Agriculture, Economic Development and Tourism

THE MINISTER OF AGRICULTURE, ECONOMIC DEVELOPMENT AND TOURISM

1. What are the details of the inward investments in the Western Cape economy from EU countries over the last three financial years and According to FDI Markets, a service from The Financial Times (2024) which is used as an investment data source,

• 13 out of the 27 European Union (EU) member countries invested in the Western Cape between 2021 and 2023.
• During this period, the Western Cape recorded a total of 35 inward foreign direct investment (FDI) projects (9 in 2021, 14 in 2022 and 12 in 2023) from the EU, which is equivalent to 32.71% of total projects.
• About 71.43% of these projects were new, while 25.71% were for expansion.
• The 35 projects injected approximately R7.37 billion worth of capital investment into the province (which is more than one-fifth of total capex).
• Associated capex from these investments increased from R2.03 billion in 2021 to R3.19 billion in 2022, then declined to R2.15 billion in 2023.
• France and the Netherlands were the top two countries in terms of projects tracked, each accounting for 17.14% of total projects.
• In terms of capex, France (19.37%) and Belgium (14.35%) were the top two countries.
• Business and software and IT services accounted for a significant share of the number of projects and capex, with a combined share of 40.00% of the number of projects and 44.85% of capex.

A detailed report on Inward FDI in the Western Cape from the EU over the period 2021-2023 is attached as Annexure A.

           (b) How do such investments contribute to the growth of the Western Cape economy and to job creation?

Inward FDI helps to create new jobs in the province. Between 2021 and 2023, an estimated 2 711 jobs (701 in 2021, 1255 in 2022 and 755 in 2023) were created through the investment by EU companies in the Western Cape. The share of total FDI jobs across all formal sectors, except government, was 0.19% in 2021, 0.14% in 2022 and 0.17% in 2023. In addition, FDI contributes to research and development, which is a facilitator of innovation and a key driver of economic growth. About R532.09 million of capex in 2022 and R895.86 million in 2023 were linked to research and development.