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Item Perceptions of Investors Regarding FDI in Africa(2014-01-14) Škoro, MilkoThe research subject of this study is based on an understanding of the perceptions of potential investors in Africa against a preconceived bias. The main hypothesis of this research is that there is a bias by developed economies when investing in Africa. The hypothesis is explored through three research questions. The first research question seeks to understand if there are specific reasons for the bias towards investing in Africa; the second seeks to determine if the rationale for investing in Africa is overridden, either consciously or subconsciously, by the emotion and/or perceptions of Africa. The third research question compares Africa’s attractiveness to other emerging markets such as Brazil, Russia, India and China. (South Africa is included in the comparison in order to obtain a view of the BRICS countries). Data was collected electronically through an online service provider that specialises in survey research and interpolated into a statistical package. The research shows that there is no statistically significant bias towards investing in Africa, and that growth in the African market is the primary reason for investing in the African continent, followed by mineral extraction and mineral beneficiation. Lastly, the research shows that Africa is considered a preferred investment destination, but that Southern Asia and South America hold a significantly similar position in the views of the respondents.Item Perceptions of the impact of labour market flexibility on foreign direct investment in South Africa(2013-10-04) Sompondo, Yolanda LungelwaForeign Direct Investment (FDI) is said to have spill over effects such as skills transfer and employment creation. In 2011, FDI inflows into South Africa declined to -0.12% of GDP and 43.6% less in the first quarter of 2012, than the same time in the previous year. There are suggestions that the country’s labour regulations are one of the contributory factors in low FDI inflows. This can also be inferred from the Global Competitiveness Report, 2012-2013, on which the study is based. The report ranks labour regulations in South Africa as the second highest obstacle in doing business. The country is also ranked 143rd out of 144 countries in hiring and firing practices. The objective of this study was to explore how South African labour regulations are perceived to impact FDI. The study focused on perceptions of three economic stakeholders- business, government and labour. This study deployed qualitative methods using purposive sampling and an in-depth interview guide. The interviews were conducted face to face with a total of 23 interviewees from the three categories. The findings of the study revealed that while labour and government were found to differ on the perception of rigidity of labour regulations, all investors interviewed perceived South African regulations to be inflexible. The findings of business perceptions were categorised into two sections. The first section looked at costs and the second section looked at uncertainty. On the cost section, the study observed that non-wage costs were perceived to have increased due to difficulties in laying off employees that were not productive. Trade union conduct during protest actions and inefficient judiciary structures were also perceived to contribute to non-wage costs. Wage-costs were perceived to have increased by having to employ skilled BEE candidates who were considered costly as they were alleged to be in short supply. The second section suggested the legislative environment and policy formation were perceived by business stakeholders to be ii uncertain, consequently threatening confidence and deterring investment. The study also revealed varying perceptions among the three biggest union federations in the country. The National Council of Trade Unions (NACTU) and Federation of Unions of South Africa (FEDUSA) were more receptive to the relaxation of labour regulations and perceived current regulations as deterrent to business. The Congress of South African Trade Unions (COSATU) was against the relaxation of regulations and suggested regulations are currently flexible. The study revealed inconsistencies between various government departments in the application of its FDI policies. While other departments emphasised the need and importance of FDI, some departments highlighted the need for the protection of workers. However, government has adopted investor friendly policies in the National Development Plan which aims to create a business friendly environment. The study found this will create policy certainty and will be a step closer to such an environment. The recommendations of the study focus on ways of engagement among stakeholders. There needs to be better ways of resolving differences between the parties. Where violence is instigated, particularly by trade union members, the stakeholders need to work together to hold the responsible individuals accountable. This will promote an environment of lawfulness and therefore stability for FDI. The National Economic Development and Labour Council (NEDLAC) must be used to consolidate discrepancies in perceptions. Existing organisational weaknesses of this forum must be addressed in order to ensure that it serves its purpose- which is to promote robust discussions and reach amicable agreements which will enrich not only their interests but also those of the economy as a whole.Item Chinese foreign direct investment in South Africa - distinguishing constructive from destructive investment(2013-10-04) Simeonova, Antoniya K.The report examines Chinese Foreign Direct Investment (FDI) into South Africa and distinguishes between constructive and destructive Chinese FDI in the host country. The literature does not always agree on the factors distinguishing constructive and destructive FDI flows, but the central and definitive points remain broadly similar. Apart from reviewing the published literature and in order to gain a better understanding behind the dynamics of Chinese FDI into South Africa and the related positive and/or negative effects associated with Chinese FDI into South Africa, the research study focuses on two separate