Pretoria – Despite South Africa's recent downgrade to "junk status" by international ratings agencies, the country is proactively meeting investors and foreign governments to promote South Africa as an attractive investment destination, Trade and Industry Minister Rob Davies said on Sunday.
In a statement, Davies welcomed the 2017 Annual Foreign Investment Confidence Index released by AT Kearney, a global management company.
"The index, titled the Glass Half Full, ranks South Africa in position 25 which is a ray of sunshine and a more realistic representation of the state and outlook of South Africa’s economic prospects and investment landscape," he said.
According to the report South Africa’s return to the index may be attributed to the short-term improvement of economic prospects and also the long-term investment potential in the country’s manufacturing sector.
South Africa returned to the index after a two-year absence. Davies said that in spite of the recent downgrades, South Africa was proactively meeting investors, foreign governments, and foreign ambassadors to promote South Africa as an attractive investment destination which was confirmed by the AT Kearney index. "Investors are convinced about the long-term investment prospects in South Africa.
With sustained and continued improvements, SA is poised to lead one of the world’s next manufacturing hubs,” Davies said.
South Africa had performed extremely well compared to other African countries after having the third highest drop in investment levels in 2015, according to The United Nations Conference on Trade and Development's (UNCTAD) World Investment Report, which estimated a 38 percent increase in investment levels for 2016.
South Africa’s return to the index was remarkable and foreign direct investment (FDI) inflows were estimated at US2.4 billion, according to the AT Kearney index.
"InvestSA on the other hand recorded an investment pipeline of investment projects at R58 billion over the 2016/2017 financial year. Multinationals are expanding their presence in SA. For example, original equipment manufacturers (OEM’s) in the automotives sector continue to invest in new five-year platforms and are embracing localisation and empowerment. Siemens has achieved a BEE level 2 status and has invested in a black industrialist company through a joint venture to manufacture transformers," Davies said.
He expressed his appreciation for such investments, saying they were welcome and provided greater impetus to the industrialisation approach adding to productive capacity and creating employment.
The quality and level of FDI inflow into the country was testament to the reforms and initiatives put in place by government to make South Africa an attractive investment destination.
The One Stop Shop (OSS) launched on March 17 was a focal point in government to shorten and simplify administrative procedures and guidelines for foreign companies wanting to invest in South Africa. It brought together key government role players dealing with issues including policy and regulation, permits and licensing, infrastructure, and finance and incentives, with a view to reducing lengthy bureaucratic procedures, reducing bottlenecks, and providing an enhanced aftercare service, he said.
The index was a product of survey results based on global CEOs’ views regarding investment potential of various economies, the statement said.
African News Agency