A report by the United Nations (UN) released earlier this week says while FDI to Africa rose by 5% in the first half of the year, it dropped by 43.6% in South Africa compared to the same period last year. Globally FDI tumbled by 8% due to global economic uncertainty.
South Africa is experiencing the worst labour unrest since apartheid. The UN report says FDI flows to SA fell to $1.7bn in the first six months of 2012 from $3bn in the first half of 2011.
“It reflects the situation in the main investors in South Africa (which) are developed countries,” said Astrit Sulstarova, an UN economist who helped to produce the report. This could influence future investments, she said.
The IMF forecasts South African GDP growth of 2.6% this year, cut 2013 growth forecasts to 3% from am earlier projection of 3.3%. The IMF has also trimmed its 2012 forecast for Africa to 5% from 5.4%, but raised its projection for 2013 to 5.7% from 5.3%.
FDI flows to Africa grew 5.1% to $23.1bn in the first half of 2012 after three consecutive years of decline, the UNCTAD report said. Globally, FDI inflows reached $668bn in the first half of 2012, down 8% from the same period in 2011.
