SA’S FALL FROM GRACE
NEWS ANALYSIS: Why SA is no longer tops in Africa
The country is bleeding foreign direct investment because of slower growth, rising corruption and institutional decay
Thanks to its deteriorating economic prospects, SA has lost the top spot as Africa’s most attractive investment destination to fast-growing Egypt, showing just how easy it is for once-proud nations to fall behind less-industrialised but faster-reforming economies. According to Rand Merchant Bank’s latest "Where to Invest in Africa" report, Egypt displaced SA largely because SA’s growth rates have slowed markedly over the past few years, while concerns over the country’s institutional strength and governance have continued to mount. Cumulative outward foreign direct investment (FDI) from SA since 2006 now stands at an eye-watering R378bn. BNP Paribas economist Jeff Schultz estimates that the bulk of FDI outflows in the past few years have been driven by sizeable purchases by local companies of foreign counterparts, including Woolworths’ US$2.2bn purchase of Australian department store David Jones and Steinhoff’s £466m purchase of the remainder of struggling UK discount chain Poundlan...
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