10 reasons to invest in South Africa (2024)

PSG Wealth Stockbroking Paarl Cecelia Square (which also has a footprint in Wellington, Langebaan, and Yzerfontein) recently had the privilege of hosting a function with the CEO of a well-known listed company as the main speaker. The topic of the presentation was “Navigating times of uncertainty,” and he shared his views on the current state of South Africa, and despite the current challenges the country is facing, he provided reasons to be optimistic and shared 10 reasons why investing in South Africa is a smart move.

1. Hot emerging market

South Africa is an emerging market that has been gaining momentum in recent years and is strategically located with abundant natural resources. The country scored well in various categories of the World Economic Forum’s Global Competitiveness Index, has an established manufacturing base, and is the second most attractive country on the African continent, according to Ernst and Young’s Africa Attractiveness Index.

2. Most diversified economy in Africa

South Africa is the leading service destination, regional manufacturing hub, and most industrialised country in Africa. The economy remains dominated by the manufacturing sector, and in recent years the finance, real estate, and business services sectors have grown to be significant contributors to gross domestic product (GDP). Small, medium, micro, and cooperative enterprises are participants in all productive value chains, with their increasing participation further enhancing economic diversification.

3. Largest presence of multi-nationals on the African continent

South Africa is the multinationals’ location of choice. Global corporates enjoy the benefits of doing business in the country, with its growing and supportive ecosystem as a hub for innovation, tech, and fintech. The country’s strategic location at the tip of Africa makes it the ideal entry point into the rest of the continent, a potential market of more than one-billion consumers.

4. Progressive constitution and independent judiciary

South Africa has a progressive constitution and an independent judiciary. It has a mature, accessible legal system, providing certainty and respect for the law. The Protection of Investment Act, 2015 came into effect in 2018 and specifically provides domestic legal protection to foreign investors in South Africa.

5. Favourable market access to global markets

South Africa has several trade agreements that provide an export platform into global markets, and the African Continental Free Trade Area will boost intra-Africa trade and create a market of more than one billion people with a GDP of $2.6 trillion that will unlock industrial development and boost intra-Africa trade.

6. Abundant natural resources

South Africa’s economy was built on the extraction of its natural resources, particularly gold and diamonds. The country remains the world’s top producer of minerals such as platinum, rhodium, chrome, manganese, and vanadium, and also has significant deposits of base metals such as iron, copper, and nickel, along with coal and natural gas. Additionally, it has abundant sunshine, which can be harnessed for solar energy.

7. Advanced financial services and banking sector

South Africa has a well-developed banking sector, including a large stock exchange and advanced bond and equity markets. The central bank oversees macro- and micro-prudential policy, and South Africa ranks well in raising finance through equities and the soundness of banks.

8. World-class infrastructure and logistics

South Africa has advanced infrastructure, including sophisticated road and rail networks and information and communications technology (ICT) infrastructure, making it an attractive investment destination for logistics, software, and other creative industries. The government has a large infrastructure development program that is focused on transport, energy, and water to increase production capacity.

9. A young talent pool

South Africa has a young population, with the majority under 35 years old, and world-class universities producing a skilled workforce. A significant number of people have completed some form of post-school qualifications, with a large pool of trainable labour and government support for skills development.

10. Excellent quality of life

South Africa offers an excellent quality of life, including a favourable cost of living, diverse culture and cuisine, and a range of leisure activities. The country has world-class facilities for hospitality, transportation, and telecommunications, with high-quality healthcare and education systems. South Africa also boasts a favourable climate for outdoor and leisure activities.

In conclusion, South Africa presents a myriad of opportunities for investors, and despite the challenges it faces, it continues to be an attractive destination.

If you’re looking for expert financial advice to navigate the intricacies of investing in South Africa, PSG Wealth Stockbroking Paarl Cecelia Square is here to assist you. Our team of experienced professionals can guide you in making informed investment decisions tailored to your goals and risk appetite.

Don’t miss out on the potential growth and returns South Africa still has to offer.