Global investors show confidence in South Africa

Investor confidence in South Africa has improved in 2014, according to a new report from a global management consulting firm.

South Africa climbed two spots to become the 13th most attractive destination for foreign direct investment globally, said the report by AT Kearney. The firm surveyed the senior executives of 300 of the world’s leading corporations.

Last year, South Africa dropped three spots from number 12 to 15 on the list. According to the latest Foreign Direct Investment Confidence Index (FDICI), the US remained the most attractive investment destination.

Africa was doing well with an increase in FDI flows of 12%, driven partly by investment in extractive industries, manufacturing, and services. FDI flows into Africa were expected to continue to grow.

Foreign Direct Investment Confidence Index

Country 2014 Rank
2013 Rank
Change
United States 1 1 0
China 2 2 0
Canada 3 4 +1
United Kingdom 4 8 +4
Brazil 5 3 -2
Germany 6 7 +1
India 7 5 -2
Australia 8 6 -2
Singapore 9 10 +1
France 10 12 +2
United Arab Emirates 11 14 +3
Mexico 12 9 -3
South Africa 13 15 +2
Switzerland 14 18 +4
Malaysia 15 25 +10
Sweden 16
Chile 17 22 +5
Spain 18 16 -2
Japan 19 13 -6
Italy 20
Belgium 21
Netherlands 22
Denmark 23
Turkey 24
Indonesia 25 24 -1

“Energy-related companies, retail companies and infrastructure and transport providers, for example, are all committed to invest in the continent,” said Wim Plaizier, a managing partner at AT Kearney Africa.

“The renewable energy independent power provider programme in South Africa has played a major role in driving investment. While each deal in itself may not be particularly large, these moves are all positive signs of the increased confidence of the global investor community.”

Nearly four out of five respondents are more optimistic about the global economy than they were a year ago.

“We feel confident that despite a slow and uneven economic recovery, executives who make FDI decisions are regaining a sense of measured confidence,” said Erik Peterson, AT Kearney partner and a co-author of the study.

“The 2014 FDICI is not only an indicator of FDI flows, but an excellent telescope into specific economic stories around the globe. We’re pleased that this year’s study portrays a more optimistic picture globally.”

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Global investors show confidence in South Africa