World Economy

South Africa Failing to Attract FDI

South Africa Failing to Attract FDI South Africa Failing to Attract FDI

South Africa’s economy is expected to improve by the end of the current financial year despite challenges the country faces, a South African economic expert said.

Vusi Khumalo, CEO of South African Chamber of Commerce and Industry, told Xinhua that the country is facing challenges which need to be addressed.

This comes after the International Monetary Fund released a report which predicted that the country’s economic growth would be 0.1% this year.

In January 2016, the IMF had predicted a 0.6% economic growth. Commenting on the latest report, Khumalo said the country’s economic growth could reach 1% at the end of the financial year.

“We are failing to attract much foreign direct investment into the country. The socio-political scenario needs to be improved since it is jittery currently. We need to address an issue which scares investors and those who want to visit the country like the visa issues,” he said.

Khumalo said that as the country is to hold local government elections on August 3, there is some instability which reduces investor confidence.

He said that hopefully after elections, the political volatility would die down and investors would be attracted into the country.

“It’s not all doom and gloom. There are initiatives in place which are encouraging like the infrastructural developments in the country. The treasury is also doing a good job to bring about fiscal discipline. Long-term energy issues are in place to address the electricity shortages and the nuclear will boost the confidence in the energy sector,” Khumalo said.

He said the government should address the triple challenges of unemployment, poverty and inequality.

In a statement the treasury confirmed that the IMF met stakeholders to collect economic and financial information before issuing the report. The treasury however said they are more positive than the IMF.

“In the immediate term, we expect growth and employment to be supported by several structural reforms and targeted government interventions as guided by the National Development Plan and the nine-point plan,” the statement said.