South Africa leads as the top destination in Africa for inward foreign direct investment (FDI) and shows clear economic potential, according to new research from fDi Markets.
Between 2010 and 2014, the country saw the highest number of inward FDI projects in Africa with 667 investments chiefly in the business services sector (19 percent). This is closely followed by software and IT services (17.86 percent) and financial services (12.62 percent).
South Africa’s vast mining industry saw precious mineral reserves and prices dwindle in 2014. The country also relinquished its status as Africa’s biggest economy to Nigeria, following the latter’s recalculation of its GDP base. Unemployment continues to have a crippling effect on the nation - with youth unemployment hovering at 54 percent - and growth is set to average 2 percent. However, good corporate governance and transparency keeps South Africa’s Johannesburg Stock Exchange (JSE) - the continent’s oldest and largest equity market - a draw for overseas investors. Further, following an acute depreciation of the rand to its lowest in 15 years, the economy is showing signs of embarking on an export-led recovery.
Meanwhile a World bank report states that the continent of Africa has become the second most attractive investment destination in the world – ranking just behind North America.
