Compared to other African countries, the potential attractiveness of South Africa is high; the country is among the top investment destinations on the continent. However, there has been a noticeable decline in investment flows in recent years, no thanks to protracted political tensions, land reforms and policy uncertainty. The World Bank on its part has decided to partner with South Africa to improve its business environment and enhance FDI inflows.
On Monday, March 11, an Advisory Services Agreement was signed between South Africa’s Department of Trade and Industry (dti) and the World Bank Group, a partnership aimed at improving the business environment for domestic entrepreneurs; business regulation; investment policy/ institutional reform and market regulation as well as enhancement foreign direct investment inflows.
As measured by the
According to data published by United Nations Conference on Trade and Development (UNCTAD) in the 2018 World Investment Report, FDI inflows contracted by 41
South Africa ranks 82nd out of 190 economies in the World Bank’s 2019 Doing Business report. The country has many attractive assets for investors but it suﬀers from a high crime rate, increasing social unrest, corruption, and structural issues in electricity supply and logistics. All these issues,
coupled with the recession the country slid into has had an effect on investors’ confidence as many are worried about the lack of clarity concerning policy and structural reforms.
The Advisory Services Agreement signed in partnership with the World Bank World would ensure favourable policy and structural reforms that will ensure South Africa is a favoured destination for business.
World Bank support to South Africa as signed in the Advisory Services Agreement will be provided in partnership with the Swiss State Secretariat for Economic Affairs and the Prosperity Fund of the UK’s Foreign and Commonwealth Office. The project will deploy a Country Private Sector Diagnostic, a standard World Bank Group tool to identify industry sectors that can attract significant domestic and foreign investments and deliver positive development impacts in the near term.
According to Director General at the trade and industry department, Lionel October, the department will gain insight into best practice from the partnership. “I would like to assure you that we are committed to addressing the employment deficits that we face, and this will start with providing the right environment for the private sector to flourish. The four-year programme will be led and coordinated by InvestSA,” October said.
South Africa’s President Ramaphosa’s has a target to attract $100 billion Foreign Direct Investment into South Africa within the next five years, starting this year. October stated that “Support from World Bank Group and its development partners promotes South Africa’s growth agenda. The