DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN
Date
2011-05-16
Authors
MASANGANE, PHINDILE C.
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Abstract
During the decade 1984-1994, Swaziland recorded impressive economic growth
rates. This has been attributed to the economic sanctions imposed on South
Africa during that period as well as the civil war in Mozambique. Swaziland acted
as one of the main hosts for foreign investment in that time for companies
wanting to access the large South African and Sub-Saharan Africa. Following the
political change in South Africa in 1994 and the end of the civil war in
Mozambique, Swaziland has faced unprecedented competition for foreign
investment. With the specific location advantage of the country no longer being a
main attraction, factors for foreign investment in Swaziland may have changed in
the new regional landscape.
The study investigated the importance rating of determinants that foreign
investors considered prior to investing in Swaziland post-1994. The investors
were also asked to rate post-start up and current satisfaction ratings of the
determinants. The findings are being compared with the country’s strategies for
attracting foreign direct investment.
The main findings are that political stability, economic stability and the country’s
overseas export partnership are in the upper quartile of the importance ranking
for investors prior to investing. All these factors were rated as currently “very
satisfactory”. Investors view the country’s political stability, its overseas export
partnership and its openness to trade as the most important for their continued
stay in Swaziland.
The country’s specific location, local and regional markets appeared in the lowest
quartile of importance ranking. This suggests that most of the investors are
“export-seeking” rather than “market-seeking.” Though human capital
development also featured in the lowest quartile of the importance rankings, it
was the most frequently mentioned factor that can help Swaziland increase its
FDI competitive advantage and its current state was viewed as a deterrent for
foreign investment
Description
MBA - WBS
Keywords
Foreign direct investment, Swaziland, Swaziland