The increased interest has significant advantages if the South African authorities can balance labour regulation and economic growth. The advantages will extend to other African countries as investors begin expanding their investments. “Foreign direct investment is always good for an economy and is often a catalyst for growth,” Matlou says.
The trend is doubly important when the state of global economy is not particularly healthy and foreign investors are difficult to come by. “We are seeing a lot of investment from China throughout the African continent. Marsh in Johannesburg has seconded a dedicated employee from China to assist these clients in Africa. Mining is a capital intensive industry, so international investment is positive, especially when a lot of investors are being cautious,” says March.
However, King warns that there are several things that need to be done to ensure that South Africa is seen as an attractive destination from which investors can expand into Africa. “Unless South Africa can achieve good rates of economic growth, painful tax increases are on the way. It is important that the country puts up an open-for-business sign to foreign investors and addresses the factors that make it unattractive as an investment destination,” he concludes.