Investment promotion in the South African manufacturing industry: Incentive comparisons with Malaysia and Singapore

Abstract

South Africa needs to increase its inward foreign direct investment (FDI) in order to achieve economic growth. The purpose of this article is to explore which interventions could be launched in the short term to enhance the country's attractiveness for foreign investors. The findings of the literature review demonstrated that incentives, as a determinant of investment, are the short-term intervention with the most significant potential to attract additional FDI. A comparative study, which provided insight into the incentives that are currently offered to the manufacturing sectors of three countries (South Africa, Malaysia and Singapore), assisted in identifying two additional incentives that the South African government could introduce and three existing incentives that could be amended. The introduction or modification of these incentives could ensure that South Africa has a competitive advantage to attract investment from foreign investors and thereby increase its inward FDI in the manufacturing industry.