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South Africa saw larger foreign direct investment (FDI) inflows in the second quarter than the first quarter as domestic firms received debt and equity funding from foreign parent companies, central bank data showed yesterday.

Africa’s most industrialised economy had FDI inflows of R26,3 billion ($1,76 billion) in the second quarter from inflows of R11,7 billion in the first three months of the year, the South African Reserve Bank (Sarb) said in its Quarterly Bulletin.

The country registered portfolio investment inflows of R10 billion from April to June from inflows of R29,2 billion in the prior quarter, the Sarb said.

South Africa relies heavily on foreign money to cover its large budget and current account deficits, with data showing that foreign investors held 37,3 percent of South African government bonds as of August.

But investor confidence in South Africa remains fragile, while the economic growth outlook is clouded by a lack of clarity and progress on reforms.

The financial account of South Africa’s balance of payments recorded an inflow of capital of R13,2 billion, or 1 percent of GDP, in the second quarter from R24,1 billion in the first quarter. — Moneyweb.