The latest data from the Centre for Risk Analysis shows local capital fleeing abroad faster than foreign money is flowing in, underscoring a deep crisis of confidence. The South African Reserve Bank confirms foreign direct investment (FDI) inflows plunged to R21 billion in the third quarter of 2025, down sharply from R73.5 billion in the previous quarter. For the Institute of Race Relations (IRR), this is more than a statistical dip – it’s proof that hostile legislation, insecure property rights and crumbling infrastructure are strangling growth and job creation.
Makone Maja, special engagements manager at IRR, said the data “proves the low investor confidence levels in the country”. Maja said of great concern to the institute was that in order to end poverty and unemployment, and even compete on the international stage with the middle-income economic peers, South Africa needed to substantially raise its foreign direct investment and domestic investments – something the country failed to achieve on all fronts. She said barriers to investment were essentially barriers to job creation.
The biggest obstacles to this much-needed growth are the hostile investor environment and legislation, which can be found in the ailing infrastructure, insecure property rights and racebased legislation. Economist Dawie Roodt said: “It is true that South Africans take more money out of the country, investing abroad. While foreigners buy bonds and equities and do not invest in the factories in the country.
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“To change that, we need to have an economy that is growing or with a growing prospect. And we don’t have that because of the wrong and outdated economic policies, because of the wrong ideological beliefs of the ANC. Corruption and incompetence also contribute.” Trade union federation Cosatu’s parliamentary coordinator, Matthew Parks, said the pace of economic growth and the high rates of unemployment were the biggest challenges.
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