A recent Ernst & Young (EY) survey shows South Africa has retained its position as the top foreign direct investment (FDI)  destination in Africa, but Morocco has caught up with it, the country's promotion agency said on Tuesday.

The 2018 EY Africa Attractiveness Survey report shows that during 2017, FDI into Africa increased by six percent, with 718 projects coming in compared with 676 the previous year, Brand South Africa said.

The top five destinations were led by South Africa with 96 projects, giving it a 31 percent share of FDI in 2017, though this was a decline from 139 in 2016.  Morocco also had 96 projects, up from 81 in 2016, while Kenya's share rose to 67 from 40, Nigeria was up to 64 from 54 and Ethiopia surged 288 percent year-on-year to 62 projects.

The latest survey shows that specific regions and countries’ outlook and investment attractiveness have changed dramatically, Brand South Africa general manager for research Dr Petrus de Kock said.

"This has several implications for South Africa in a year where President (Cyril) Ramaphosa made investment (both domestic and foreign) a key priority of his administration and cabinet," he said.

"From the EY data it is clear that South Africa lost momentum in attracting FDI in 2017.”

De Kock said Morocco’s position should serve as a wakeup call.

"The (North African) country is on a trajectory to intensify its FDI credentials in the coming years. It is therefore important following on the successful investment conference initiated by President Ramaphosa, that South Africa utilises existing strengths in market diversification, strength of incentives for investment, and the infrastructural profile of the market, to attract more investment."

"South Africa needs to sustain momentum to stimulate GDP growth because there is a direct correlation between robust GDP growth and FDI attraction."

South Africa is currently in a technical recession after a consecutive contraction in GDP in the second quarter. The National Treasury has cut the overall economic growth forecast for 2018 to 0.7 percent from the 1.5 percent predicted in February.

A three-day investment conference Ramaphosa convened last month to garner financial support to help revive the economy raised nearly R290-billion in solid investment commitments, the president told delegates.

"The country must  ensure that it continues on the path of careful reforms to improve ease of doing business in the market,” De Kock said on Tuesday.