samples, one expert Chinese sample (seven interviewees) and one expert South African sample (seven interviewees). The key findings of the report, the factors, which distinguish constructive and destructive Chinese FDI in South Africa, are very similar to the conclusions drawn in the published literature and the results of the interviews. Job creation, social upliftment and technology „know-how‟ transfer being associated with „constructive‟ Chinese FDI, while environmental damages, exploitive labour practices, anti-competitive practices, and unavailability of local beneficiation being associated with „destructive‟ Chinese FDI. Despite the availability of several „destructive‟ examples of Chinese FDI/trading inflows into South Africa‟s economy, the overall conclusion of the study is that Chinese FDI into South Africa is a mutually beneficial phenomenon for both countries. Large Chinese FDI projects in South Africa contribute positively toward the country‟s development plans, improve South Africa‟s manufacturing facilities and know-how, create employment and help develop various previously troubled mining projects. Chinese companies, in turn, benefit from South Africa‟s availability of natural resources, stable economy, sophisticated infrastructure, government support, and proximity to large international ports.Item TAX INCENTIVES THAT ENABLE FOREIGN DIRECT INVESTMENT(2011-10-20) Swart, Izak WesselsSouth Africa as developing nation does not attract foreign direct investment in the same quantities as other developing nations. The project examines what foreign direct investment constitutes, the benefits associated with foreign direct investment for host countries and trends in foreign direct investment. Tax incentives associated with foreign direct investment are examined to establish what tax incentives South Africa can offer international investors to enable more foreign direct investment into South Africa. The work is based on a literature review. The findings are that certain matters in South Africa reduce South Africa‟s chances of obtaining foreign direct investment. Tax incentives should be offered to offset these mattersItem An evaluation of GEDA’s investment promotion strategies for attracting FDI(2011-10-20) Schoeman, AnchenInvestment promotion agencies (IPAs) around the world are competing to attract foreign direct investment (FDI) to their countries. The competition is especially rife in developing countries and the same holds true for South Africa in its effort to ensure economic growth and development. IPAs are thus tasked with ensuring that effective investment promotion strategies are implemented that will result in a maximum return for their governments. A correlation between investment promotion and FDI has been determined by researchers and acts as one of the catalysts for attracting FDI. GEDA, as the most prominent provincial IPA in South Africa, is at the forefront of dealing with this competitive environment, and determining the effectiveness of its strategies can guide future direction. GEDA, as the case site, was investigated to evaluate how the various investment promotion techniques are applied as part of its investment promotion strategy. In-depth interviews with both GEDA managers and its stakeholder community members were conducted. It was found that GEDA is actively utilising three of the investment techniques - including image building, investment generation and investment facilitation - whilst not pursuing a policy advocacy role in its current scope of activities. Specific quantifiable measures have been put in place to measure the effectiveness of GEDA‟s investment promotion strategies whilst lacking more qualitative measures to determine the quality of products and service offerings. GEDA‟s stakeholder community has a positive perception of GEDA yet also highlights some issues for consideration in future strategies. This research should be of value to Investment Promotion Agencies, multilateral bodies and governments who are seeking a better understanding of investment promotion strategy, the application of promotion techniques, and approaches to measuring performanceItem A FRAMEWORK FOR ATTRACTING FOREIGN DIRECT INVESTMENT TO THE SOUTH AFRICAN DEVELOPMENT COMMUNITY(2011-05-10) Kubheka, MilesThe African continent is rich in resources, culture and history, but yet it is the poorest economically. “Whilst making up more than 25 per cent of the inflow to the developing world in 1970, Africa‟s figure for 1997 was less than 5 percent” (World Bank, 2001). There is theoretical and empirical proof that the impact of FDI on host country economic growth is manifold. FDI is integral for stimulating sustained growth in developing countries. Alarmingly, a poor region like Africa that so desperately needs to increase its growth rate, has not managed to attract FDI despite major attempts at enticing FDI. This research proposal contextually reviews the literature on the importance of increased global FDI, as well as the literature on the positive correlation between FDI and economic growth. This study however, focuses primarily on the factors that attract FDI, and what SADC countries can do to increase their share of global FDIItem FOREIGN DIRECT INVESTMENT IN AFRICA:(2011-04-06) Desvaux de Marigny, Louis Jean MichelAfrica is the poorest continent and attracts the least Foreign Direct Investment (FDI). The continent is plagued by civil wars, corruption, political and macroeconomic instability, small markets, declining infrastructure, burdensome regulations, exchange rate and price instability. This project report uses Zimbabwe as a case study. Zimbabwe’s history is analysed and the prospects of renewed investment in the current climate or following a change in leadership or regime are investigated. What can be done to attract increased, beneficial FDI? What should leaders focus on in order to attract investment and foster economic growth? Which countries in Africa have succeeded in attracting FDI? What should the continent be doing as a whole to attract FDI in an increasingly competitive global arena? This study is intended as a guide for future policy makers in Zimbabwe and Africa to choose policies that will maximise FDI and thereby help to reduce poverty throughout the continent. iii