FDI Dries Up In South Africa

Foreign direct investment (FDI) to South Africa slumped 87% to $1,3-billion in 2010, according to a United Nations report. Some of the country’s economists believe that the decline could be linked to South Africa’s sluggish productivity, owing to the degradation of the country’s education and training system, together with the threatening monopolistic-like union movement. One key argument is that a large concentration of business was in corporate hands and that not enough small businesses and entrepreneurs were being encouraged to thrive. By some estimates, South Africa only shows entrepreneurial activity of about 5%.