South Africa recorded a sharp increase in foreign direct investment inflows in the second quarter of 2026, with investment more than doubling from the previous three months, according to the South African Reserve Bank.
FDI inflows reached 49.8 billion rand ($3.03 billion) in the April to June period, up from 20.3 billion rand ($1.24 billion) in the first quarter. The second-quarter figure was the highest since the second quarter of 2023.
The increase was largely driven by debt funding received by an unnamed South African telecommunications company from its foreign parent, according to the central bank data.
The latest figures point to a significant improvement in direct investment flows during the quarter, although the concentration of the inflow in a single corporate transaction means the increase does not necessarily represent a broad-based recovery in foreign investment.
FDI differs from portfolio investment because it generally involves longer-term investment in businesses and productive assets, rather than purchases of financial securities.
South Africa has been seeking to attract greater foreign investment as it works to improve economic growth, infrastructure and industrial capacity.
The country has faced persistent challenges including unreliable electricity supplies, logistical constraints, high unemployment and weak economic growth, which have weighed on investor sentiment and business activity.
The second-quarter FDI increase came despite continued pressure on South Africa’s broader capital flows. Portfolio investment recorded an outflow of 9 billion rand ($548 million) during the quarter, reversing an inflow of 9 billion rand in the first quarter.
Foreign investors sold 34.2 billion rand ($2.08 billion) of South African shares during the quarter, while purchases of domestic bonds reached 25.1 billion rand ($1.53 billion).
The contrasting movements between direct and portfolio investment highlight the different trends in foreign capital entering and leaving South Africa.
The latest FDI data also comes as the government seeks to strengthen its investment environment through reforms targeting infrastructure, energy and logistics.
South Africa has been promoting investment in sectors including renewable energy, manufacturing, mining and telecommunications as part of efforts to expand productive capacity and create jobs.
However, the composition of the second-quarter inflows means further data will be needed to determine whether the increase marks a sustained improvement in foreign investment.
The central bank’s figures provide a more detailed picture of South Africa’s external financing position as the country continues efforts to attract long-term capital while managing volatile portfolio flows.
For now, the $3.03 billion quarterly FDI inflow represents a substantial increase from the first quarter and the strongest level recorded in three years.
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