FDI into SA climbs 30% despite political woes- UN

Harare - The ongoing economic and political uncertainty has not deterred the inflow of foreign direct investment (FDI) into South Africa, according to the latest World Investment Report released on Wednesday by the United Nations Commission for Trade and Development.
 
In 2016, South Africa got $2.3bn worth of FDIs, up 31% from 2015’s record low.

“South Africa, the economic powerhouse of the continent, continued to underperform, with FDI at a paltry $2.3bn, up 31% from 2015’s record low, but still well below its past average”, the report says.

Outward investment from Africa remained steady at $18bn in 2016, with higher outflows from Angola offsetting declines in FDI from Nigeria and South Africa.

FDI from SA slowed by 41% in 2016 to $3.4bn, down from a high of $5.7bn in 2015.

“The reduced investments from South Africa, the DRC, Ghana and Nigeria, in that order, were offset by the rise of outflows from Angola, the region's largest investor.”

Intra-African FDI remained prominent in 2016, driven by South African and Moroccan firms. South Africa's Sanlam purchased a 30% stake in Morocco's Saham Finances for $375m.

Overall, in Southern Africa, FDI inflows fell by 18% to $21.2bn, as flows declined in eight of the ten countries in the sub-region. In Angola, FDI flows declined by 11% to $14.4bn as reinvested earnings shrank.  

Botswana also recorded a significant drop, from $679m in 2015 to $10m last year. Mozambique recorded FDI inflows of $3.09bn and Zambia $469m. Zimbabwe’s investment inflows declined in 2016 to $319m compared to $421m in the prior year.

Meanwhile, FDI flows to Africa are likely to increase moderately in 2017 on the back of modest oil price rises and a potential increase in non-oil FDI.

Global FDI is expected to rise by 5%, to almost $1.8trn in 2017, after retreating by 2% to $1.75trn last year.