President Cyril Ramaphosa has thrown a subtle shade at his predecessor, Jacob Zuma, while touting an increase in foreign direct investment (FDI) flows into South Africa “over the last five years.”
Writing in his weekly newsletter this week, Ramaphosa cited a recent PWC South Africa Economic Outlook that says South Africa has recorded positive FDI flows every year since the 2007-2009 global financial crisis.
“Data from the South African Reserve Bank (SARB) shows that the country’s net FDI flows averaged R58 billion per annum after the global financial crisis when excluding 2021,” PWC explains.
“Most recently, South Africa recorded FDI inflows of R96.5 billion (1.4% of GDP) in 2023 and outflows of R5.2 billion (0.1% of GDP), for a net inflow of R91.3 billion (1.3% of GDP).”
Ramaphosa’s subtle dig at Zuma?
Citing these figures, Ramaphosa wrote, “This supports a trend where foreign direct investment has, on average, been far greater over the last five years than over the previous decade.”
The PWC data shows that FDI inflows increased from 2018, when Ramaphosa was elected to office, compared to the latter years of Zuma’s second term.
“Since this administration took office, we have held five well-attended Investment Conferences that have attracted R1.5 trillion in investment commitments across a broad range of economic sectors,” Ramaphosa said.
“Over one-third of these pledges have translated into job creating businesses and business expansions in renewable energy, mining, packaging, automotive, retail, manufacturing, transportation and other sectors.”
However, he acknowledged that South Africa’s FDI levels, as a percentage of GDP, remain lower than the global average.
“It needs to be much higher if we are to drive sustainable growth. That is why we continue to work to implement our policies and align regulatory and other obstacles, so that we can attract higher levels of investment,” he said.
Various challenges have constrained South Africa’s potential as an investment destination, including load shedding, logistical challenges and over-regulation of the economy.
The President cited various reforms the government is implementing to address these constraints, such as the Energy Action Plan, reduction of water use licence waiting times, and partnerships with business and labour to address logistical issues.
“We will continue to build on the gains that we have made towards creating an enabling business and investment climate that promotes economic growth and creates jobs,” he wrote.
“It is only through attracting higher levels of investment, both foreign and domestic, that a swift, sustainable economic recovery can be assured.”