South Africa’s lack of appeal to investors is affecting the economies of other countries in the subregion. According to the latest edition of the United Nations Conference on Trade and Development (Unctad) Global Investment Trends Monitor, FDI flows into South Africa dropped to “barely a quarter” of their 2009 levels, contributing to a 14% fall in FDI into Africa. The trend has a direct impact on the freight industry, as lower growth and investment translate into slower increase in demand for logistics services. South Africa’s IDZs, which were designed to attract investment through superior logistics, have failed to do so – due, FTW understands, to a combination of minimal incentives, the power crisis and the world recession. Driven to a peak in 2008 by the resources boom, FDI into Africa fell from US$58.6-billion in 2009 to US$50 billion in 2010, “although there are significant regional variations”. In contrast, FDI flows to developing economies rose some 10% to $525 billion in 2010, thanks to a relatively fast economic recovery and increasing South–South flows, it says. For the first time developing and transition economies “absorbed more than half of global FDI flows,” says the report. Latin America and South, East and South-East Asia experienced strong growth in FDI inflows, which declined in West Asia and Africa.
