Foreign direct investment in SA plunged 15% to $4.6bn in 2019 and is expected to drop further this year due to the Covid-19 pandemic, according to a new global investment report by the UN.
According to the UN report, FDI flows to Africa in 2019 declined by 10% to $45bn. Increased FDI flows to some of the continent’s major economies, including Egypt, were offset by reductions in others, such as Nigeria and SA. The report highlights that the economic and investment implications of the pandemic for FDI will be further compounded by the oil glut in global markets, which is causing extremely low oil prices as well as declining commodity prices in general. A large part of FDI to Africa is resource-seeking, with 40% of all greenfield project announcements in 2019 targeting industries directly linked to natural resources.
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SA records sharp drop in foreign direct investmentDeclining inflows are a major blow as the economy was already struggling before the pandemic, but commence of the AfCTFA is seen as positive
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