Samuel Augustine Umezurike

Notwithstanding its struggles to tame the high levels of poverty and inequality, South Africa is considered as a major economic hub of Africa. However, as an economic hub, there are other countries that perceive South Africa as a capitalist, neo-liberal economy that goes all out to dominate not only its neighbors in the southern hemisphere, but also many other developing nations in the continent. Therefore, the main aim of the study is to assess the socio-economic implications of South Africa’s foreign direct investment in Southern Africa. As far as the authors are concerned, there is yet to be a frank analyses of the varying perspectives, as well as a holistic explanation of the clearly, yet complex relationship which exists between South Africa and many other countries in the southern hemisphere. While the authors acknowledge the efforts of several scholars in trying to juxtapoze the nuances in these relationships, they insist that there has not been a contextual treatment with due consideration for the socio-economic implications of South African business expansion in Africa. Thus, the authors sincerely believe that the paper has serious implications for emerging economies especially in Africa. Other African countries can learn from South Africa’s tactical brilliance; the way it has positioned its economy as a major economic hub in Africa with illustrious attractions that are derived from sophisticated infrastructure, a good educational system, a functional health care system and world class standard ecotourism. The study was conducted using documentary analysis and, therefore, allowed the researchers to source and utilize documents, both in private and public domain, on the basis of their relevance to the research.

Keywords: democracy, foreign direct investment, public administration, Southern African Development Community, Southern African Customs Union, Southern African Power Pool, regional cooperation.
JEL Classification: H5, N27, 016, 019, 024, 055

On gaining independence, one of the first steps it took was to open its doors to various socio-economic dynamics. It is fair to say, therefore, that South Africa’s neo-liberal approach was necessitated by the nation’s desire to diversify its economy in multiple sectors and, therefore, permit foreign direct investment into the country. To most researchers, this has resulted in near deindustrialization leading to gross job losses and reduced standards of living. Essentially, this paper, relying on realist theory, delves into one of the issues, i.e., the demise of the manufacturing sector in South Africa to deliver the poignant explanation pertaining to South Africa’s sociopolitical economy. The authors find that the presence of China’s finished products in South Africa’s market has emboldened and continues to debilitate its manufacturing industry. A major concern is that South Africa’s attempts to soften this effect on its manufacturing sector through its protectionist policy – precisely the application of the quota system on imported goods – will not go too far considering the limitations placed on South Africa by virtue of its membership in organizations such as WTO and BRICS.