South African President Cyril Ramaphosa make a speech at the official funeral service of the later former Zimbabwean president Robert Mugabe on September 14, 2019 at National Sports Stadium in Harare. South Africa’s President Cyril Ramaphosa was jeered and whistled during his speech before he apologised for recent xenophobic attacks in his home country. At least 12 people have been killed this month in a surge in violence and mob attacks against foreign-owned businesses in and around Johannesburg, South Africa’s largest city.TONY KARUMBA / AFP
Zenith Bank BetaLife
Zenith Bank BetaLife
Zenith Bank BetaLife
Zenith Bank BetaLife

South Africa saw a dip in foreign direct investment in 2019 compared to the previous year, with inflows falling to 66.8 billion rand ($3.78 billion) from 72.1 billion rand, the central bank said on Tuesday.

A key part of President Cyril Ramaphosa’s plan to revive growth in Africa’s most developed economy hinges on luring foreign capital, but prolonged power outages caused confidence among investors to wane along with industrial activity.

The sharp jump in local coronavirus infections, which saw Ramaphosa announce a nationwide lockdown for 21 days starting on Thursday, is set to pile further pressure on an economy already in recession and suffering intense financial market volatility.

The South African Reserve Bank (SARB) said in its quarterly bulletin nationwide blackouts by state power firm Eskom since the beginning of 2020 had triggered broad-based economic weakness, while the impact of the coronavirus outbreak was also beginning to tell as global risk aversion spiked.

Inflows of portfolio investments, which involves the trade currencies, bonds and stocks, shrank dramatically on a quarterly basis, to 9.3 billion rand in the final quarter of 2019 from 40.2 billion rand in the previous one.

Since the beginning of February, as coronavirus infections climbed, the rand plunged more than 10%, bond yields rose to all-time highs, while around 4.5 trillion rand exited the Johannesburg Stock Exchange.

The bank’s figures in the quarterly bulletin showed equity outflows of nearly 63 billion rand in 2019, with sales of 33 billion rand in the fourth quarter and 32 billion in the third.

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