Foreign Direct Investment in South Africa Drops 74 Percent in 2015
Foreign direct investment in South Africa fell by 74 percent in 2015 to $1.5 billion, according to a new report by the United Nations Conference on Trade and Development released on Wednesday. “Central Africa and Southern Africa saw the largest declines in FDI,” UNCTAD said. “The end of the commodity ‘super-cycle’ had an impact on resource-seeking […]
Foreign direct investment in South Africa fell by 74 percent in 2015 to $1.5 billion, according to a new report by the United Nations Conference on Trade and Development released on Wednesday.
“Central Africa and Southern Africa saw the largest declines in FDI,” UNCTAD said. “The end of the commodity ‘super-cycle’ had an impact on resource-seeking FDI. Flows into Mozambique were down 21 percent but still notable at an estimated US$3.8 billion, while Nigeria saw its FDI decline by 27 percent to an estimated US$3.4 billion as the country was hit hard by the drop in oil prices. FDI into South Africa fell dramatically, down 74 percent to US$1.5 billion.”
FDI inflows to Africa fell by 31 percent in 2015 to an estimated US$38 billion, due largely to a decline of FDI in Sub-Saharan Africa. Compare that to inflows to developing Asia, which rose by 15 percent to an estimated US$548 billion, a new record. It continued to be the largest FDI recipient region in the world, accounting for one third of global FDI flows.
Hong Kong (China), with FDI inflows jumping to an estimated US$163 billion, became the largest recipient economy in the region and the second largest in the world. West Asia saw its FDI flows increase by 5 percent to US$45 billion after six consecutive years of decline. However, the increase was driven largely by a rise of FDI flows in Turkey (+30 percent from US$12.4 billion to an estimated US$16 billion).
Flows to North Africa reversed their downward trend as Egypt saw a rebound of investment from US$4.3 billion in 2014 to an estimated US$6.7 billion in 2015.
“Barring another wave of M&A deals and corporate reconfigurations, FDI flows are expected to decline in 2016, reflecting the fragility of the global economy, volatility of global financial markets, weak aggregate demand and a significant deceleration in some large emerging market economies. Elevated geopolitical risks and regional tensions could further amplify these economic challenges,” UNCTAD said.