A FRAMEWORK FOR ATTRACTING FOREIGN DIRECT INVESTMENT TO THE SOUTH AFRICAN DEVELOPMENT COMMUNITY

Abstract

The 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 FDI