In South Africa, their exchange rate system is set up as floating system. Essentially the rand exchange rate will be determined by the market. Similar to other systems, the Reserve Bank can influence the rate by buying and selling in the foreign exchange market, yet they typically try not to intervene with the market aside from building up foreign exchange reserves (although the Reserve Bank says this is to manage liquidity and not to influence the exchange rate) (Resbank). There has been much speculation from economists that, much like many other countries that do business with China, the recent downturn in the South African economy was influenced by the poor performance of China in 2015 (Bhoola). In the foreign exchange market, despite
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If you are an outside firm looking in, most are not excited about the potential venture however, the South African government welcomes and tries to encourage the investment. Even though macroeconomic conditions have generally improved in the nation, FDI has remained low in the post-apartheid era. Natural resources and a large market size make the area appealing, yet investors are hesitant. Over a period between 1994 and 2002, FDI made up less than 2% of GDP. Despite the reservations, some nations (England, Germany, and the US) are taking advantage of the resources, typically in the finance and services sectors, as well as mining and manufacturing. FDI has ticked up over the last decade, though, reaching almost $140 billion USD in 2015 (Datamonitor, Figure 5). Overall, the country is very open to FDI and there are very few restrictions outside of those natural resource industries, banking, and insurance. Aside from those industries, there is no governmental approval needed for FDI. Despite this entryway for investing in the country, it is perceived that the government may not be able to handle some of the issues that arise from FDI and merges and acquisitions. To support FDI in South Africa, the government has implemented several tax policies and incentive programs including: 12i Tax Incentives, Manufacturing Investment Program, Film and Television Production Rebate Scheme, Automotive Investment Scheme, and nearly a dozen or so more (Investment
If you are an outside firm looking in, most are not excited about the potential venture however, the South African government welcomes and tries to encourage the investment. Even though macroeconomic conditions have generally improved in the nation, FDI has remained low in the post-apartheid era. Natural resources and a large market size make the area appealing, yet investors are hesitant. Over a period between 1994 and 2002, FDI made up less than 2% of GDP. Despite the reservations, some nations (England, Germany, and the US) are taking advantage of the resources, typically in the finance and services sectors, as well as mining and manufacturing. FDI has ticked up over the last decade, though, reaching almost $140 billion USD in 2015 (Datamonitor, Figure 5). Overall, the country is very open to FDI and there are very few restrictions outside of those natural resource industries, banking, and insurance. Aside from those industries, there is no governmental approval needed for FDI. Despite this entryway for investing in the country, it is perceived that the government may not be able to handle some of the issues that arise from FDI and merges and acquisitions. To support FDI in South Africa, the government has implemented several tax policies and incentive programs including: 12i Tax Incentives, Manufacturing Investment Program, Film and Television Production Rebate Scheme, Automotive Investment Scheme, and nearly a dozen or so more (Investment