{"id":170937,"date":"2017-04-19T15:07:46","date_gmt":"2017-04-19T13:07:46","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=170937"},"modified":"2017-04-19T15:13:31","modified_gmt":"2017-04-19T13:13:31","slug":"south-africa-ranked-among-top-countries-for-foreign-direct-investment","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/170937\/south-africa-ranked-among-top-countries-for-foreign-direct-investment\/","title":{"rendered":"South Africa ranked among top countries for foreign direct investment"},"content":{"rendered":"

Despite its recent credit ratings downgrades, and political risk<\/span>s,\u00a0South Africa has climbed back into the 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index.<\/p>\n

A.T. Kearney’s index<\/a>, entitled Glass Half Full<\/i>, finds that while global business executives are increasingly worried about the negative effects of politics and geopolitics, they are nevertheless more bullish on the global economy and FDI prospects.<\/p>\n

Global business executives continue to see an increase in geopolitical tensions as the highest risk in the external environment.<\/p>\n

The United States<\/span> again tops the FDI Confidence Index, holding its first-place position for the fifth year in a row. Germany<\/span> rises to the second position in the FDI Confidence Index, followed by China<\/span> in third place. The United Kingdom<\/span> and Canada<\/span> round out the top five spots.<\/p>\n

“South Africa makes a comeback in the Index, likely as a result of improving short-term economic prospects and the long-term investment potential in the country\u2019s manufacturing sector,” A.T. Kearney’s report said.<\/p>\n

“Despite some continued economic volatility due to low global commodity prices, the Middle East<\/span> and Africa<\/span> make a comeback on the Index after a two-year absence,” it said.<\/p>\n

The United Arab Emirates<\/span> ranks 21st on the Index, with South Africa<\/span> rounding out the Index in the 25th spot. “This could signal a desire by global investors to diversify the location of the FDI after several years of a ‘flight to safety’ trend.”<\/p>\n

The report said that while overall FDI flows to Africa decreased 5% in 2016 to an estimated $51 billion, South Africa bucked the overall regional trend, with UNCTAD estimating its FDI inflows increased 38% in 2016. “It should come as no surprise, then, that South Africa claims the final spot in the top 25.”<\/p>\n

\"\"<\/a>South Africa<\/strong><\/p>\n

The report said that South Aafrica’s return to the index would seem to suggest that recent FDI trends may continue: FDI inflows rose 38% to an estimated $2.4 billion last year after falling to its lowest level in 10 years the previous year.<\/p>\n

According to UNCTAD, the 2015 slump was a result of weak economic growth, low commodity prices, and high electricity costs coupled with divestments from non-core assets in the first quarter of 2016.<\/p>\n

The report said that South Africa has a mixed outlook with respect to attracting FDI in the coming years.<\/p>\n

“On one hand, South Africa faces challenges related to governance, exchange rate volatility, and decreased trust in political leaders. The unemployment rate stands at 26.5%, and electricity and transportation infrastructure investments have stalled.<\/p>\n

“On the other hand, the country has opportunities to capitalize on its improving economy and regional role. Its GDP growth is expected to reach 0.8% in 2017 and double to 1.6 percent in 2018.”<\/p>\n

It said that investors may anticipate that with renewed improvements in South Africa\u2019s infrastructure and education, the country is poised to lead one of the world\u2019s next major manufacturing hubs.<\/p>\n

“In fact, industry sector investors in our survey indicated a much stronger preference for investing in South Africa than investors in other sectors did. South Africa\u2019s large semi-skilled and unskilled workforce is likely a draw for these investors as well.”<\/p>\n

The report highlighted recent developments in FDI which seem to track with these sentiments.<\/p>\n

Automobile production has become a strong source of FDI in South Africa,\u00a0A.T. Kearney said. For example, in 2016, BMW invested $417 million in the carmaker\u2019s South African operations to begin production of its newest X3 sport-utility vehicle model, it said.<\/p>\n

\n

Read: Why we should ban the word \u2018junk\u2019 to describe South Africa\u2019s credit status<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Despite its recent credit ratings downgrades, and political risks, South Africa has climbed back into the 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index. <\/p>\n","protected":false},"author":10,"featured_media":36175,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[11881,26],"class_list":["post-170937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-a-t-kearne","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/170937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=170937"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/170937\/revisions"}],"predecessor-version":[{"id":170949,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/170937\/revisions\/170949"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/36175"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=170937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=170937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=170937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}