The resumption of FDI is mainly due to the increase in capital injections made by foreign companies already present in the most industrialized country on the continent.
Foreign direct investment (FDI) flows to South Africa reached 27.2 billion rand ($1.7 billion) in the first quarter of 2022 compared to 22.7 billion rand in the fourth quarter of 2021. Which represents a rise of 26.2% quarter-on-quarter, according to data released on Tuesday, June 28 by the country’s Central Bank.
The institution also specified, in its quarterly bulletin, that this increase is mainly due to the increase in capital investments and loans granted by foreign companies already present in South Africa to their subsidiaries.
Portfolio investment also recovered markedly in the first quarter of the current year, to stand at 64.2 billion rand, after revised outflows of 40 billion rand in the previous quarter, thanks in particular to the acquisition of shares and debt securities by non-resident investors, according to the South African Reserve Bank.
Traditionally, European countries (UK, Netherlands, Belgium, Germany and Luxembourg) are the most active investors in South Africa, alongside the US, Japan, China and Australia. Most investments are directed to the financial, mining, industrial, transport and retail sectors.