JOHANNESBURG, Jan 26 (Reuters) – South Africa’s embattled mining industry could be first in line to benefit from a boost in foreign direct investment (FDI) if the new leader of the ruling party Cyril Ramaphosa implements measures seen as vital to draw in more cash, analysts said.
The governing African National Congress (ANC) needs to water down black ownership targets in mining, roll out mobile broadband access and cut red tape in the labour market to revive investor interest, they say.
South Africa has failed in recent years to attract significant direct investment due to slow economic growth, policy uncertainty and higher labour costs.
South Africa recorded FDI inflows of $2.3 billion in 2016 against outflows of $3.4 billion, U.N. trade and development agency UNCTAD data show. A decade ago, it had average annual inflows of $4.5 billion against outflows of $3.3 billion.
The agency said on Monday South Africa’s FDI “still remained low by historical standards” in 2017 at $3.2 billion. Ramaphosa, South Africa’s vice president who succeeded President Jacob Zuma as head of the ANC in December, has promised to deliver economic policy change.
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