Benchmarking South Africa’s Foreign Direct Investment Policy

This policy brief examines South Africa's Promotion and Protection of Investment Bill of 2013 (PPIB), analyzing how it shifts the country's approach to foreign direct investment (FDI) by prioritizing national development and sovereign regulatory rights over traditional international investment treaty protections.

• The Promotion and Protection of Investment Bill of 2013 (PPIB) represents a significant shift from South Africa's previous bilateral investment treaties (BITs) by limiting the role of international investment agreements and replacing international arbitration with domestic dispute resolution.
• The PPIB introduces a more restrictive definition of 'investment' compared to typical BITs, requiring that an investment demonstrate a significant physical presence or material economic investment rather than just contractual rights.
• A major point of concern for attracting FDI is the PPIB's approach to expropriation, which excludes compensable indirect expropriation for measures taken to protect public welfare, state security, or environmental protection.
• The PPIB departs from the international standard of market-value compensation for expropriation, instead adopting a constitutional model that balances public interest with the interests of the affected parties.
• South Africa's proposed domestic policy is misaligned with the SADC Finance and Investment Protocol (FIP), which continues to offer BIT-type protections such as fair and equitable treatment and international arbitration.
• The author suggests that SADC member states should harmonize their policies by terminating the FIP investment annex and adopting the SADC Model BIT, which balances state regulatory interests with investor protections more effectively.
• To successfully attract sustainable FDI, South Africa must look beyond legal frameworks and improve the quality of its governance institutions, political stability, and the performance of public institutions to ensure policy coherence.

APA

ADeleke, F. (2015). Benchmarking South Africa’s Foreign Direct Investment Policy. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Insights-13.pdf

Chicago

ADeleke, FolA. Benchmarking South Africa’s Foreign Direct Investment Policy. South African Institute of International Affairs, 2015. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Insights-13.pdf.

Wikipedia

{{cite report |last1=ADeleke |first1=FolA |title=Benchmarking South Africa’s Foreign Direct Investment Policy |publisher=South African Institute of International Affairs |date=13 April 2015 |url=https://saiia.org.za/wp-content/uploads/2015/05/Policy-Insights-13.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{adeleke2015benchmarking, author = {ADeleke, FolA}, title = {{Benchmarking South Africa’s Foreign Direct Investment Policy}}, institution = {South African Institute of International Affairs}, year = {2015}, month = apr, url = {https://saiia.org.za/wp-content/uploads/2015/05/Policy-Insights-13.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }