With Asia being the largest recipient of Foreign Direct Investment (FDI) flows in the world, Africa has also seen a significant growth in FDI inflows.
United Nations Investment Trends Monitor (UNCTAD) demonstrates a resilient FDI flow to developing economies. The report highlights a 3% increase in FDI flow to developing economies, with Africa having registered a modest increase of 6% in 2018 (US$40 billion, up from revised US$38 billion in 2017).
The report further tracks South Africa’s steep fall in FDI inflows since 2014, comparing it to the registered strong recovery demonstrated by South Africa, with inflows amounting to US$7.1 billion in 2018 compared to US$1.3 billion in 2017. Such was driven by large investments in mining, petroleum refining, food processing, information and communication technologies and renewable energy.
In an effort to encourage growth in FDI flows for the Sub Saharan region, the Coega Special Economic Zone (SEZ) has dedicated much of its long-term strategy to focus on investment opportunities, which will secure a firm position for Africa globally. As a result, Coega SEZ is recognized as the leading SEZ in Africa and a gateway to world markets.
The SEZ’s strategic location and adjacency to the deep water Port of Ngqura has seen it become a springboard to investors looking to explore the greater African market. “Our location is unique – it provides an opportunity for potential investors to penetrate the African market,” says Dr Ayanda Vilakazi, CDC unit head brand, marketing & communications.
This has led to the Coega SEZ becoming home to various leading Fortune 500 companies seeking access to a wider market. The CDC, currently home to 43 operational investors with an investment portfolio in excess of R7 billion boasts a number of investors playing in the African market.
“The story of First Automotive Works (FAW) SA is one we are very proud of. We celebrate the success they have had in the African market with some of their trucks proving to be customer favourites in Tanzania and the wider SADAC market,” highlights Vilakazi.
At the back of this, the Coega SEZ has also seen the latest inclusion of another Fortune 500 company seeking to penetrate the African market, BAIC SA. The investment valued at R11 billion, once operational will enhance the diverse portfolio of export orientated investors at the Coega SEZ.
Late last year, the Coega SEZ announced the recent inclusion of HELLA – a Germanbased lighting and electronics specialist. HELLA announced its intentions to embark on a strategic decision with their operations in Sub-Saharan Africa that will enable them to serve as the gateway into Africa. The R30 million investment is set to start operating out of their new facility middle of this year.