South Africa

Foreign investors pumping money into these South African industries

Local manufacturers have received nearly 40% of all foreign direct investment (FDI) in South Africa, followed by mining and the financial sector. 

This was revealed by PwC in its South Africa Economic Outlook, which focused on FDI flows into the country and the positive impact foreign investment has on the local economy. 

Data from the South African Reserve Bank (SARB) shows that the cumulative value of foreign liabilities – including debt instruments, equity and investment fund shares – amounted to nearly R3 trillion at the end of 2022. 

Foreign liabilities represent the value of inward foreign investment stock and refer to the liabilities or obligations of the domestic company to its international investors. 

FDI flows into South Africa have largely been positive over the past decade, which PwC noted was surprising considering the negative sentiment toward the country. 

Since 2018, the country has had six years of positive FDI flows, averaging R58 billion per annum after the global financial crisis, excluding the Covid-19-induced anomaly of 2021. 

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). 

PwC said that FDI could prove instrumental in driving business and economic development by providing the local economy with capital inflows, expansion of the business into new markets, cost reduction through economies of scale, and skills enhancement of domestic employees. 

At a macroeconomic level, FDI adds to the country’s GDP, increases employment and household income, and contributes taxes to the national fiscus. 

Manufacturing has the largest foreign investment stock at 38.5% of all liabilities.

South Africa is home to production facilities owned by some of the world’s largest producers of vehicles, food products and building materials. 

Mining and quarrying has the second-largest inward FDI stock with a 24.2% of the total which is not surprising when considering the country’s 170-year history in this industry. 

In particular, platinum mining has experienced strong investment as the country is currently the world’s largest exporter of platinum group metals.

Financial services has the third-largest stock of inward FDI, with a 20.0% share of the total. 

South Africa is home to some of the largest banks and insurance firms on the continent and relies on its globally competitive financial services industry as a positive attribute to attract FDI in other industries. 

Below is a breakdown of where FDI has been invested in the South African economy by industry.


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