- South Africa dropped to number 12 out of 25 developing countries in the 2026 Foreign Direct Investment Confidence Index by Kearney.
- Kearney said political uncertainty, poor infrastructure, rising costs and global trade tensions are pushing investors away from South Africa.
South Africa has fallen five places in a global ranking of countries that foreign businesses most want to invest in, dropping to number 12 out of 25 developing countries.
The ranking, published by business consulting firm Kearney on Thursday, pointed to the mining sector as a key reason for the drop.
Mining output fell 2.7% in November compared to the same time the year before. Broken transport and logistics networks hurt coal and iron ore companies, according to Stats SA.
“Domestic political uncertainty, infrastructure issues, increasing operational costs and global trade tensions have all converged to impact demand for South African minerals exports,” Kearney said, BusinessDay reported.
When investors were asked what would make them put money into South Africa, natural resources came out on top – 36% said it was the strongest reason. But confidence in other areas was much lower. Only 19% said South Africa’s technology sector was a reason to invest. Ease of doing business and clean governance each scored 22%. Skills of the workforce came in at 23%, economic performance at 24% and the quality of roads, ports and power at 25%.
The report comes days after economists questioned figures from President Cyril Ramaphosa’s recent investment conference. The conference reported 81 pledges totalling R415-billion from 22 countries, but analysts said the numbers did not add up when checked against official data.
The presidency said R1.14-trillion in investment commitments had been secured across mining, manufacturing, farming, energy and the digital economy since the first such conference in 2018. But Stats SA showed that actual new investment in the economy grew by just 1.3% in the last three months of 2025, adding only 0.2 percentage points to overall economic growth.
Kearney also warned that rising tensions in the Middle East could slow investment flows across the world.
“Capital continues to flow, but companies are becoming more selective about where they invest,” said Erik R Peterson, partner and managing director of Kearney’s Global Business Policy Council.
Pictured above: A miner.
Image source: Pexels
