Direct Investment Model for Tourism

Question: Discuss about the Direct Investment Model for Tourism. Answer: Introduction: Noteworthy, the South African sectors of finance and insurance, Real estate and business services, manufacturing, mining, transport, storage and communication ,trade, catering and accommodation s have progressed through foreign direct investment(Santander Trade portal,2017)Noteworthy, theres foreign investment to the tune of 40.7%,28.9%15.9%,10% and 4% respectively .Further, theres foreign direct investment in South Africa s financial and capital market sector(Nose, Saxeegard et.al,2016)Notably, most African countries which are still developing rely on foreign direct investment for economic progression. Foreign direct investment in Tourism, Medical services and Agriculture Industries in South Africa The south African tourism industry is in need of direct foreign investment due to micro and macro determinants (Saynman, 2007).Foreign investment in the tourism has been in terms of accommodation through the construction and expansion of the hotel industry .Among the countries investing in South Africa is Australia ,China, The United states of America, The United Kingdom among other countries. Foreign direct investment in the agriculture sectors is in form of subsidies and better technological advances in the field of agriculture through research and development based in South Africa. Further, medical services are receiving a boost through better medical care facilities, research and development initiatives through foreign direct investment partners. Among South Africa s trading partners are Australia, Canada and Brazil. Foreign Direct Investment Chart on South Africa According to the Organization for Economic Development data statistics, South Africa received the highest foreign direct investment between the years 2005 and 2009 when it slowed to 0.8 M from I.8 million (USD) in the year 2007.However,the rate of foreign investment picked up in 2010-11,at 1.02 and 1.2M respectively. In 2012, Foreign Direct Investment levels dropped to 0.9m and later rose to 0.98 in the year 2013.Notably,the year 2014 experienced a substantial raise to 0.8million to 1.2million (USD) in the year 2015 but later dropped to 1.08million in the year 2016. Currently South Africa has received substantial increase in foreign direct investment since the first quarter of 2017 by 1868 (ZAR)billion according to the statistics by Trading economics .Further, Foreign direct investment has averaged by 504.25 bn ZAR since the year 1956 up to now. Notably, Australia is the biggest foreign direct investor in South Africa followed by Brazil and Canada. According to the World Investment Report of 2015, the top African countries recipients of foreign direct investment for the year 2013 and 2014 were South Africa, Congo, Mozambique , Egypt and Nigeria. Notably, in the year 2014,South Africa received the highest figure of foreign direct investment at 6billion(USD) whereas Congo received the least at 3 b(USD) followed by Egypt at 4 billion(USD) .Noteworthy, Mozambique and Nigeria both received an influx of 6bn in the year 2014.Further,South Africa offers foreign direct investment in other African countries due to its developed status. Notably, the World Bank Report, South Africa Received 411.2M(USD) from China as foreign direct investment which was the highest in all the African countries followed by the Democratic Republic of Congo at 236.3m(World Bank,2017)Also, Kenya received 101m in the year 2010 as the third largest recipient of the Chinese Foreign direct investment venture. Among the least recipients where Mozambique at 0.28m and Tanzania at 25.72m (USD).The World Bank report suggests that South Africa is the best destination for foreign direct investment as contrasted with other Sub-Saharan African countries. References Nose ,M, Saxeegard, M Et.al.(2016)South Africa Selected Issues. International Monetary Fund. Retrieved from https://www.imf.org/external/pubs/ft/scr/2016/cr16218.pdf[Accessed 18 Aug 2017] OECD.(2016)FDI Flows. South Africa. O.E.C.D. Retrieved from https://data.oecd.org/fdi/fdi-flows.htm[Accessed18 Aug 2017] Santander Trade portal (2017) South Africa: Foreign Investment. Trade portal .Retrieved from https://en.portal.santandertrade.com/establish-overseas/south-africa/foreign-investment.[Accessed 18 Aug 2017] Synman, A.J. (2007) A foreign Direct investment model for tourism. North West University. Retrieved from https://dspace.nwu.ac.za/bitstream/10394/4318/1/snyman_ja(1).pdf[Accessed 18 Aug 2017] World Bank.(2017)Foreign Direct Investment Flows into Sub-Saharan Africa(English.)The World Bank. Retrieved from https://documents.worldbank.org/curated/en/505071468203651135/Foreign-direct-investment-flows-into-Sub-Saharan-Africa[Accessed 18 Aug 2017]