There’s a chronic need for FDI in Africa, say leading M&A and trade experts Ziyanda Ntshona and Meluleki Nzimande. They discussed the foreign investment landscape in Africa with Craig Sisterson.
A population of 1.4 billion – mainly young people, infrastructure opportunities, and governments with positive dispositions towards foreign investment are among key ingredients that offer a compelling future for businesses keen to make a difference in Africa, say Ziyanda Ntshona and Meluleki Nzimande of Webber Wentzel’s integrated Competition, Trade and Investment (CTI) Practice.
“There is a major, major need for foreign direct investment (FDI) in South Africa and the rest of the continent,” commented Nzimande, who returned to Webber Wentzel in August as a partner in the new CTI group after serving as the Chief Commissioner of South Africa’s International Trade Administration Commission.
Nzimande and Ntshona note there’s now a broad understanding that FDI is required to help boost economic growth and combat high unemployment, and Cyril Ramaphosa, South Africa’s president, has set a target of R1.2-trillion FDI over five years. “Last year we were sitting at just R1-trillion rand of FDI, so the target will be met, but it’s nowhere near enough,” said Nzimande. “But it tells you how conscious the executive is of the importance of attracting foreign direct investment to South Africa.”
Ntshona, a leading corporate/M&A expert with extensive cross-border expertise has been recognised for her work across various legal platforms. She recently met with delegates from the US embassy to discuss key areas for trade and investment on the continent.
“They had infrastructure, health, digital and auto, as well as fintech – Africa’s [exporting] a lot of fintech,” she explained. “At Webber Wentzel we’ve had quite a few transactions which feed into the R1.3-trillion that the president is targeting, across a number of sectors and so we see M&A as a tool to propel growth and investment.”
Nzimande was recently part of a panel discussion on the African Continental Free Trade Agreement (AfCFTA), and interacted with some CEOs of multinational companies. His impression is that AfCFTA is contributing favourably to the positive investor sentiment towards Africa. “AfCFTA’s stated objective is, among other things, the rapid industrialisation of Africa,” he explained. “Generally there’s a positive disposition, not only from our government but also from the continent itself, towards the importance of FDI and attracting FDI.”
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