South Africa remains a competitive business and investment destination despite challenges in the global economy. The country continues to compare well with other emerging markets and it is committed to improving its global competitiveness and reputation.
According to the OECD’s Restrictiveness Index, South Africa ranks amongst the most open jurisdictions for FDI (foreign direct investment) in the world. Openness is reflected in the overall trend of growing FDI into South Africa over the last 20 years and FDI now accounts for around 42% of GDP.
Over the last five years South Africa accounted for the bulk of new investment projects in Africa with investment arriving from the US, some member states of the EU and increasingly from China, India and other Asian countries.
The 2014 AT Kearney Foreign Direct Confidence Index ranks South Africa 13th among 25 leading economies moving up two places from 2013 and ranking higher than countries such as Switzerland, Sweden and Netherlands. South Africa ranks 56 out of 144 in the WEF Global Competitiveness Index 201415 survey and ranks second overall in Africa.
In the energy field, Eskom is currently constructing two mega coal fired power plants and a pump storage facility. The projects will see over 10,000 megawatts of capacity connected to the national grid.
Apart from the Eskom new build programme, the government has procured 4,000 megawatts from the Independent Power Producers (IPPs) under the REIPP procurement process in three windows. The first two bid windows of the REIPP procurement process attracted R82.7bn from private investors, with window three expected to be R51bn at financial close.
In mining, although South Africa has steadily declined in terms of production ranking in recent years, it remains a significant strategic partner as it is not only within the top ten major production sources in the world, but the Government’s beneficiation strategy seeks to align it to the national industrialisation programme, which sets to enhance the quantity and quality of exports, promote creation of decent employment and diversification of the economy, including promotion of the green economy.
South Africa is the last frontier country for petroleum development, including off shore oil and gas as well as shale gas prospects. It has possible offshore oil and gas resources of 9 bn barrels oil and 11 bn barrels oil equivalent of gas. The country has an estimated shale gas resource of 490 trillion cubic feet (TCF) and the conservative estimates for an economically exploitable resource range from 18 TCF to 70 TCF.
President Jacob Zuma has indicated nine areas that will be a focus for the financial year 201516:
At Brand South Africa we encourage any investor who has an interest in South Africa to look at these priorities and bring about solutions that will assist in each of the respective spheres.
South Africa is a new democracy having attained its freedom in 1994. As part of its developmental trajectory, South Africa has developed a National Development Plan or Vision 2030 which will drive its economic and social development. South Africa has also realised the importance of diversifying its traditional economic partnerships with developing countries.The BRICS markets are critical to this objective. The National Development Plan is the underlying foundation on which all the above mentioned opportunities are built. It is the blueprint for achieving South Africa’s economic success.
Our BQ Bulletin emails will land in your inbox at 7.30am, Monday to Friday, with a mix of the latest local business news, national news, and features to inspire you. Sign up here!
Click here to read our privacy statement