adminGrant Thornton said on Wednesday.
Grant Thornton put South Africa ahead of Nigeria in terms of potential investment destinations.
In a report entitled “Emerging Markets Opportunity Index: High Growth Economies”, the firm said South Africa is the only African country to be ranked in the top 15 emerging economies worldwide in a list of the 27 largest emerging economies in terms of their potential for business investment.
“Although recent events in the mining sector have hurt our country’s reputation as a destination of choice for foreign direct investment, there are significant benefits that continue to attract investors,” Grant Thornton’s South Africa national chairman Deepak Nagar said.
The report includes a number of key indicators incorporating the firm’s International Business Report data with emerging market research results from the World Bank, the International Monetary Fund and the United Nations Human Development Report.
The indicators include factors economic size, population, wealth, involvement in world trade, growth prospects and levels of development.
“South Africa has climbed one place to 14th in terms of global rankings in the Emerging Economies survey, maintaining its position as the highest ranked African economy, ahead of Nigeria which climbed nine places to 17th,” reads the report.
“With Nigeria improving its ranking by nine places since the previous survey, South Africa will need to improve its competitive edge in order to maintain its leading ranking in the years to come,” Nagar added.
The only other two African countries to be ranked in the Emerging Markets Opportunity Index were Egypt (22nd) and Algeria (26th).
The survey highlighted that inflows of FDI into South Africa’s local economy have been volatile over the past decade. They peaked at US$9 billion in 2008 before the financial crisis struck, recovering to US$6 billion in 2011. Inflows over the first half of 2012 were down 44 percent compared with the same period in 2011.
Nagar said another key attraction for international investors is the country’s strategic geographic location. It acts as the gateway to Africa, a continent boasting many of the fastest growing emerging economies in the world.
The country also offers world-class Information and Communications Technology and transport infrastructure, boosted by investment ahead of the 2010 Fifa World Cup.
But Nagar urges international investors to get to grips with the regulatory complexities in South Africa because the country has a raft of rules and compliance requirements.
“Foreign companies looking to take advantage of what South Africa offers need to be aware that there are some negative administrative barriers as well as processes which lack consistency, efficiency and transparency – and which generally interfere with the operation of free markets,” he said. – Xinhua.
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