R100 billion in foreign investment has been lost due to the country’s failings.
International investors have had enough of South Africa and are taking large sums of their money out of the embattled country.reports that over R100 billion in South African shares and bonds have been sold by international investors since the start of 2023.
The trend also means that foreign investors that need to make asset allocations are taking their money elsewhere – possibly to more stable markets with a higher likelihood of some level of positive returns. Major retailers are some of the heaviest hits, with Shoprite, the country’s biggest retailer, reporting that it spends the equivalent of R3 million a day to survive the power cuts. Pick n Pay also loses millions to load shedding, with its ‘permanent new reality’ being an extra R60 million spent each month to keep diesel generators running.
According to an analysis conducted by the SARB, the economy has adjusted to some extent to stages 1 and 2 load-shedding, resulting in lost gross value added of approximately R1 million per working day. Such economic turmoil does not bode well for the country’s reputation abroad. On 9 March, the international ratings from S&P Global downgraded the country’s economic outlook from positive to stable – citing load shedding.
Although being added to the greylist is not expected to cause credit rating agencies to further downgrade South Africa, it does exacerbate already-existing problems, such as load shedding, economic recession, high unemployment rates, increasing civil unrest, delayed government policy implementation, and low business confidence.
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