{"id":242071,"date":"2018-05-03T09:45:42","date_gmt":"2018-05-03T07:45:42","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=242071"},"modified":"2018-05-03T09:45:43","modified_gmt":"2018-05-03T07:45:43","slug":"south-africa-has-dropped-off-the-map-for-investors-economist","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/242071\/south-africa-has-dropped-off-the-map-for-investors-economist\/","title":{"rendered":"South Africa has dropped off the map for investors: economist"},"content":{"rendered":"

Economist at Economists dot coza, Mike Schussler says that foreign investors have lost interest in South Africa, and are opting to take their money to other destinations in Africa.<\/p>\n

In a column published on Thursday<\/a><\/strong>, Schussler said that investors he engages with as part of is business are consistently asking about investment opportunities in other African countries like Angola and Nigera – while almost completely disregarding South Africa.<\/p>\n

The response, Schussler said, was that South Africa was simply not drawing any interest anymore – a point that has been corroborated by hard data from reports by the IMF and World Economic Forum.<\/p>\n

According to Schussler, direct foreign investment (FDI) in South Africa has dried up to a point where local companies are now more invested in international markets, than international markets are invested here.<\/p>\n

Expressed as a percentage of GDP, at the end of 2017 the net FDI was -31% as a percentage of GDP – the negative value showing the balance of investment lies outside of South Africa.<\/p>\n

In total, South Africa has invested R3.3 trillion in foreign markets, while foreign markets only have R1.8 trillion invested here, meaning there is a balance of R1.5 trillion invested elsewhere.<\/p>\n

This is counter to almost every other emerging market economy, Schussler said.<\/p>\n

What can be done<\/strong><\/p>\n

According to Schussler, the trend can be reversed, but it will take work – and more than just the positive sentiment around the new leadership in South Africa.<\/p>\n

“Spending tax money more wisely; jailing corrupt leaders; reducing the toxic racial atmosphere; easing regulations and closing state enterprises that require tax money year after year.<\/p>\n

“Lowering the cost of transport; communications; water and electricity while fixing roads, and infrastructure – (these) are minimum requirements,” the economist said.<\/p>\n

But over and above these tough asks, are even more difficult requirements, he said.<\/p>\n

Notably, the government wage bill would need to be reduced by a third (as a percentage of GDP) – at a time when civil servants are demanding increases of over 10%. It would also require easing the tax burden to make the country a more attractive investment destination.<\/p>\n

“If South Africa just improved slightly, it would make a difference and certainly the improvement in business confidence, and consumer confidence are a good start,” Schussler said.<\/p>\n

\n

Read:\u00a03 things every South African investor should know right now<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Economist at Economists dot coza, Mike Schussler says that foreign investors have lost interest in South Africa, and are opting to take their money to other destinations in Africa.<\/p>\n","protected":false},"author":10,"featured_media":118672,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-242071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/242071","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=242071"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/242071\/revisions"}],"predecessor-version":[{"id":242083,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/242071\/revisions\/242083"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/118672"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=242071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=242071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=242071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}