• Africa is among the fastest growing regions in the world and strengthened engagement presents major growth opportunities for trade and investment by South African firms, as well as firms that want to use the country as a gateway to the continent.
• According to the recently released Africa Investment Report 2015 compiled by fDiIntelligence “FDI into Africa [in 2014] increased by 64% to US$87 billion [which represents] 660 projects.” This amounts to 13% of global FDI which has increased from 0.6% in 2000. The 464 multinational companies which have invested in the continent are saying without equivocation that Africa is open for business and is a safe and reliable investment destination.
• The most attractive sectors for investors are: financial services with 133 projects; the coal, oil & natural gas sector with 25 projects and a combined capital investment value of US$33 billion; the real estate sector with 23 projects and a capital investment of US$12 billion; the industrial machinery sector with 33 projects. The auto components sector reflected an improved performance of 133% while the value of projects in the business machines as well as software & IT services sectors increased by 378% and 72%, respectively; FDI projects in the chemicals sector amounted to US$7 billion indicating an increase of almost 2000% from 2013; and the alternative & renewable energy sector saw US$10 billion being invested across the continent. This is supported by the WEF Africa Competitiveness Report as well as the EY Africa Attractiveness Survey 2015.
• South Africa’s foreign direct investment into and trade with the SADC region has grown more rapidly in recent years than any other. SADC currently absorbs 26% of our exports – more than any other region. Unlike exports to other regions, exports to SADC are dominated by manufactured goods.
• South Africa is already a major and growing source of FDI on the continent, accounting for 53% of FDI into Southern Africa in 2014 (UNCTAD 2015). Outward investments are especially encouraged where these crowd in South African value-chains, expertise and financial resources.
• Future growth of the continent will be supported by a number of on-going initiatives that will address existing challenges to doing business in the region.
• Efforts towards market integration through SADC, and the Tripartite Free Trade Area will address the challenges of small and fragmented markets in the region. The Tripartite Free Trade Area is expected to create a market of US$2.6 trillion, with a combined population of over 600 million.
• South Africa is also working with SADC to support regional value chains to enhance the region’s competitiveness and promote inclusive growth and development in the region. In April 2015, SADC heads of states approved the SADC Industrialisation Strategy and Roadmap.
• South Africa is championing infrastructure development in Africa through the continental north-south rail and road links, as part of the New Partnership for Africa’s Development.
• In order to fast-track key projects, South Africa has recently introduced a Project Preparation and Development Facility for the SADC, managed by the Development Bank of Southern Africa.