BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Monday, 4 February, 2002, 17:25 GMT
Investors wary of southern Africa
Zimbabwe president Robert Mugabe
The deteriorating political situation in Zimbabwe has damaged investor confidence
Investors are losing confidence in southern Africa, a report from South African research company BusinessMap suggests.

It says that outside investment into Africa as a whole has fallen in real terms since 1999.

Confidence that political and economic change can be pushed through in the region has been dented since the survey began, BusinessMap's chief executive Jenny Cargill told the BBC's World Business Report.

However, South Africa has proved to be the exception to the rule, weathering the tougher and political times better than other countries in the region.

Sliding scale

The survey ranks six countries - five members of the Southern African Development Community (SADC) plus Uganda - on a scale of nought to 100%.
Investment suitability
South Africa: 72.1%
Uganda: 70%
Tanzania: 60.3%
Zambia: 59.5%
Mozambique: 56.6%
Zimbabwe: 25.4%

The ranking weighs up the risk factors which potential investors scrutinise - political stability, transaction costs, extent of privatisation, and labour and infrastructure costs.

South Africa tops the list, while Zimbabwe, categorised as having an "unacceptable ranking of risk for investment," comes last in line.

"When we started this research more than two years ago, we found that there was a relative amount of optimism, that countries, particularly in southern Africa... would be increasing political liberalisation and economic reforms," Jenny Cargill, chief executive of BusinessMap said.

South African strikers
South Africa witnessed several strikes last year
"Political liberalisation has, as a region, taken a step back in many of the countries, and the economic reforms in some of those countries has also stalled," she added.

South African boost

It has now become even clearer that South Africa "stands apart quite significantly from other countries," she said.

In a downturn, the South African economy has proved to be more resilient, she said.

Even with a weaker rand and a series of strikes, South Africa has proved to be an attractive place to invest.

In the first three quarters of last year, South Africa brought in $1.7bn in foreign direct investment, nearly equalling the total for the whole of 2000, BusinessMap found.

In the absence of strong, local investment, South Africa remains a dominant investor in the region.

This has prompted some nervousness in the region "about South Africans taking over and controlling," she added.

Jenny Cargill, BusinessMap
"South Africa stands apart quite significantly from other countries"
See also:

28 Jan 02 | Country profiles
Country profile: Zimbabwe
21 Jan 02 | Business
Zambia bid for foreign investors
22 Jan 02 | Business
Global investment almost halves
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories