SA's investment pipeline remains robust - dti

Source: – Fin24, 04/10/2015

Johannesburg - The investment pipeline into South Africa remains
robust, according to the acting head of investment promotion and
inter-departmental clearing house at the Department of Trade and
Industry (dti) Yunus Hoosen.


He was speaking at a seminar hosted by the department on the state of
foreign direct investment (FDI) in South Africa.


He said South Africa attracted R43bn in FDI in the previous financial
year. He explained that due to the cyclical nature of investment it
should be expected that both inward and outward investment stock may
vary from year to year.


"Over a protracted period of time, South Africa has maintained its
position as the top FDI destination in Africa as well as a prolific
investor on the African continent. Recent data indicate that this
trend is continuing based on the 2014/2015 investment pipeline and the
impact of various government programmes across the South African
economy," he said.


There has been a rise in intra-African trade which has mostly been
driven by the growth in competitiveness of African investors as they
acquire larger quantities of complementary assets, expand their
production scale and improve their brand appearance, according to
Timothy Dladla, director of economic research and policy coordination
at the Department of Trade and Industry (dti).


According to Dladla, the FDI inflow to South Africa was registered at
$3.31bn from January 2015 to July 2015 and 5 037 jobs were
created.



FDI from the developing world predominantly goes to South Africa,
North Africa and oil-exporting countries. As one of the faster growing
regions Africa experienced a significant growth in Greenfield FDI in
2014, Dladla explained.



From January 2003 to July 2015 a total of 1 344 FDI projects were
recorded. During the period, a total of 189 724 jobs were also
created. The sectors that attracted FDI were software and information
technology services, business services, financial services
communications and industrial machinery, equipment and tools.


"Global investment flows remain constrained due to fragile economic
conditions since the global financial crisis. FDI inflows from
Sub-Saharan Africa to South Africa recorded $2.08bn in Capex and
created 4 647 jobs between January 2003 and July 2015," he said.


The United Kingdom, United States of America, Germany, Australia and
India were key FDI sources for South Africa.


"Interestingly, India is now in the top five sources of FDI CAPEX in
the period January 2003 to July 2015, the only Brics country and the
only developing country," he explained.


The top five destination countries for FDI outflows from South Africa
include the United Kingdom, Nigeria, Ghana, Zambia and Unites
States.

The top five sectors and jobs created are metals,
coal, oil and natural gas, food and tobacco, consumer products and
communication.