10 Countries That Contribute The Most Foreign Direct Investment In South Africa

10 Countries That Contribute The Most Foreign Direct Investment In South Africa

South Africa remains one of Africa’s most popular destinations for foreign direct investment, with investors across the planet, including the U.S. and U.K., choosing to invest there.

Investment is key to the growth of any economy, and South African President Cyril Ramaphosa has been on a mission to increase investment into his country. He aims to attract $100 billion in foreign direct investment by 2023.

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Following a few years of decline since 2014, foreign direct investment into South Africa grew from $1.3 billion in 2017 to $7.1 billion in 2018, according to a United Nations report.

South Africa has long Africa’s No. 1 recipient of FDI since the South African Reserve Bank began keeping records after the fall of apartheid in the 1990s. The country has attracted $134.2 billion in foreign direct investment as of the end of 2017, the South African Reserve Bank reported.

Here are the 10 countries that have contributed the most foreign direct investment in South Africa since the end of apartheid (up to and including 2017).

10. Mauritius

Just beating Switzerland to the 10th spot on this list, Mauritius is one of South Africa’s biggest investors and the only fellow African nation in the top 10. The Indian Ocean island has invested around $1.55 billion in South Africa in various FDI projects over the years, according to Bloomberg.

9. Luxembourg

This particular country may be a surprise inclusion on this list, but the tiny European nation of Luxembourg has been the ninth-biggest contributor of foreign direct investment in South Africa. The country invested more than $3.65 billion in South Africa from the end of apartheid through 2017.

8. Australia

Next on the list is Australia, which contributed $4.91 billion in foreign direct investment dedicated to South Africa since the country re-entered the international business community. Mining investments have been of particular interest to many of the nations on this list, including Australia, according to CBN.

7. Japan

Japan is one of the two Asian nations that have contributed a significant amount of foreign direct investment into the South African economy, with $5.21 billion invested by the end of 2017. Some of the reasons for Japan’s consistent interest in investing in South Africa include good regulations, judicial independence, an abundance natural resources, most diversified economy in the continent and developed infrastructure, according to SANews.

6. China

A country that has been on this list for some time, and would no doubt appear on the lists of many African countries is China. China invested $6.37 billion in S.A. as at the end of 2017, and has continued to invest recently. In addition, South Africa has been China’s top African trade partner for eight years, while China has been South Africa’s biggest trade partner for nine consecutive years, with bilateral trade volumes between the two countries amounted to $39.17 billion in 2017, according to StatsSA.

foreign direct investment
British Prime Minister Theresa May meets with South African President Cyril Ramaphosa in Cape Town. Photo – AP

5. Germany

With automobile companies such as Mercedes, BMW and Volkswagen establishing manufacturing infrastructure in South Africa over the last 20 years, Germany is often seen in similar lists due to the amount of investment they make in the African country. By end 2017 they were the fifth biggest contributor with an amount of $6.87 billion, according to the South African Reserve Bank.

4. U.S.

With sectors such as mining, food processing, information and communications technologies, and renewable energy all attracting interest for investors, it is not a surprise that the U.S. has been one of South Africa’s biggest investors over the years. The U.S. is fourth on the list, with $9.14 billion dedicated to investments in South Africa, according to Businesstech.

3. Belgium

Third on this list, with a total of around $20.24 billion spent in foreign direct investment into South Africa, is Belgium. The country has been particularly active with investments in infrastructure development, skills development, energy, water and education, according to SANews.

2. The Netherlands

Historically The Netherlands has been one of the closest European allies to South Africa, and this is also reflected in their investment interests in the country. By the end of 2017 the Dutch were the second biggest investors in South Africa, contributing around $24.5 billion in investment over many years of cooperation between the countries, according to Bloomberg.

1. U.K.

This may not come as a surprise to many due to the historic ties between the two countries and the continued positive relationship they enjoy, but the U.K. has been South Africa’s biggest contributor of foreign direct investment, with $36.7 billion invested in South Africa by the end of 2017, according to Businesstech.