Publication

This paper tries to identify factors when foreign direct investment (FDI) is beneficial to a country and when it is not. The author examines the case of South Africa, where policymakers have introduced policies to encourage FDI. However, the results have not met expectations, particularly in relation to greenfield investment. After all, FDI does not necessarily result in economic growth and may even be undesirable in certain sectors, such as retail. Increased FDI flows into South Africa should be an outcome of more investment by the public sector in economic infrastructure to facilitate further investment by the local private firms. This will increase confidence in the South African economy and can attract more FDI.