Feb 16, 2013 - Business Permit, General    No Comments

SA shines as emerging economy

South Africa is the leading emerging economy on the African continent
in terms of potential investment destination, a report has found.
In its recent report, Emerging Markets Opportunity Index: High Growth
Economies, independent consulting and accounting firm Grant Thornton
said South Africa was ahead of Nigeria in terms of potential
investment destinations.
According to the results for 2012, South Africa was also the only
African country to be ranked in the top 15 emerging economies
worldwide, said the firm on Wednesday.
There were significant benefits that continued to attract investors to
South Africa despite recent events in the mining sector. “Although
recent events in the mining sector have hurt our country`s reputation
as a destination of choice for foreign direct investment (FDI), there
are significant benefits that continue to attract investors,” Grant
Thornton South Africa chairman Deepak Nagar said.
The Grant Thornton emerging markets opportunity index brings together
a number of key indicators, incorporating the firm`s International
Business Report (IBR) data with the emerging markets research from the
World Bank, International Monetary Fund (IMF) and United Nations Human
Development Report.
SA climbed one place to 14th in terms of global rankings in the
Emerging Economies survey, maintaining its position as the highest
ranked African economy, ahead of Nigeria, which climbed nine places to
17th.
Some of the indicators incorporated as indicators to rank the 27
largest emerging economies, in terms of their potential for business
investment, are population, and economy size, wealth, involvement in
world trade and levels of development.
The survey highlighted that inflows of FDI into the country`s local
economy have been volatile over the past decade. FDI peaked at
US$9billion in 2008 before the financial crisis struck, recovering to
US$6 billion in 2011. Inflows over the first half of 2012 were down
44% compared with the same period in 2011.
SA`s banking sector has long been rated among the top 10 globally and
its financial system, one of the most developed on the continent,
continues to grow. “It is a well-known fact internationally that SA`s
financial systems are sophisticated, robust and well-regulated, while
its economy boasts a world-class securities exchange.
“The government has identified massive infrastructure projects as key
to boosting the economic growth rate, as well as creating employment,
and it is spending billions of rands on getting the investment ball
rolling,” said Nagar.
Another key attraction for international investors, according to the
survey, is South Africa`s strategic geographic location, acting as the
gateway to Africa. The country also offers world-class ICT and
transport infrastructure, boosted by investment ahead of the 2010 FIFA
World Cup.
According to the report, a forecast of 2013 revealed that 71% of local
businesses expect an increase in revenue over the next 12 months.
In terms of international expansion by SA business owners, 80% of
South African businesses are looking at other parts of Africa for
investment.
However, since Nigeria improved its ranking by nine places since the
last survey, South Africa will need to improve its competitive edge
“in order to maintain its leading ranking in the years to come”.
When looking at other countries ranked in the survey, mainland China
remains way out in front at the head of the emerging economies index,
by virtue of its strong economic growth rates and large consumer
market.  India ranked in second place.
Egypt (which came 22nd) and Algeria (which came 26th) were the only
other two African countries ranked in the index.
The IBR is a survey of both listed and privately held businesses. The
data for this release are drawn from interviews conducted between May
and September 2012 with over 6000 businesses from all industry sectors.

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