SADC investment perspectives in a changing international investment landscape

SADC investment perspectives in a changing international investment landscape

The global arena for foreign direct investment (FDI) has become much more fluid and complex in the five years from 2010 to 2015. The Southern African Development Community (SADC) as a region has shown exceptional growth but relatively lacklustre FDI inflows.

Although the International Monetary Fund (IMF) predicts sustained high short-term growth in all of sub-Saharan Africa, the dependence of SADC countries on resource-orientated exports has exposed them to the biggest slump in commodity prices in the period from 2010 to 2015. Furthermore, the decline in resource prices is estimated to be a long-term structural shift.

Therefore, SADC policymakers should to take a new look at current investment policies and attitudes. In particular, a clear policy shift will be needed to diversify investment portfolios and grow domestic markets.

Recommendations include:

  • governments in SADC should strive towards clear and transparent policies on the protection of investors’ capital and subsequent returns on investment
  • investment in renewable resources and value-added service investments and exports should be encouraged
  • SADC member states should adopt policies based on proven developmental strategies that focus on enabling and growing capital rather than dated ideological policies
  • investment should be made in a skilled labour force and in hard infrastructure that connects SADC markets

 

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