The political challenges of foreign investments: insights from South Africa's banking sector.

Over the past few decades, research on factors fundamental to attracting investments burgeoned as researchers tries to understand better, the various conditions favourable to foreign investors. In Africa, however, literature on the bigger and more important question about the determinants of FDI has limitations owing to lack of depth, specificity and focus on individual countries, industries and the actual factors posing challenging to investors. The overarching purpose of the study is to advance and deepen knowledge on the political investment climate of South Africa, and it stemmed from the observation that the existing body of knowledge lacks depth and specificity in terms of literature on the bigger and important phenomena of the FDI determinants in individual African countries. This thesis is therefore, a gap-based project carried out to examine the political investment climate of South Africa, in order to identify and understand better, the political factors and challenges facing investors in the banking sector, knowledge of which is envisioned useful for painting a clearer picture of the political investment climate to foreign firms in South Africa.Researching from a qualitative methodological approach and a post-positivist perspective, the study sought for the perceptions of participants from the banking sector through semi-structured interviews with 34 officials from foreign banks, local banks, identified government departments and intermediaries, who were sampled using mainly the purposive and snowballing sampling techniques. Participants were asked similar open-ended questions, giving them voice to talk richly about their experiences in the light of the political investment climate, allowing the study to decipher the nature of the political challenges in the banking sectors of South Africa. A general inductive analytical approach to data collection and analysis was adopted. Data were collected and analysed through an analytical framework that the study developed. Thus, a framework developed to better conceptualise the current state of knowledge was used as a guide to develop the analytical lens through which the present feedback were analysed. A thematic analysis approach was regarded appropriate in order that the nature of the political challenges could be understood in a richer context.The outcome from this study is a new framework of political challenges and risks, developed to demonstrate that South Africa has its own unique political factors that impinge on business operations. The framework comprises of a web of interconnected themes, namely; socio-economic challenges, government institutions, political corruption and regulatory frameworks, which together, help paint a rich picture of the political investment climate of South Africa. Further, the framework dissects the political challenges to reveal their complex nature in terms of the sources, events constituting political challenges, and the subsequent impact on the operations of banks. The framework has also been linked and argued for in the light of the political challenges and risk classifications suggested in literature, which successfully helps locate this study within the FDI determinants body of literature. By so doing, the framework tries to shed light on the political investment climate of South Africa to foreign investors, thereby advancing knowledge on bigger and important phenomena of FDI determinants in South Africa.The thesis therefore fills the gaps in knowledge that resulted mainly from treating Africa as one huge country, as it reveals the existence of the political investment climate obstacles that are unique to South Africa and have not been exposed in such a manner, hitherto this study. As a way forward, the study suggests for future research, focused research to expand knowledge on the various investment climates in Africa, in order to understand better, and to theorise sufficiently, the actual nature of challenges that impedes investment operations. Such specific knowledge is critical to the understanding of conditions favourable to FDI flows to African locations.