Investing in South Africa

The foreign country I have identified for our company to invest in is South Africa. The 2012 A.T. Kearney Foreign Direct Investment Confidence Index currently ranks South Africa 11th in the World.[1] The report further goes to detail some of the country’s FDI environment and regulations. Some of the countries environmental constraints closely mirror that of most Southern Region developing countries and most of the countries in Asia. The lack of infrastructure and quality human capital impedes thorough development. On the optimistic side, the economy of South Africa still offers international firms an opportunity to use their country as a gateway into investing in Africa. The South African people are also becoming very consumer aware and responding favorably to Western trends i.e. insurance and technology. Penetrating South Africa can provide our company gateway to the whole population of Africa (about 1 billion people) as a market pool. South Africa also has a fairly young population that has access to a substantial amount of disposable income, especially in the urban areas.[2] When it comes to the Regulations of foreign investment, South Africa’s regulatory bodies, SARB and SARS, have not placed any restriction on inward investment. The only thing that is monitored for inbound investment is the debt to equity ratios.

-----------------------

[1]

1. FDI flows, 2007-2010 (annual average) 42 245.3 1 052.8

2. FDI flows as a percentage of GFCF, 2007-2010 (annual average) 8.0 0.3

3. FDI stocks, 2010 1 015 517 593 217

2. FDI stocks as a percentage of GDP, 2010 42.4 24.8

[2] http://www.cover.co.za/long-term-insurance/staking-a-claim-on-foreign-direct-investment