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Foreign investment into SA tumbles $1.4 billion

by , 27 June 2013

Last year saw a drop in foreign investment when compared to the previous year, according to a report by the United Nations. In spite of developing nations receiving more than developed nations in foreign investment, South Africa was worse off when compared to 2011…

South Africa’s inflows of foreign direct investment (FDI) “fell to $4.6 billion [R46.46 billion] in 2012 from $6 billion [R60.6 billion] in 2011, the 2013 United Nations Conference on Trade and Development’s (Unctad) world investment report showed” yesterday, reports BDLive.

Unctad “defines FDI as a lasting interest in an enterprise in a foreign economy,” reports Bloomberg.

The main reason for the decline was a result of “net divestments in the fourth quarter of 2012 that resulted from a foreign mining company’s offloading of its stake in a South African subsidiary,” adds BDLive.

South Africa’s FDI falls 24% year on year

The 24% year-on-year decrease shouldn’t be cause for concern, it “was above the pre-recession average of $3.9 billion (R39.39 billion) a year,” reports MoneyWeb.

SA was the “third-largest recipient of FDI inflows in 2012, after Nigeria and Mozambique,” in Africa reports Fin24. It “represented 9.1% of Africa's total inflows in 2012”.

Nigeria is attracting “a lot of inflows” due to its “extractive industries, natural industries and the oil industry," Jorge Maid, the Industrial Development Corporation’s head of research said, adds Fin24. Mozambique is “attracting investment into its natural resources”.

“Maia said South Africa's performance was good in a year that most citizens viewed as difficult one,” adds MoneyWeb.

Developing countries attracted 52% of “investors’ funds in 2012,” reports Bloomberg “compared with 45% the year before”. Globally, FDI dropped “18% last year to $1.35 trillion” and “is forecast to be around the same level in 2013”.

With 2013 expected to be similar to last year, improvements will coincide with improved sentiment and economic conditions.

Foreign investment into SA tumbles $1.4 billion
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