Foreign Direct Investment in SADC
The main factors that influence foreign direct investment (FDI) include market size, political stability, economic prospects, cost of production, infrastructure quality and natural resource endowment, many of which are difficult to affect through public policy. The total level of FDI in a Member State (MS) can be broken down by sector in order to take into account FDI in natural resources, in the extractive industries and in other sectors. In particular, FDI in the extractive sector is mobile in terms of location and influenced to a greater extent by the investment climate including SADC regional issues. Some MS at the lower end of international comparisons of the investment climate and indicators manage to attract FDI into extractive sectors because the availability of internationally scarce natural resources out-weighs the other investment climate factors.
SADC Foreign Direct Investment at Glance
|
Country |
FDI Stock Inward, 2009 (US$ billion) |
FDI Inflows, 2008 (US$ billion) |
FDI Inward Flow as % of GFCF |
GCF as % of GDP |
|
Angola |
16.5 |
1.679 |
109.0 |
12.4 |
|
Botswana |
0.98 |
0.109 |
7.2 |
32.4 |
|
DRC |
3.10 |
1.000 |
4.0 |
23.9 |
|
Lesotho |
1.08 |
0.218 |
9.4 |
28.2 |
|
Madagascar |
3.50 |
1.477 |
26.3 |
- |
|
Malawi |
0.82 |
0.037 |
15.4 |
26.5 |
|
Mauritius |
1.90 |
0.378 |
11.7 |
27.2 |
|
Mozambique |
4.70 |
0.587 |
32.1 |
18.5 |
|
Namibia |
4.00 |
0.535 |
25.1 |
25.7 |
|
Seychelles |
1.10 |
0.361 |
76.7 |
28.3 |
|
South Africa |
125.00 |
9.611 |
8.9 |
22.8 |
|
Swaziland |
0.81 |
0.010 |
15.8 |
16.5 |
|
Tanzania |
7.20 |
0.744 |
9.8 |
- |
|
Zambia |
9.50 |
0.938 |
26.3 |
22.2 |
|
Zimbabwe |
1.60 |
0.052 |
9.9 |
- |
Note: (-) means data not available; GFCF means Gross Fixed Capital Formation; GCF means Gross Capital Formation; and GDP means Gross Domestic Product.
FDI Flows
In 2008 the foreign direct investment (FDI) net inflow to SADC on a balance of payments basis was US$17,772 million. However, the net inflows of FDI vary from country to country as reflected in the table above.
FDI Stock Inward
In 2009 the stock of inward FDI in SADC was valued at US$182 billion. However, FDI Inward stock ranges from South Africa to Swaziland as reflected in the table above.
FDI Inward Flow as % GFCF
As a percentage of Gross Fixed Capital Formation (total investment), the FDI inward flow in the region vary from country to country as reflected in the table above.
GCF as % GDP
A comparison of the gross capital formation (formerly known as gross domestic investment) with the gross domestic product (GDP), as a measure of the significance of investment in the SADC Member States vary as shown in the table above.
Greenfield Projects
A green-field project is where the investor sets up a new facility and does not acquire an existing facility by way of merger or acquisition. In the SADC region, about 827 FDI green-field projects which vary from country to country were recorded between 2004 and the first quarter of 2009 as shown in the graph below. The graph also reflects SADC Member States’ resource requirements, plans and activities aimed at increasing FDI inflows over the five year period.