Story highlights
Last year, South African equities worth $8.3 billion were sold, marking a record-long streak of decreasing foreign interest.
Foreign investors have continued their exodus from South African stocks, marking the eighth consecutive year of outflows, with a total of over $50 billion leaving the market.
This is based on a Bloomberg report.
Last year, South African equities worth $8.3 billion were sold, marking a record-long streak of decreasing foreign interest.
The past decade has proven challenging for emerging markets, reflected in Morgan Stanley Capital International's benchmark index gaining just over 3 per cent.
However, the Johannesburg benchmark index faced a loss of nearly 6 per cent in dollar terms, compounded by a 42 per cent depreciation of the rand against other currencies of developing nations.
Foreign investors' apprehensions about South Africa stem from a series of challenges, including corruption scandals, an energy crisis linked to the debt-ridden Eskom Holdings utility, and turmoil at Transnet SOC, the state-run rail and ports operator.
Bloomberg cited Ashish Chugh, a portfolio manager at Loomis, who pointed to these factors as contributors to foreign investors' wariness.
High levels of unemployment and public debt further complicatethe challenges, especially as the nation approaches what is expected to be its most competitive election since the establishment of democracy in 1994.
However, Chugh also noted the potential for improved investor sentiment if the winning party implements robust reforms and policies to address investor concerns.
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Story highlights. Last year, South African equities worth $8.3 billion were sold, marking a record-long streak of decreasing foreign interest. Foreign investors have continued their exodus from South African stocks, marking the eighth consecutive year of outflows, with a total of over $50 billion leaving the market.
What is the foreign investment level in South Africa? ›
According to the South African Reserve Bank, the country recorded foreign direct investment inflows of ZAR 53.8 billion (around USD 2.8 billion) in the second quarter of 2023, up from inflows of ZAR 0.5 billion in the first quarter. In the third quarter, FDI stood at ZAR 26 billion.
Which country invests the most in South Africa? ›
Investment from the United Kingdom outstrips investment from all other countries and accounts for three-quarters of the total (Figure 5.3). The United States and Asian countries complete the list of investors in South Africa.
Why not invest in South Africa? ›
Businesses are not interested in investing in South Africa's weak economy, which is plagued by structural issues such as load-shedding and logistics backlogs.
What is the net international investment position in South Africa? ›
South Africa Net International Investment Position reached 101.892 USD bn in Sep 2023, compared with 113.031 USD bn in the previous quarter.
Why has the foreign direct investment in South Africa been so low? ›
According to Arvanitis (2006) , the low FDI inflows were partly due to the apartheid political environment, the financial and trade sanctions imposed on the country as well as the inability to pay external creditors which led the country to the road of suspension on the international capital market.
What is the foreign direct investment trend in South Africa? ›
South Africa foreign direct investment for 2022 was $8.80B, a 78.68% decline from 2021. South Africa foreign direct investment for 2021 was $41.30B, a 1209.51% increase from 2020. South Africa foreign direct investment for 2020 was $3.15B, a 38.36% decline from 2019.
Where does South Africa make most of its money? ›
mining (world's largest producer of platinum group metals, gold, chromium), automobile manufacturing, metalworking, technology, machinery, textiles, iron and steel, IT, chemicals, fertiliser, foodstuffs, manufacturing, commercial ship repair.
Who is the biggest investor in South Africa? ›
Ninety-One has maintained its crown as South Africa's largest asset manager. According to Alexander Forbes' latest Survey of Retirement Fund Investment Managers, Ninety One, F.K.A Investec Asset Management's assets increased 6% to R823 billion.
Who is Africa's biggest investor? ›
Leading countries for FDI in Africa 2014-2018, by investor country. Between 2014 and 2018, 16 percent of FDI into Africa originated from China. Chinese direct investment on the African continent represented the main source of FDI, whereas the United States and France held eight percent of the total FDI, respectively.
Increasingly severe domestic constraints, alongside slowing global demand, led to GDP growth falling to just 0.6% in 2023, from 1.9% in 2022. Mining production contracted while manufacturing production edged higher, as load shedding and transport bottlenecks intensified.
Is South Africa in economic trouble? ›
StatsSA confirmed that South Africa barely skirted a technical recession. At 0.1% growth in the fourth quarter of 2023, our economy is at a standstill, and South Africans are becoming poorer.
Why is South Africa in so much debt? ›
South Africans Living Beyond Their Means
Financial literacy is a major stumbling block in promoting better savings behaviour, and with South Africans being poor savers due to lower disposable incomes, household debt levels increase at levels which, over time, become more difficult to manage.
What is the maximum amount a South African citizen can currently invest overseas? ›
Existing Coronation offshore investors can use their Name and Surname as reference. As a resident South African taxpayer, the South African Reserve Bank permits you to externalise up to R11 million of funds per calendar year as direct offshore investments in foreign currency denominated assets.
Is South Africa a low income country World Bank? ›
It is estimated that almost 63 percent of the population is living below the upper-middle- income poverty line, around 1.8 million more poor people relative to the pre-pandemic period.
How are foreign investments taxed in South Africa? ›
Most foreign dividends received by individuals from foreign companies (shareholding of less than 10% in the foreign company) are taxable at a maximum effective rate of 20%. No deductions are allowed for expenditure to produce foreign dividends.
Is South Africa open to foreign investment? ›
The GoSA is relatively open to foreign investment to drive economic growth, improve international competitiveness, and access foreign markets. The Department of Trade and Industry and Competition's (DTIC) Trade and Investment South Africa (TISA) division assists foreign investors.
What is the percentage of investment in South Africa? ›
South Africa Investment accounted for 14.3 % of its Nominal GDP in Dec 2023, compared with a ratio of 16.1 % in the previous quarter.
Are foreigners allowed to invest in South Africa? ›
Legal Compliance
Foreigners can purchase property in South Africa if they comply with the legal requirements set out in the Immigration Act, the Foreign Investment Act, and other relevant legislation.
What percentage of GDP is FDI in South Africa? ›
For that indicator, we provide data for South Africa from 1970 to 2022. The average value for South Africa during that period was 0.96 percent with a minimum of -0.77 percent in 1979 and a maximum of 9.68 percent in 2021. The latest value from 2022 is 2.27 percent.
