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Citation Information

Type Working Paper - Problems and Perspectives in Management
Title The dynamics of foreign direct investment in SADC countries: Experiences from five middle-income economies
Volume 11
Issue 4
Publication (Day/Month/Year) 2013
Page numbers 35-45
URL http://www.businessperspectives.org/journals_free/ppm/2013/PPM_2013_04_Mahembe.pdf
This paper examines the dynamics of foreign direct investment (FDI) inflows and economic growth in five middle-income SADC countries, namely Botswana, Lesotho, South Africa, Swaziland and Zambia. It also analyzes the individual countries’ policies and strategies that are aimed at boosting FDI and economic growth. The analysis of this study shows that in the 1980s and the early 1990s, most SADC countries were still coming out of colonialism and as a result, their policies were focused on import substitution, socialism and a command economy. There was a heavy emphasis on protectionism and the protection of infant industries from foreign competition. As a result, the FDI inflows were fairly low during this period. However in the late 1990s and early 2000s, the majority of these countries embarked on privatization, liberalization, economic structural-adjustment programmes and FDI regulatory reviews. These policies led to significant increases in FDI inflows, especially from developed countries. However, like many other African countries, the FDI inflows into these countries are still fairly low. Some of the constraints identified in this paper include political instability, policy uncertainty, poor infrastructure and difficulty in doing business.

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