PwC South Africa Economic Outlook: Unlocking foreign direct investment
South Africa has seen a net FDI inflow in every year since the global financial crisis.
By PwC
We’re pleased to share our fourth South Africa Economic Outlook report for 2024 which focuses on foreign direct investment (FDI) and what local companies can do to attract international deal interest.
It would come as a welcome surprise to many South Africans to learn that, despite the country’s many challenges, our economy still attracted almost R100 billion in foreign direct investment (FDI) inflows in 2023 – equal to 1.4% of GDP. In fact, while some might expect South Africa’s investment outflows to be larger than inflows, the country has seen a net FDI inflow (inflows minus outflows) in every year since the global financial crisis.
South Africa has many positive attributes for foreign investors, including world-class financial services and communication industries. Also, the perceptions among non-residents of South Africa’s public governance and business ecosystem are ‘moderately positive’. These perceptions align with results from international benchmarking reports showing that South Africa’s global rankings on governance and the business environment is near the middle of the pack - and not as dismal as some might think.
In PwC’s experience, potential foreign investors are looking for three specific things from prospective investment targets in South Africa: 1) a track record of commercial sustainability across all the systemic crises the country has experienced over the last 30 years; 2) analysis showing they are well positioned to maintain their performance into the future; and 3) capabilities that can be exported to solve emerging issues in other territories.
Key content in this report includes:
FDI trends: South Africa continues to receive strong foreign investment inflows, with manufacturing the most capitalised industry.
What non-residents think about South Africa: moderately positive impressions of public governance and the business ecosystem.
Illustrative example: Economic impact simulation of a R5 billion foreign investment in local automotive manufacturing.
Shine your shoes: what South African companies can do to attract foreign deal interest.
How PwC assists our clients with structuring investment deals and measuring the economic impact of investments.
You can explore further insights by visiting the South Africa Economic Outlook webpage.