JOHANNESBURG – In an announcement that’s raised eyebrows for some, South Africa has been ranked the 13th most attractive destination in the world among foreign investors.
Global management consulting firm AT Kearney on Tuesday released its 2014 Foreign Direct Investment Confidence Index,showing South Africa had climbed two spots.
This is despite the manufacturing sector coming under pressure, the World Economic Forum placing South Africa last out of 148 countries in terms of maths and science education, and the continued damage of strikes to the economy – with the longest and costliest ever mining strike still underway on the platinum belt.
The index is based on the result of a survey sent out to senior executives from around 300 of the world’s leading corporations.
The US retained its first place position from last year followed by China and then Canada.
The study also showed that 36 percent of respondents hold a more positive view of South Africa than they did in 2012, while only 10 percent hold more negative views.
Principal at AT Kearney Cecily Carmona says South Africans shouldn’t be too surprised about the positive attention
“We were quite surprised ourselves to see South Africa in the ranking that it came out at,” she admits, “but I think it shows that sometimes, internally, we are very absorbed with the negative stories.
“But actually, large global investors think South Africa’s quite a good place to be putting their money.”
Importantly, when looking at a particular country, AT Kearney only considered responses from people outside of that country.
Speculating as to the reason for its popularity, Carmona says South Africa’s standing in Africa probably played a major role.
“If you compare ourselves to the rest of the investment destinations on the continent, we are still far and above as a hub from which to operate,” she says.
“Our liquid markets, our stable currency, our financial services market – which is ranked with some of the top across the world – and our good governance structures make us highly competitive for Africa.”
Carmona adds that the research is likely to be backed up by the actual numbers, suggesting that data due to be released soon, will show that foreign direct investment in South Africa has more than doubled since 2012.
Meanwhile, the company says the overall results pointed to positive signs for the global economy.
“Economic recovery is taking much longer than anticipated and continues to be fragile. Yet the business executives we surveyed are more optimistic about the global economy than they were a year ago, and signs of renewed confidence are increasingly evident.
“Based on this year’s index, we can affirm that foreign direct investment appears once again to be ready for take-off.”