Foreign direct investment (FDI) inflows to South Africa rose to R17.3-billion in the first six months of 2011, which was nearly three times higher than the amount recorded in the first half of 2010.

Ironically, though, the bulk of that FDI was likely to be attributed to Wal-Mart’s acquisition of a large interest in Massmart, which was currently the subject of a Competition Appeal Court hearing brought by three government departments, which believe the conditions on the transaction were too lenient.

The Medium-Term Budget Policy Statement, which was released on Tuesday, indicated that portfolio flows, primarily into government bonds, also remained far higher than the FDI inflows, at R55.9-billion.

South Africa’s terms of trade also improved by 1.9% during the first six months of this year compared with the 2010 average, while exports grew by
13.9% in the second quarter following a substantial contraction during the first three months of the year.

Imports grew by 9.8% and the current account deficit increased marginally from 2.8% of gross domestic product (GDP) in 2010 to 3.2% in the first half of 2011.

The financial account surplus totalled 5.5% of GDP in the first half of the year, compared with 4% in the whole of 2010