South Africa, recent ratings downgrades notwithstanding and economic and political volatility aside, has made it onto the 2017 AT Kearney Foreign Direct Investment (FDI) Confidence Index, entitled ‘Glass Half Full’, after a two-year absence.
The report said:
"South Africa makes a comeback in the Index, likely as a result of improving short-term economic prospects and the long-term investment potential in the country's manufacturing sector."
The report noted that South Africa's return to the index suggests that recent FDI trends may continue: FDI inflows rose 38 percent, to an estimated $2.4 billion last year, after falling to its lowest level in 10 years the previous year.
The report further said that South Africa has a mixed outlook with respect to attracting FDI in the coming years:
"On one hand, South Africa faces challenges related to governance, exchange rate volatility, and decreased trust in political leaders. The unemployment rate stands at 26.5%, and electricity and transportation infrastructure investments have stalled. On the other hand, the country has opportunities to capitalize on its improving economy and regional role. Its GDP growth is expected to reach 0.8% in 2017 and double to 1.6 percent in 2018."
South Africa is in 25th place, out of 25 countries listed. The US is in first place.
