Look deeper into Foreign Direct Investment- South Africa
Submitted by siyakha45 at 2 November 2019
We often hear about the strides of the government securing foreign investment in order to help boost our economy but no one really cares to explain what Foreign Direct Investment actually means and its effects. SA is hosting another investment conference next week in Sandton from the 5th-7th.
According to Kimberly Amadeo, an investment into a foreign country is considered a Foreign Direct Investment if it establishes a lasting interest. A lasting interest is when an investor obtains at least 10% voting power into the project to be executed. In simple terms an FDI occurs when an investor is guaranteed a certain percentage of ownership into the factory. It is characterized by an element of control.
My point here is, going to the investment conference we should thread carefully as the country as to where we direct these forms of investment so that we don't find ourselves in a position where outsiders have a direct influence on how our resources must be utilized. And there needs to be a benchmark on the amount of ownership an investor obtains so that they don't secure majority of ownership in wherever the investment has been directed to, a maximum of 35% would be fine.
Otherwise we must welcome any form of investment that is intended to create employment.