CAPE TOWN: South African has retained its position as both the largest recipient of foreign direct investment (FDI) into Africa and the biggest African investor into the rest of the continent, but has seen declines in both inward and outward investment over the past year.
This parallels a fall of more than 8% in the volume of FDI projects that Africa received overall, even though the value of the projects soared 136% to a record high, boosted by a handful of large investments, particularly in North Africa, according to EY’s latest Africa attractiveness survey. The survey also found there had been a marginal slip in investors’ perceptions of Africa, which reached the lowest level since 2011, mainly because of political risk factors such as instability and corruption.
We are starting to see a recovery in the rest of the world, and Africa will find it has to compete for that capital,” said EY SA’s Chief Ajen Sita. The survey found a fall in the number of FDI projects announced into SA last year, with the country netting only 121 new projects, down 17.7% on the 2013 figure, as the largest investors, such as Germany and Spain, announced fewer projects.
SA’s companies ranked as the continent’s second-biggest investor group overall, launching 53 projects last year, down from 65 in 2013. Western Europe as a region still accounts for most of the FDI into Africa but the US is the single largest investor.
