SOUTH Africa is a promising investment destination, according to Finnvera, Finland’s main credit agency and one of Europe’s stricter credit agencies.

South Africa has been downgraded by all three of the world’s main credit ratings agencies, Fitch, Standard & Poor’s and Moody’s.

However, Finnvera — which has commitments of some €11bn outside Finland — told a business delegation in Sandton, Johannesburg, on Tuesday that its outlook for South Africa had not deteriorated greatly this year.

"We are optimistic about South Africa. Finnvera gives South Africa a 3/7 risk rating, where 7 is highly risky. While labour issues are something which we are watching, overall we believe South Africa is politically and financially stable," Mika Relander a senior adviser at Finnvera, said on Tuesday.

He said the major threat South Africa faced was a deterioration in the macroeconomic framework of the world. The performance of the US and European economies would affect South Africa.

Mr Relander was part of a Finnish business and trade delegation led by Alexander Stubb, the country’s minister for European affairs and foreign trade.

Mr Stubb has been critical of debt levels of countries in Europe. Finland is one of the continent’s few remaining triple A-rated countries in terms of lending.

Mr Stubb told a press conference that Finland was looking to increase its exposure to South African manufacturing and other industries.

"Various Finnish companies are already operating in South Africa. They work in manufacturing and fast moving goods solutions among other areas. South Africa is an important trade partner for us," he said.

African Management Services Company CEO Paul Malherbe said South Africa could learn from Finland about how to develop an economy using small businesses.

"Small and medium enterprises contribute less than 10% to South Africa’s gross domestic product. In developed countries, this is closer to 50%. We have the problem of a shortage of 830,000 management and highly skilled people in the economy.

"I believe need to develop our smaller businesses," he said.