Policy determinants for FDIs in South Africa

Abstract

The effectiveness of South Africa's policy framework towards attracting FDI has been questionable. Determined to redress the instabilities created by the apartheid regime, the Government of National Unity (GNU) commissioned the Macroeconomic and Research Group (MERG), and charged it to devise appropriate policy reforms and intervention mechanism to address the shortcomings. This research critically interrogates the effectiveness of government's policy reforms towards attracting FDI, especially the impacts of the Reconstruction and Development Programme (RDP), the Growth, Employment and Redistribution (GEAR) initiative and the Accelerated and Shared Growth Initiative of South Africa (ASGISA). This research concludes that the policy determinants for inflow FDI have been self-defeating. Also, it was found that necessary reforms would have to be conducted to correct some of the shortcomings of the macroeconomic policies, as a way of creating an environment that is capable of attracting greenfield investments (FDI) to South Africa.