Big win for South Africa

South Africa has jumped into the top ten on an index measuring global investor sentiment among emerging markets as the country’s mineral wealth continues to attract investors.

Kearney’s Global Business Policy Council released its 2025 Foreign Direct Investment (FDI) Confidence Index on 9 April.

This index is based on a survey of investor sentiment regarding future FDI flows. 

Now in its 27th year, the 2025 Index captured a distinct snapshot of investor sentiments at a moment of global inflexion. 

“Though there have been profound developments since the survey was in the field in January, key findings remain illuminating,” the company said.

In particular, their findings highlighted the value that investors place on the efficiency of legal and regulatory processes, domestic economic performance, and technological and innovation capabilities.

Developed markets make up 19 of the top 25 global markets, with 11 of these markets based in Europe.

In the survey’s history, dating back to 1998, developed markets have traditionally performed well in times of heightened uncertainty in the external operating environment. 

“While investor sentiment was captured before the sharp escalation of trade tensions in early April, results point to heightened investor concern over global instability, with commodity price increases and rising geopolitical tensions topping the list of anticipated developments,” it said.

This marks the third year in a row that the FDI Confidence Index features an exclusive ranking for emerging markets. 

China, the United Arab Emirates, and Saudi Arabia lead the 2025 emerging market rankings. 

However, South Africa was also a standout performer, having jumped into the top 10 on the index, climbing four places to 7th in 2025’s ranking.  

The report said South Africa has taken a significant step forward in global investor sentiment.

Kearney’s Managing Partner for Africa, Theo Sibiya, attributed this strong performance to a range of factors, including the country’s rich natural resources, resilient economic fundamentals, energy reforms, emerging opportunities in green energy and infrastructure investment.

“South Africa remains one of the world’s most resource-rich nations, with annual mineral production valued at $124 billion,” he said. 

“It holds extensive reserves of gold, coal, diamonds, iron ore, manganese, and platinum group metals.” 

“This mineral wealth continues to be the strongest magnet for investors, with 31% of investors citing this as a top strength for the market.” 

Economic growth

Even beyond the country’s resources, economic performance has also emerged as a key driver of investor confidence in South Africa, with 30% of investors citing this factor as a strength. 

The country’s GDP growth is forecast to improve from 0.6% in 2024 to 1.5% in 2025 and reach 1.7% by 2027.

The report said this growth will be buoyed by structural reforms aimed at stabilising electricity supply, addressing logistics inefficiencies, and revitalizing the country’s state-owned enterprises. 

It added that South Africa’s FDI inflows are becoming increasingly geographically diversified, with strong interest from Middle Eastern (UAE, Saudi Arabia), African, and Asian (China, India) investors. 

“This broadening of the investor base reflects sectoral growth in financial services, manufacturing, mining, retail, and green energy,” it said. 

“Encouragingly, there is growing momentum in the green energy sector, a reflection of both investor appetite and policy shifts.”

Sibiya pointed out that, in 2024 alone, three major energy producers announced green hydrogen projects with a combined investment of $7.1 billion. 

“This marks a turning point, signalling the country’s potential to become a renewable energy hub for Africa, supported by its natural endowments and evolving energy policy,” he said.  

The top ten of Kearney’s 2025 Emerging Market Index can be seen in the table below.