Global executives more positive about investing in South Africa

The country has climbed steadily among emerging markets in a survey that tests foreign direct investment confidence, with reforms at Eskom and Transnet part of the reason for its improvement.

- By Kara le Roux

South Africa has entered rarely seen territory. For the first time, it has cracked the top 10 in the category "emerging markets" in management consulting firm Kearney's Foreign Direct Investment (FDI) Confidence Index, jumping from 17th place in 2023 to seventh place this year.

The annual ranking, based on a survey of global executives, gauges how attractive different countries or regions are for foreign investment over the next three years.

Erik Peterson, managing director of Kearney's global business policy council, said the firm included the "emerging market" rankings in its index to "provide some additional insights regarding investor preferences in developed economies".

"Investors have been and continue to be particularly attuned to efficiency of legal and regulatory processes and domestic economic performance as they choose where and how to invest," said Peterson about investor sentiment.

Kearney Africa managing partner Theo Sibiya said it was good to receive some positive news about South Africa. "You will recall that in 2023 we were in 17th position, we steadily moved up to 11th position and now we're in 7th position, which is fantastic progress for us."

Peterson said this year's report introduced something new in that respondents were asked why they planned to invest in particular markets. "This helps us to illuminate the perceived strengths of each individual market," he said.

Lights on, confidence up

One of the bigger changes driving investor optimism in South Africa is a development that would have seemed improbable just a year ago: the lights have stayed on.

"The inconsistent power supply was a huge challenge in terms of influencing investors and them putting capital into the country to take advantage of opportunities," said Sibiya.