South Africa Records Increased FDI Inflows In Q2

South African Reserve Bank (SARB) released its Quarterly Bulletin on Wednesday and it showed there was growth in South Africa’s FDI inflows from ZAR 11.7 Bn in Q1 to ZAR 26.3 Bn in Q2.

The increase has been attributed to foreign firms investing in domestic firms through debt and equity funding.

The Central bank report highlighted that portfolio investments declined to ZAR 9.98 Bn from ZAR 29.2 Bn. Household debt as a ratio of disposable income rose to 72.7 percent from 72.5 percent.

The Cyril Ramaphosa-led country entered the 70th month of a weakening cycle in September, this is according to the quarterly bulletin. The Southern African country has had weak investor confidence, an earlier survey by Rand Merchant Bank showed the business confidence in the Q2 remained at 28 flat unchanged from the previous quarter.

Economic think tanks, business groups, and the Reserve Bank have previously recommended the government to carry out structural reforms to boost economic growth.

The government recently released an economic policy paper with proposed reforms for public comment. Inside the paper which was drafted by National Treasury were structural reforms which were anticipated would propel the growth of the ailing economy when implemented.

Specific programs aimed at creating job opportunities were included in the policy paper which was titled, ‘Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa.’ This is after SA unemployment rate rose to 29 percent in Q2, the highest in 11 years.

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