A blueprint for the rejuvenation of the South African economy - Foreign Direct Investment


The Inclusive Society Institute has embarked on an extensive economic research project, which will culminate in a comprehensive ‘Blueprint for rejuvenating South Africa’s economy’. The methodology includes a series of dialogues with various sectoral stakeholders and policymakers. These dialogues each have two parts to them: (i) Gaining an understanding from the particular sectors perspective as to what the country needs to correct policy wise, and (ii) what new initiatives / policies should be introduced to shift the economy onto a higher growth trajectory.


The dialogue with the FDI community was held in collaboration with the Southern African-German Chamber of Commerce on 24 and 25 August 2021. A sampling of points made during the discussion included, amongst others:


  • Efforts to attract investment should be directed towards areas where South Africa has a competitive advantage. Investment won’t flow to non-competitive sectors and thus such efforts would be fruitless.

  • South Africa should set itself up as a geo-political alternative to other jurisdictions in order to replace manufacturing capacity when such capacity is disrupted. The Covid-19 pandemic has proved the need therefore.

  • South Africa will have to be far more adventurous and expansive in providing electricity generation capacity. It will have to, for example, take into account the transforming automotive industry that is moving away from fossil fuels.

  • Investment is about risk and reward. If government wants manufacturers of large machinery to invest, it will have to assist in creating markets for such reward via the government spend.

  • Do less, achieve more. The country needs to rather focus on a smaller number of deliverables. It is better to get three or four crucial policy areas right, than to spread the efforts across a broad spectrum of areas without the means or capacity to implement them.

  • Stay real. Focus on projects that are achievable within the country’s limitation. Don’t venture with unachievable grand scheme projects which serves only to defocus energy that could rather be used to implement realisable projects in line with the country’s level of development.

  • Fix the trust deficit between government and business. This will require attitudinal changes from both government and business. A new social contract is needed.

  • FDI investment takes a long-term view. Investors therefore need policy certainty. The fluidity of the South African policy regime does not instil confidence.

  • Less regulation. The South African authorities should not strive to outdo the developed world in terms of regulation. The fact that developing countries are less regulated is in fact a competitive advantage that investors take into consideration.

  • The labour force is not sufficiently skilled for the economy, which requires a significant overhaul of the education system and curriculum.


A full report on the deliberations will be released in due course.