Foreign Direct Investments in the South African Construction Industry: Promulgating the Inherent Benefits
Authors: Matthew Ikuabe, Olushola Akinshipe, Clinton Aigbavboa, Andrew Ebekozien, Ayodeji Oke, Romane Mofokeng
Abstract: One of the key indicators of the viability of the economy of any nation is the aggregate output of its construction industry. To this end, it is highly encouraged that significant investment portions of any country should be devoted to capital investment to spur development and ultimately boost the Gross Domestic Product (GDP). However, capital projects are usually attributed with the demands of enormous financial input, hence, due to low gross domestic savings, alternative source of financing such as foreign direct investment (FDI) as against the conventional government-sourced financing experienced in most developing countries is highly encouraged. In the light of the aforementioned, this study assesses the benefits of FDI in the South African construction industry. Construction professionals formed the population of the study, while the data elicited from the respondents was analysed with appropriate analytical tools. Findings from the study shows that the most significant benefits of the flow of FDI into the South African construction industry are technology transfer, enhanced productivity and human resource development. Conclusively, the study makes recommendations that would help in stimulating the flow of FDI into the construction industry in South Africa considering the inherent benefits as revealed in its findings.
Keywords: Benefits, Construction Industry, Developing Economy, FDI, South Africa
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