Statistics on who invests in South Africa

South Africa retains great lustre and appeal as a foreign direct investment (FDI) location — but who are the biggest foreign investors and how can government get some of the action?

Foreign Direct Investment (FDI) is an economic term used to describe when international companies build facilities, purchase equipment, hire workers and create products and services in the South Africa.

The world’s multinationals are flush with cash, and the world’s nations are locked in a pitched battle to win some of that cash in the form of FDI.

Bloomberg has released a new graph detailing the top contributors of foreign investment in SA.

The graph – which is based on Reserve Bank data – shows that the UK (R519.4 billion), the Netherlands (R346.3 billion), and Belgium (R285.7 billion) were the biggest foreign investors as at the end of 2017.

The graph is especially pertinent as the UK, USA, Germany, the Netherlands and Switzerland were drawn into this spotlight this weekend after the Sunday Times reported that the five countries had written to President Cyril Ramaphosa that foreign investment is at risk because of the country’s failure to prosecute people for government corruption.

The countries called for a ‘clear, unqualified and manifest political commitment to the rule of law, the independence of the judiciary and to honest and ethical business practices’.

The countries said that they were also concerned about the challenges of foreign investment, referring to the ‘constant changes of the goalposts’ in the regulatory framework for mining, BEE targets and intellectual property rights.

While the South African government did not comment on the contents of the memorandum, the Department of International Relations and Cooperation did issue a statement on Sunday (3 February), criticising the countries for departing from diplomatic practice in issuin the memorandum.

The heads of the countries’ diplomatic missions met with department Director General Kgabo Mahoai, where the parties agreed that “proper diplomatic channels and protocols will be followed” in future, the department said in a statement distributed Monday.

The government began an inquiry into state corruption last year after Ramaphosa became president and promised to root out graft. He also pledged to raise $100 billion in investment to boost a sluggish economy and employment.