Foreign Direct Investment in South Africa: A Comprehensive Analysis

This report examines Foreign Direct Investment (FDI) in South Africa, exploring existing levels across various sectors, including finance, real estate, manufacturing, and tourism. It highlights the significance of FDI for South Africa's economic development and details investment in key industries like tourism, agriculture, and medical services. The report presents FDI trends from 2005 to 2016, showing fluctuations and recent increases. A comparative analysis contrasts South Africa's FDI with other African countries, such as Congo, Mozambique, Egypt, and Nigeria, as well as Chinese investment in the region. The analysis uses data from UNCTAD, the World Bank, and other sources, providing a comprehensive overview of FDI in South Africa and its position in the African context.

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INTERNATIONAL BUSINESS ACROSS BORDER
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Existing levels of Foreign Direct Investment.
Noteworthy, the South African sectors of finance and insurance, Real estate
and business services, manufacturing, mining, transport, storage and
communication ,trade, catering and accommodation s have progressed through
foreign direct investment(Santander Trade portal,2017)Noteworthy, there’s
foreign investment to the tune of 40.7%,28.9%15.9%,10% and 4%
respectively .Further, there’s foreign direct investment in South Africa s financial
and capital market sector(Nose, Saxeegard et.al,2016)Notably, most African
countries which are still developing rely on foreign direct investment for
economic progression.
Foreign direct investment in Tourism, Medical services and
Agriculture Industries in South Africa
The south African tourism industry is in need of direct foreign investment due
to micro and macro determinants (Saynman, 2007).Foreign investment in the
tourism has been in terms of accommodation through the construction and
expansion of the hotel industry .Among the countries investing in South Africa is
Australia ,China, The United states of America, The United Kingdom among
other countries.
Foreign direct investment in the agriculture sectors is in form of subsidies and
better technological advances in the field of agriculture through research and
development based in South Africa. Further, medical services are receiving a
boost through better medical care facilities, research and development initiatives

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through foreign direct investment partners. Among South Africa s trading partners
are Australia, Canada and Brazil.
Foreign Direct Investment Chart on South Africa
2014
Source: UNCTAD, World investment Report 2015.
According to the Organization for Economic Development data statistics,
South Africa received the highest foreign direct investment between the years
2005 and 2009 when it slowed to 0.8 M from I.8 million (USD) in the year
2007.However,the rate of foreign investment picked up in 2010-11,at 1.02 and
1.2M respectively. In 2012, Foreign Direct Investment levels dropped to 0.9m
and later rose to 0.98 in the year 2013.Notably,the year 2014 experienced a
substantial raise to 0.8million to 1.2million (USD) in the year 2015 but later
dropped to 1.08million in the year 2016.
Currently South Africa has received substantial increase in foreign direct
investment since the first quarter of 2017 by 1868 (ZAR)billion according to the
statistics by Trading economics .Further, Foreign direct investment has averaged

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by 504.25 bn ZAR since the year 1956 up to now. Notably, Australia is the
biggest foreign direct investor in South Africa followed by Brazil and Canada.
Comparative Analysis between Foreign Direct Investment of South Africa
and
According to the World Investment Report of 2015, the top African countries
recipients of foreign direct investment for the year 2013 and 2014 were South
Africa, Congo, Mozambique , Egypt and Nigeria. Notably, in the year 2014,South
Africa received the highest figure of foreign direct investment at 6billion(USD)
whereas Congo received the least at 3 b(USD) followed by Egypt at 4
billion(USD) .Noteworthy, Mozambique and Nigeria both received an influx of
6bn in the year 2014.Further,South Africa offers foreign direct investment in
other African countries due to its developed status.

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Notably, the World Bank Report, South Africa Received 411.2M(USD) from
China as foreign direct investment which was the highest in all the African
countries followed by the Democratic Republic of Congo at 236.3m(World
Bank,2017)Also, Kenya received 101m in the year 2010 as the third largest
recipient of the Chinese Foreign direct investment venture. Among the least
recipients where Mozambique at 0.28m and Tanzania at 25.72m (USD).The
World Bank report suggests that South Africa is the best destination for foreign
direct investment as contrasted with other Sub-Saharan African countries.

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References
Nose ,M, Saxeegard, M Et.al.(2016)South Africa Selected Issues. International
Monetary Fund. Retrieved from
https://www.imf.org/external/pubs/ft/scr/2016/cr16218.pdf[Accessed 18 Aug
2017]
OECD.(2016)FDI Flows. South Africa. O.E.C.D. Retrieved from
https://data.oecd.org/fdi/fdi-flows.htm[Accessed18 Aug 2017]
Santander Trade portal (2017) South Africa: Foreign Investment. Trade
portal .Retrieved from
https://en.portal.santandertrade.com/establish-overseas/south-africa/foreign-
investment.[Accessed 18 Aug 2017]
Synman, A.J. (2007) A foreign Direct investment model for tourism. North West
University. Retrieved from
http://dspace.nwu.ac.za/bitstream/10394/4318/1/snyman_ja(1).pdf[Accessed 18
Aug 2017]
World Bank.(2017)Foreign Direct Investment Flows into Sub-Saharan
Africa(English.)The World Bank. Retrieved from
http://documents.worldbank.org/curated/en/505071468203651135/Foreign-direct-
investment-flows-into-Sub-Saharan-Africa[Accessed 18 Aug 2017]