Have you ever wondered why anyone would want to invest in South Africa? The economic reasoning for such a decision, that is. In recent weeks, I have been asking myself this question with increased regularity. On April 13, I decided to employ Google to see the results it delivers for ‘Why invest in South Africa?’

The top two unsponsored results returned were from the Department of Trade and Industry (DTI) and the South African consulate-general in New York City, with the latter citing the DTI as the source of its information, which differs from the information on the DTI website. The top sponsored result was from ‘Investment Opportunities – barclaysafrica.com’.

The DTI offered the following reasoning for investing in South Africa on its website, under the heading ‘Why Invest in South Africa’: “Today’s South Africa is one of the most sophisticated, diverse and promising emerging markets globally. Strategically located at the tip of the African continent, South Africa is a key investment location, both for the market opportunities that lie within its borders and as a gateway to the rest of the continent, a market of about one-billion people. South Africa is the economic powerhouse of Africa and forms part of the Brics group of countries with Brazil, Russia, India and China.

“It has a favourable demographic profile and its rapidly expanding middle class has growing spending power. South Africa has a wealth of natural resources (including coal, platinum, coal, gold, iron-ore, manganese, nickel, uranium and chromium) and it enjoyes (sic) increased attention from international exploration companies, particularly in the oil and gas sector. It has world-class infrastructure, exciting innovation, research and development capabilities and an established manufacturing base. It is at the forefront of the development and roll-out of new green technologies and industries, creat- ing new and sustainable jobs in the process and reducing environmental impact.

“South Africa has sophisticated financial, legal and telecommunications sectors, and a number of global business process outsourcing operations are located in the country. It has political and macroeconomic stability, an abundant supply of semiskilled and unskilled labour, and it compares favourably with other emerging markets in terms of the overall cost of doing business. For professional jobs, labour costs are less than half of the cost of European countries. For manufacturing jobs, labour costs are around one-third of the cost of Europe. The South African government has introduced wide-ranging legislation to promote training and skills development and fast-track the building of world-class skills and competences. One of the main reasons for South Africa becoming one of the most popular trade and investment destinations in the world is due to the country ensuring that it can meet the specific trade and investment requirements of prospective investors. South Africa has a host of investment incentives and industrial financing interventions that are aimed at encouraging commercial activity and its trade rules favour a further expansion in South Africa’s burgeoning levels of international trade. South Africa’s unrivalled scenic beauty and reputation for delivering value for money make it an attractive leisure and business travel destination.”

One can safely say that this was last updated prior to April 7, 2014 (more than two years ago), the day on which Nigeria’s economy surpassed South Africa’s as the largest on the African continent, based on the size of its gross domestic product (GDP). Sadly, South Africa no longer is ‘the economic powerhouse of Africa’. The article ‘the’ should be replaced by ‘a’. The Protection of Investment Act of 2015 fails to get a mention, as do the Private Security Industry Regulation Amendment Bill and the Mineral and Petroleum Resources Development Amendment Bill.

As for the South African consulate-general in New York City, it offers the following in response to the question ‘Why invest in South Africa?’ (owing to space constraints, the full text is not quoted): “The World Economic Forum’s Global Competitiveness Report 2008/09 ranked South Africa forty-fifth out of 134 global nations. South Africa’s GDP grew at a healthy 5.2% in 2007 and at a lower 3.1% in 2008, owing to the impact of the global economic crisis. South Africa is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed First World economic infrastructure, with a vibrant emerging market economy.

“South Africa is also one of the highest-ranking developing economies and surpasses countries such as Hungary, Italy, Brazil and Thailand. The country leads the continent in industrial output (40% of Africa’s total output) and mineral production (45% of total mineral production) and generates most of Africa’s electricity (over 50%). By 2007, the economy was stronger than at any time over the past 20 years. The national government deficit decreased from –4.8% of GDP in 1994, to –0.6% in 2008, meaning that, over time, the South African government is moving away from spending more than its revenue. The national government debt decreased from 50.4% of GDP in 1995 to 23.8% in 2008, resulting in a reduc- tion in government’s liability over the years.

“Global economic activity deteriorated sharply in 2008 and 2009, as the international credit crisis intensified. According to the IMF World Economic Outlook Update (January 2009), global output growth is expected to slow further, from 3.4% in 2008 to 0,5% in 2009, before rebounding to 3.0% in 2010. In several advanced economies, real output is projected to contract in 2009, while economic growth is expected to moderate significantly in emerging-market and develop- ing countries. Against this backdrop, South Africa has not escaped the effects of the global economic downturn due to its open economy. Despite declining GDP, South Africa is still posting positive growth results but could slide into a recession during 2009.

“Today, South Africa is not only self-sufficient in virtually all major agricultural products, but in a normal year, it is also a net food exporter. Major import products include wheat, rice and vegetable oils. Despite the farming industry’s declining share of GDP, it remains vital to the economy and the development and stability of the Southern African region. Over the past five years, agricultural exports have contributed on average about 8% of total South African exports.”

The age of the quoted statistics is an obvious concern, as much has happened in recent years. As a consequence, the statistics no longer provide a true reflection of the South African economic environment or of its performance. As South Africa edges towards junk status, although attracting investment might be an important endeavour, preventing divestment is arguably more so – protect what you have.

An April 12 Bloomberg story headlined ‘Cash flees South Africa in longest run of outflows since ‘99’ reported: “Money poured out of the country for the sixteenth consecutive quarter in the final three months of 2015, the longest streak of quarterly outflows since the five years through September 1999, according to central bank data.” A lot of this is, no doubt, from South Africans themselves. So, if South Africans are not willing to invest in their own country, why should others do so?