South Africa losing its crown in Africa

Competition among African countries for foreign investment has increased significantly over the past few years, with South Africa no longer considered the only “gateway” into the continent.

While the country has not lost this status completely, it no longer has a monopoly in this regard, and stronger economic growth is needed to ensure it stands out among this increased competition.

This is according to Investec chief investment strategist Chris Holdsworth, who recently spoke to Newzroom Afrika on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland.

Holdsworth explained that, luckily, South Africa currently has “a few good things to talk about” at this year’s WEF to attract investor interest.

He specifically highlighted Eskom’s turnaround, reform progress at Transnet and South Africa’s credit ratings upgrade from S&P Global at the end of 2025.

This comes as Finance Minister Enoch Godongwana led a delegation of government ministers, industry leaders, and state agencies to the 2026 WEF meetings in Davos to “sell” South Africa’s reform progress.

In a press statement released on 23 January, the government explained that these meetings provided “Team South Africa” with a valuable platform to highlight the country’s recent progress in implementing reforms to unlock growth and generate much-needed employment.

“When we came here in 2025, we presented our ambitious plan for driving economic reforms, building investor confidence and mobilising private investment,” Godongwana said. 

“We returned in 2026 with concrete evidence of our progress. We returned not with promises, but with real successes.”

This concrete evidence includes the points Holdsworths highlighted, as well as South Africa’s removal from the Financial Action Task Force’s greylist and the structural reforms driven by Operation Vulindlela.

However, Holdsworth warned that South Africa’s good news is fighting for attention among major global developments.

“I think it’s going to be hard for South Africa to get a place,” he said. Despite this, he noted that there appears to be some investor interest, with South Africa’s “house” in Davos quite busy.

South Africa competing for attention

Holdsworth said investors are looking for two broad-based “themes” from South Africa when considering investment opportunities.

The first is South Africa’s turnaround story detailing the country’s reform progress over the past few years.

The second is “the old story” of South Africa being the gateway to Africa, which centres less around the country and more around the continent as a whole.

“If we’re going to see signs of African growth improving, there’s a big discussion on the free trade agreement coming up,” Holdsworth said.

“If that’s successful, then we may well get investment in South Africa because of investment in Africa.”

When asked whether South Africa is still considered the gateway to Africa from an investment perspective, Holdsworth explained that competition has increased significantly.

“There’s quite a bit of competition now in other parts of Africa, but we haven’t lost that completely,” he said. 

“We still have a very large skill base in South Africa, which can be deployed to invest in Africa. So, I wouldn’t say we’re out of it completely, but we’re no longer the monopoly.”

This marks a turning point for South Africa, which has long held the status of “gateway to Africa” due to the country’s role as a strategic hub for trade, investment, and logistics on the continent.

South Africa earned this reputation due to its developed infrastructure and financial systems compared to those of other African countries.

However, South Africa losing its monopoly over this status is not surprising given the country’s economic decline over the past few decades.

South Africa has been falling behind not only other African countries but also many of its emerging-market peers in terms of economic growth.

The country’s average annual growth rate of 1.1% over the past 15 years is significantly below the emerging market average of 4.5% over the same period. 

While South Africa is still miles ahead of some of its African peers, the country should be growing as fast, if not faster, than its peers, given its relatively advanced development.

South Africa has a highly developed and sophisticated financial services sector that can facilitate investment, significant historical infrastructure, and a young population. 

However, the country has failed to capitalise on these advantages to make its economy more productive, through various policy missteps and declining business confidence.