Fixed direct investment in SA can have an outsize impact on our GDP. Data from the UN Conference on Trade & Development indicates that FDI inflows into SA have been on a downward trajectory since 2016, and in the past year alone fell 39% to a miserly R46bn in 2020.
This is heartening. SA desperately needs to embrace 5G and artificial intelligence , not just for our own sake but also as a catalyst to rejuvenate all of Southern Africa. Given SA’s strategic position — with a long coastline, many ports and a conduit to neighbouring landlocked countries — investment in digitalisation can unblock trade flows to the immense benefit of the region.
We are fortunate to have a steady roll-call of foreign companies looking to invest into SA companies. Their view of local companies differs little from the foreign view of SA as a whole. What makes the country appealing is the same as what makes a local company appealing. If one is hoping to attract a foreign buyer, or FDI, the motivation for anyone to buy a local business or invest in our country is that it is on a growth trajectory.
President Cyril Ramaphosa won the election in 2018 on a promise to revive investment through his economic reconstruction and recovery plan, setting an investment target of $100bn over five years. There have been frequent announcements since then of hundreds of billions of rand to be spent on transport and energy infrastructure. In fact, data centres such as that being developed by Vantage hold the potential to sharply reduce the amount of investment required in physical assets.
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