Policy Framework for Foreign Direct Investment Promotion in South Africa: Operations, Effectiveness and Sustainability

"Foreign direct investment promotion in South Africa has expanded considerably in the two decades from 1995 to 2015. The investment promotion system is quite decentralised, with much of the work being carried out by provincial governments, albeit with support from Trade and Investment South Africa (TISA), a division of the Department of Trade and Industry. This occasional paper draws on a series of interviews with representatives of South Africa’s provincial investment promotion agencies and information from their annual reports. It looks at how these agencies operate and perform, examining issues of competition and co-ordination. There is a strong argument to be made for TISA to provide greater strategic oversight over investment promotion in South Africa. Moreover, with new efforts to improve the quality of foreign investment flowing to South Africa, especially in the light of the Promotion and Protection of Investment Bill of 2013, much of the focus has been on investment regulation. However, there are a number of potential interventions on the investment promotion front that the government should also be considering as part of its subsequent steps to ensuring high-quality, sustainable investment."