FDI into SA slumps

Foreign direct investment (FDI) flows into South Africa decreased by 24% between 2011 and 2012, according to the United Nations Conference on Trade and Development (Unctad). The Unctad World Investment Report released on Wednesday shows that South Africa recorded a decline from $6bn (R60.6bn) in 2011 to $4.6bn (R46.46bn) in 2012. Unctad said this was largely due to net divestment in the third quarter of 2012 as a foreign mining company offloaded its stake in a local subsidiary. However, South Africa was Africa’s third-largest recipient of FDI inflows in 2012, after Nigeria and Mozambique. Although the decrease in FDI represented a 24% year-on-year reduction, it was above the pre-recession average of $3.9bn (R39.39bn) a year. Furthermore, South Africa experienced far more FDI inflows in greenfield new investments, particularly in the renewable energy sector. FDI flows into South Africa represented 9.1% of Africa’s total inflows in 2012.

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