Investing in South Africa The survey highlighted that inflows of FDI into SA’s local economy have been volatile over the past decade. They peaked at US$9bn in 2008 before the financial crisis struck, recovering to US$6bn in 2011. Inflows over the first half of 2012 were down 44% compared with the same period in 2011. SA’s banking sector has long been rated among the top 10 globally and its financial system, one of the most developed in Africa, continues to grow. The Johannesburg Stock Exchange (JSE) is the largest securities exchange on the continent and ranks among the top 20 exchanges in the world in terms of market capitalisation. South Africa’s exchange control landscape is virtually non-existent so the ease of funds introduced and remitted is extremely comforting for foreign investors. “It is a well-known fact internationally that SA’s financial systems are sophisticated, robust and well-regulated while its economy boasts a world-class securities exchange,” adds Nagar. “The government has identified massive infrastructure projects as key to boosting the economic growth rate, as well as creating employment, and it is spending billions of rand on getting the investment ball rolling.” Another key attraction for international investors is the country’s strategic geographic location. It acts as the gateway to Africa, a continent boasting many of the fastest growing emerging economies in the world. The country also offers world-class ICT and transport infrastructure, boosted by investment ahead of the 2010 FIFA World Cup. But Nagar urges international investors to get to grips with the regulatory complexities in SA because the country has a host of rules and compliance requirements. “Foreign companies looking to take advantage of what South Africa offers need to be aware that there are some negative administrative barriers as well as processes which lack consistency, efficiency and transparency – and which generally interfere with the operation of free markets,” he says.
Posted on: Thu, 13 Jun 2013 10:34:05 +0000
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