By Tosin Sulaiman
JOHANNESBURG Oct 23 (Reuters) – Foreign direct investment
flows to South Africa tumbled 43.6 percent in the first half of
2012 compared to the same period last year, while FDI to the
continent as a whole rose by 5 percent, a United Nations report
said on Tuesday.
The decline in FDI to Africa’s biggest economy came amid an
8 percent drop in global FDI inflows due to heightened global
economic uncertainty, according to the U.N.’s Global Investment
Trends Monitor.
As South Africa battles the worst labour unrest since the
end of apartheid, the numbers suggest it will face increased
competition for investment from its faster-growing neighbours.
The report said FDI inflows to South Africa fell to $1.7
billion in the first six months of 2012 from $3 billion in the
first half of 2011, reflecting sluggish domestic economic growth
as well as a slowdown in developed economies.
“It reflects the situation in the main investors in South
Africa (which) are developed countries,” said Astrit Sulstarova,
an economist at the U.N.’s Conference on Trade and Development
(UNCTAD), which produced the report.
Slow economic growth in South Africa could also be
influencing investment decisions, Sulstarova added.
The IMF forecasts South African GDP growth of 2.6 percent
this year, and recently cut its 2013 growth forecast to 3
percent from a July projection of 3.3 percent, due to its close
links to struggling Europe.
The IMF has also trimmed its 2012 forecast for Africa to 5
percent from 5.4 percent, but raised its projection for 2013 to
5.7 percent from 5.3 percent.
Continued…
