Question

1. What are the costs and benefits to South Africa of having more foreign direct investment? Of having less?

Answer 1

FOREIGN DIRECT INVESTMENT IN SOUTH AFRICA

According to UNCTAD ( United Nations conference on Trade and Development) FDI flows to South Africa climbed by 13%, FDI in South Africa is more than doubled to $5.3 billions.

Benefits of having more FDI in South Africa:-

(i) Nationalization doesn't have to cut out the private sector completely.

(ii) Partnership in Namibia and Bots wanna between mining companies and the government have seen little decrease in foreign investment.

(iii) The private sector handles the funding and operations of the mining industry, while remaining in control of the mineral resources.

(iv) Appealing for leading to a diversification of foreign investment and assests.

(v) Nationalizing the mines could , in the short term , make it better off on the whole. If ownership of the mines is turned over to the state , future profit and current cauld be used towards creating new jobs and providing more state services for the betterment of South Africa's peoples.

(vi) Ownership of the mining industry turned over to the public sector , investors and private sector previously involved in mining able to focus on the industries. And would make them more wealthy and competitive on a domestic and global level.

Benefits of having low FDI in South Africa:-

(i) Low FDI makes South Africa more competitive on global stage.

(ii) Low FDI helps the government to focused on economically backward section of the South Africa because FDI mostly hits the local business.

(iii) Low FDI helps existing investor to invest more because low FDI means sufficient and higher compensation.

(iv) Low FDI donot hampered the ownership of the government of South Africa in mining and other business.

  

  Thanks.