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Africa’s most industrialised economy has barely grown in the past decade with fiscal missteps and corruption contributing to weak business and consumer confidence.

FILE: A worker on a car assembly line. Picture: AFP

PRETORIA – South Africa’s foreign direct investment (FDI) more than doubled in 2018 to reach its highest in five years, the central bank said on Wednesday, giving a boost to President Cyril Ramaphosa’s pledge to woo investors to help revive a struggling economy.Africa’s most industrialised economy has barely grown in the past decade with fiscal missteps and corruption contributing to weak business and consumer confidence.The South African Reserve Bank (Sarb) said in its quarterly bulletin that foreign direct investment inflows rose to R70.7 billion in 2018 from R26.8 billion the prior year.The FDI inflows were the highest since 2013, when the country recorded investments of R80.13 billion.Sarb’s balance of payments unit head Piet Swart said the higher inflows could be attributed to a more positive investor environment in 2018.However, portfolio investment inflows fell to R90 billion in 2018 from R278.8 billion the previous year, with outflows of R33.9 billion recorded in the final quarter of 2018.Ramaphosa, who has made reviving the economy a top priority since taking over from scandal-plagued Jacob Zuma in February 2018, said last year he wants $100 billion of new investments from foreign and domestic firms over the next five years.The 2018 inflows were recorded despite outflows of R8.2 billion in the last three months of 2018 as South African subsidiaries repaid short-term loans to foreign parent companies, the bank.South Africa relies heavily on foreign money to cover its large budget and current account deficits.Ramaphosa, however, faces several challenges in the quest to attract more investment, including electricity generation shortages.South Africa has experienced its worst power cuts in years this year as state utility Eskom struggles with repeated faults at its coal-fired power stations, along with low water levels at hydroelectric plants and diesel shortages.

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