South Africa still a top dog

South Africa is still seen as the top investment destination in Africa amongst European investors.

The European House Ambrosetti (TEHA) Africa CEO, Pietro Mininni, said “we keep saying, and we believe, that South Africa is the economic hub of the continent, and its best investment destination. We believe so. We want to be in this fantastic country and region forever.”

Mininni expressed these comments at the 11th TEHA CEO Dialogue on Southern Africa, which was attended by business and institutional leaders.

According to TEHA’ Global Attractiveness Index (GAI), South Africa was the top destination to invest in on the continet improving from the second place last year.

The Index is desinged to assess economic attractiveness in Africa. It’s data combines forward- and backward-looking analysis.

Since the TEHA CEO Dialogue started in 2014, Italy’s foreign direct investment in SABC countries and towards South Africa more than truipled, with South Africa’s share accounting for two-thirds of the current 2.2 billion euros (R42 billion).

Gauteng Premier Panyaza Lesufi said that the EU, which is one of South Africa’s largest trading partners, was a large source of funding, and created roughly 16,500 jobs in the province. He added that there has been almost R4 trillion in trade between the regions since 2018.

The forum also noted that Sub-Saharan Africa will have a vital role to play in global value chains in the transition to renewable sources of energy, with the continent positioned to benefit from its vast mineral wealth.

In South Africa’s case, it hold a significant share of the world’s manganese reserves. The element seen as a critical mineral in electric vehicles, with each EV needing roughly 20kg of the element.

Not consistent

Despite the comments at the TEHA CEO Dialogue, several other reports show that the wealthy on the continent may be turning their back on South Africa.

A recent report by investment management firm Ocorian showed that Botswana is increasing efforts to position itself as a destination of choice for high-net-worth individuals (HNWIs).

South Africa’s northern neighbour, which was long reliant on diamond mining as its economic backbone, is actively diversifying into financial services.

Botswana is pushing for improved regulatory frameworks and a more business-friendly environment.

On the East of the continent is Rwanda, which is also trying to lure the continent’s wealthy.

The nation is known for its post-genocide recovery and a pursuit of technological innovation. It is also seen as safe, stable and for its long-term investment potential.

That said, both nations face competition from Mauritius, which is known for its luxury resorts and low-tax policies.

A report by Henley & Partners and New World Wealth showed that the HNWI population in Africa is expected to grow by 65% over the next decade.

With the emergence of these other African countries, South Africa’s position may be under threat.

These nations could lure investment and wealth away from South Africa, especially if they offer competitive advantages, such as lower tax rates and streamlined regulations.

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