President Cyril Ramaphosa's aggressive efforts to boost the country's stagnant economic growth are yielding results, according to figures released by the South African Reserve Bank (Sarb).
In the Quarterly Bulletin
released on Wednesday, the Sarb said inward direct investment increased from only R26.8bn in 2017 to R70.7bn in 2018.
South Africa’s direct investment liabilities, however, reverted from an inflow of R28.7bn in the third quarter of 2018 to an outflow of R8.2bn in the fourth quarter.
This, the report said, was due to the repayment of short-term loans by South African subsidiaries to foreign parent companies.
President Ramaphosa in October last year hosted the inaugural South Africa Investment Conference. During the conference, businesses pledged nearly R290 billion worth of investment announcements over the next five years.
The investments were a culmination of a six-month investment drive by the four envoys tasked with globetrotting in search of over R1.2trn worth of investments over the next five years.
Former Finance Minister Trevor Manuel, former Deputy Finance Minister Mcebisi Jonas, businesswoman Phumzile Langeni as well as retired banker, Jacko Maree, form part of the team of envoys searching for investors with deep pockets. Presidential economic advisor Trudi Makhaya is also part of the team.
The Sarb bulletin also highlights that portfolio investment liabilities reverted from an inflow of R17.9bn in the third quarter of 2018 to an outflow of R33.9bn in the fourth quarter, as non-residents disposed of both equity and debt securities.
“Non-residents’ net sales of domestic equities of R15.7bn in the fourth quarter followed net sales of R7.4bn in the third quarter, while their net purchases of debt securities of R25.3bn in the third quarter reverted to net sales of R18.2bn in the fourth quarter.
“Non-residents’ net purchases of domestic equity and debt securities of R90bn in 2018 were significantly less than the R279bn in 2017,” said the report.
Other investment liabilities changed from an outflow of R8.7bn in the third quarter of 2018 to a marked inflow of R113bn in the fourth quarter. The sharp reversal, the bulletin said, could be attributed to non-residents extending loans to the domestic banking sector as well as an increase in rand-denominated deposits and, to a lesser extent, foreign currency-denominated deposits with the domestic banking sector.
“Other investment liability inflows nearly doubled from R61.4bn in 2017 to R119bn in 2018,” the Sarb said.