as the second-largest recipient, after Nigeria’s $8.9-billion.
The performance of Africa’s largest economy also accentuated the recovery in the inflows to sub-Saharan Africa as a region, which recovered from $29-billion in 2010 to $37-billion in 2011 – a level comparable with the 2008 peak.
Inflows to Africa as a whole declined, meanwhile, for the third successive year, to $42.7-billion from $43.1-billion in 2010. However, the decline was caused largely by the fall-off in investment to Egypt and Libya.
Unctad noted that, in addition to traditional patterns of FDI in sub-Saharan Africa’s extractive industries, the emergence of a middle class was fostering the growth of FDI in services such as banking, retail and telecommunications, as witnessed by an increase in the share of services FDI in 2011.
The outlook for Africa was “promising”, owing to improved investor perceptions, which were driven by relatively strong growth, higher commodity prices and economic reforms.
Maia noted that, during the first five months of 2012, purchases of sub-Saharan African firms (outside of South Africa) were more than double what they had been in the comparative period during 2011.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Macro and Micro News
To support issuing banks in Africa in expanding their trade finance operations, the African Development Bank (AfDB) has entered into a $40-million risk participation agreement (RPA) with Spanish banking group Banco Santander. The facility would tackle critical market...
Parliament's intelligence committee is dealing with a letter sent by former South African Revenue Service spokesperson Adrian Lackay, relating to the crisis facing the organisation. Lackay electronically sent a 29-page letter to the joint standing committee on...
The commander-in-chief of the world’s biggest investment bank on Wednesday gave the thumbs up to scaled investment in South Africa, which he sees as having “enormous potential” and also “a lot of risk”. Speaking at the Gordon Institute of Business Science (Gibs) in...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.