1 . 3 : C o m p e t i t i v e n e s s a n d I n v e s t m e n t C l i m a t e i n S A N E E c o n o m i e s
Table 1: The relative importance of SANE economies
2006 or most recent year (unless otherwise specified)
SANE ECONOMIESREST OF AFRICA
1.Area (thousand km
)1,2212,3829241,0015,52810,32414,45530,3072. Population (millions)483313475291284349924Share of Africa (percent)541583231381003. Nominal GDP (US$ billions)262128120104613953851,093Share of Africa (percent)24121110569351004. GDP (US$ billions PPP)6052561863271,3733269052,605Share of Africa (percent)23107135313351005. Annual GDP growth rate 1997–2006 (percent)344543546. Investment ratio (gross capital formation, percent of GDP)19312018212120217. Gross national savings (percent of GDP)13563620281726238. Foreign reserves (US$ billions)2382492317615122314Share of Africa (percent)726167565391009. Trade balance (US$ billions)44033–11572177210. Current account balance (US$ billions)1431192383243511. Share of African exports (percent)16161655264210012. Share of African imports (percent)23810105094110013. Export growth 1997–2006 (percent)45310456514. Import growth 1997–2006 (percent)71267657915. FDI (US$ millions)6,3791,0813,4035,37616,2393,45910,97130,669Share of Africa (percent)2141118531136100
Source: Oshikoya, 2007.
Table 2: Economic indicators for the SANE and BRICeconomies (2005)
NominalGDP perPopulationGDP (US$capitaFDI (US$Economies(millions)billions)(US$)millions)
SANE total29053410,17816,239SANE average per capita income1,841
BRIC total2,7294,55512,080108,270BRIC average per capita income1,669
Source: FDI data are from
, http://stats.unctad.org/FDI. Therest of the data are from IMF
World Outlook Database
, September 2006.
The indicators that have often been found to bepositively correlated with FDI in Africa are economicopenness,especially to international trade;the quality of institutions and physical infrastructure in the host econ-omy;and economic growth and macroeconomic stabili-ty.Although the SANE economies have a competitiveadvantage over the other African countries in theseindicators,natural resources—especially hydrocarbonand minerals—have influenced the flow of FDI intotheir economies.In the case of South Africa,an addedmotivation for FDI is the size of its local economy (it isthe largest in Africa),which is seen by many investors tobe pivotal for regional production and trade.The creationof a functioning free trade area is likely to provide theeconomies of scale needed for profitable production,andthus should encourage more direct investment in theregion.Another key location-specific determinant of FDI in South Africa is its superior infrastructure,bothphysical and financial.Africa’s competitiveness could be enhanced by theproductivity of the SANE economies,which in turn isdetermined by the productivity of their firms.Morethan two-thirds of the largest 1,000 African companiesare in the SANE economies.Thirty of the largest 50African banks are in the SANE economies.A few of these companies are beginning to tap into the muchlarger African markets.Therefore SANE economies have