- Global foreign direct investment (FDI) flows recovered to US$1.58 trillion in 2021, up from US$963 billion recorded in 2020 and higher than pre-pandemic levels of US$1.48 trillion recorded in 2019 according to UNCTAD’s latest World Investment Report 2022
- South Africa was the top recipient of African-destined FDI as measured by number of projects over the period 2012 – 2021, attracting close-on 18% of all global Africa-destined FDI projects
- The Western Cape remains a key inward destination for FDI into South Africa, accounting for close-on 21% of all inward projects, and approximately 11% of all inward capex over the period 2012 – 2021
The Western Cape has remained a key inward destination for Foreign Direct Investment (FDI) into South Africa, accounting for close-on 21% of all inward projects, and approximately 11% of all inward capex over the period 2012 – 2021.
With one of the most advanced, broad-based economies on the African continent, South Africa was the top recipient of African-destined FDI as measured by the number of projects over the period 2012 – 2021, attracting close-on 18% of all global Africa-destined FDI projects according to FDI Markets data. The data also highlighted communications and renewable energy as key inward investment sectors into South Africa during this period. These two sectors were the recipient of close-on 25% and 20% respectively of all inward FDI into South Africa, as measured by capex.
According to Janine Botha, Head of Wesgro's Research unit, communications and business services sectors were the top two sectors for inward FDI into the Western Cape over this ten-year period, accounting for 44% and 14% respectively of all inward FDI (as measured by capex) – with ICT & Internet infrastructure, and business services dominating business activities.
The province also fares well on a number of investment fronts on the African continent, ranking in the top 3 destinations for inward FDI into Africa’s business services sector, jostling with Gauteng and Casablanca-Settat for first place.
From a source perspective, Western Europe and North America were the dominant source regions for inward FDI into the province from 2012 – 2021, with the US and the United Kingdom being the dominant inward source markets both in terms of FDI capex and number of projects. In terms of renewable energy, the Western Cape was the third largest destination in South Africa for inward FDI into Africa’s renewable energy sector over the ten-year period.
Importantly, the Western Cape is also recognized as a springboard for local and regional FDI, with a number of Western Cape-based companies using the province as a launch pad into Africa. To this end, Nigeria was the top African destination market for outward FDI by Western Cape-based companies (both in terms of capex and projects) over the period under review, with Mozambique in a close second position when measured by capex, and Kenya in third place.
As the African Continental Free Trade Area (AfCFTA) gains momentum, an increase in both intraregional and foreign investments into Africa is anticipated as investors take advantage of the single continental market of 1.2 billion people with a combined gross domestic product of US$3.4 trillion.
Wesgro CEO, Wrenelle Stander, commented: “These strong FDI inflows are testimony to the Western Cape’s offerings and future orientation. As we come out of the global pandemic and look to the future, never before has the need to be recognised as a globally competitive investment destination been more critical. In order to successfully tap into global investment flows, Wesgro is committed to positioning the Western Cape as a leading regional economy globally”.
“As a City government, we have worked hard to forge a strong foundation for economic development and investment and are committed to making Cape Town the easiest place to do businesses. Our view of economic growth is simultaneously broad and sectoral. Targeted development interventions of specific industries, such as green energy, boat-building and call centres, means that our Investment Facilitation Branch, which is tasked with helping firms large and small to land and expand in the metro, can confidently engage with companies and show them why Cape Town is the ideal destination for their business,” said Alderman James Vos, the City of Cape Town’s Mayoral Committee Member for Economic Growth.
Western Cape Minister of Finance and Economic Opportunities, Mireille Wenger, concluded: “Attracting investment is key to creating jobs in the Western Cape. Which is why I am so pleased with the impact and investments landed through the Western Cape Government’s official tourism, trade and investment promotion agency, Wesgro. We really do have so much to offer, especially in terms of investment support and facilitation services which is partly why we have been able to attract the impressive amount of investments noted by the agency. When I was sworn in as Minister of this portfolio, I made clear that I would be on the job to create jobs in the province. To do this, our government must double down on our efforts to create an enabling environment that attracts investment and helps the private sector succeed. That is precisely what I intend to do, with passion and determination.”