S.Africa falls out of global FDI rankings - CNBC Africa

S.Africa falls out of global FDI rankings

Special Report

by Trust Matsilele 0

African countries fall in the FDI Confidence Index ranking.

Two-thirds of companies plan to return to pre-financial crisis levels of foreign direct investment (FDI) by 2016, this is according to the 2015 FDI Confidence Index.

The Index’s 15th edition, Connected Risks: Investing in a Divergent World, said that business leaders are increasingly seeking global opportunities for growth.

In this year’s Index, 66 per cent of companies plan to return to their pre-financial crisis levels of foreign direct investment (FDI) by 2016, with Asian investors revealing the strongest commitment to restoring pre-recession levels.

(READ MORE: Africa still an attractive FDI investment destination)

There are no African or Middle Eastern countries ranked in the top 25 in 2015. South Africa has fallen out of the index from a position of number 13 in 2014.

The other African countries included in the survey are Algeria, Angola, Egypt, Ethiopia, Ghana, Kenya, Nigeria, Sudan and Tanzania.

“Investors desperately want to put the last financial crisis in the rearview mirror, and they are setting their sights on new destinations for their capital,” said Paul Laudicina, founder of the FDI Confidence Index and chairman of A.T. Kearney’s Global Business Policy Council.


“While market volatility and economic uncertainties may create periodic speed bumps in our interconnected world, these findings point to reinvigorated cross-border investment. With the right strategic insight and analysis, global opportunities abound for those who know where to look.”

The FDI Confidence Index offers an in-depth view of forward-looking global investment sentiment from senior executives.

Since its inception in 1998, the study has consistently pointed toward top choices globally for foreign direct investment, with FDI destinations ranked in the Index receiving the majority of global FDI inflows about a year after the survey results are released. 

The main story of the survey in 2015 is one of investor flight to safety. People are moving their capital into markets that are perceived to be more secure – like the EU and the US.

Nearly three-fourths of countries ranked in the top 25 are from developed economies, as investors see new opportunities as safe ground.

Against that, emerging markets look more difficult. African growth was substantially driven by resource investments. With lower commodity prices, investments in oil, gas and mining in emerging markets look less attractive.

The report said resource companies have diverted their investments away from new-build and into acquiring existing operations.

(READ MORE: Foreign investors undeterred by challenges facing Africa)

“They have also been negatively affected by stories out of Syria, Iraq and north East Nigeria.”