South Africa has secured record investment pledges at its latest investment conference, but official figures show that less than half of previous commitments have actually been converted into real economic activity, Reuters reported.
The sixth South Africa Investment Conference (SAIC), held in Johannesburg in late March, attracted 81 confirmed investments worth a combined 889.8 billion rand (about $54 billion). These form part of a broader five-year initiative aiming to raise 3 trillion rand by 2030.
In his weekly newsletter on Monday, President Cyril Ramaphosa described the outcome as evidence of renewed investor confidence in Africa’s most industrialised economy, despite global challenges such as rising protectionism, geopolitical tensions, particularly the Middle East conflict, and wider economic uncertainty.
However, data from the Presidency and the Department of Trade, Industry and Competition indicate that of roughly 1.5 trillion rand pledged since the first SAIC in 2018, only 634 billion rand, just under 42%, had actually entered the economy by March 2026.
While it is common for investment announcements not to fully materialise, South Africa’s conversion rate is considered low by global standards. Consultancy McKinsey estimates that 60% to 80% of announced foreign direct investments are typically realised worldwide.
The country’s economy has grown at only around 1%–2% annually for decades, far below the level needed to significantly reduce unemployment, which remains above 30%.
Growth has been constrained by policy uncertainty, long-standing corruption revealed in a 2022 inquiry, and weak energy and transport infrastructure.
Investment levels also remain subdued. Gross fixed capital formation, a key measure of spending on infrastructure, machinery and buildings, has hovered around 15%, according to Alistair Ruiters, special adviser to the president on investment promotion, speaking to Reuters.
This is below the 20%–25% range typically associated with sustained growth in emerging markets, based on World Bank and IMF benchmarks.
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Commitments from the March conference cover sectors including tourism, property, the green economy, chemicals, and especially the ICT and digital economy, which received the largest share of pledges. These include both new foreign direct investment and expansion or reinvestment plans by local and multinational firms.
Of the 415 billion rand in confirmed company-led pledges, about two-thirds came from South African-based firms, including 60 billion rand from petrochemical company Sasol, 24 billion rand from the V&A Waterfront development company, and 21.8 billion rand from telecom operator MTN.
International investors also featured prominently, including UAE logistics firm DP World, China’s Green Minerals & Metals, U.S.-based companies Visa and ride-hailing platform Uber, as well as firms from the United Kingdom, India and France.
“The green shoots are beginning to emerge,” said Ruiters. “But not enough.”
Despite government optimism, international sentiment toward South Africa has weakened due to concerns over political uncertainty, infrastructure bottlenecks, rising costs and global trade tensions. The country fell to 12th place from 7th in the 2026 Kearney FDI Confidence Index, which surveys more than 500 senior executives from multinational companies.
Reuters said President Ramaphosa has attempted to address negative perceptions by directly engaging business leaders during overseas visits to cities including New York, Kuala Lumpur, Ho Chi Minh City, Dubai, Abu Dhabi, Jakarta, São Paulo and Brasília.
Foreign investment remains essential for scaling growth and restoring confidence, with the presence of major companies such as Toyota, Uber, and Meta’s undersea cable project seen as strong signals of investor interest, according to Ruiters. “You want to have the big brands coming in.”
South African Reserve Bank data show that inward foreign direct investment has declined annually since 2022. In 2025, the country recorded a net outflow of 41.4 billion rand, meaning more capital left the country than entered.
Average annual inward FDI over the past five years, excluding 2021, when inflows surged due to Prosus acquiring about 45% of Naspers, stood at roughly 69.2 billion rand, or about 0.3% of GDP, far below levels required for sustained growth.
Ruiters, a former director-general at the trade and industry department, said ongoing reforms in electricity, logistics, water, criminal justice and local government must continue beyond President Ramaphosa’s tenure.
“CEOs come and go. Presidents come and go. But the country has to have institutions and processes that are kind of buttoned down, belted in, that continue.”
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Image Credit: officialubunturadioza
