عوامل موثر بر سرمایه گذاری مستقیم خارجی در شرکت های خدمات مالی آفریقای جنوبی در منطقه جنوب صحرای آفریقا

This research investigates the key elements that South African financial services firms consider before making foreign direct investments in Sub-Saharan African (SSA) markets. The results show that South African financial services firms are most strongly influenced by the political and economic stability of the country in question as well as the profitability and long-term sustainability of its specific markets. The degree of available infrastructure in terms of Information and Communication Technology as well as the existence of credible financial systems was also viewed as highly important considerations before investing in SSA. Given the uncertainty and ambiguity of most SSA markets many South African financial services firms prefer to enter existing markets via a majority stakeholder joint venture with a local partner or via a new investment if the market does not currently exist. The nature of the financial services firm also seems to influence the entry method and once in a new country most firms seem to prefer a full service presence. Additionally, the key motives cited for expansion northward were to broaden revenue bases and improve profit margins as well as to stay close to local customers.

Africa is opening up to international business on an unprecedented scale. In many respects it represents a frontier to global capital which is seeking out new, growing and emerging markets. While Africa is still very much on the periphery of world markets and remains a tiny player on the international stage, it is beginning to actively court foreign companies and has done so by addressing the institutional business environment. Africa is perceived by foreign entities as a high risk, relative to returns, location. But Africa is changing, and it is the right time to reconsider the latent potential of this vast, untapped market of 850 million people. There is money to be made on this continent, and indeed the returns on investment are already substantially higher here than anywhere else. More importantly, the risk associated with doing business in Africa is declining as the institutional environment becomes more predictable and familiar (Luiz, 2006). South Africa clearly has economic hegemony on the continent and is increasingly seen as the launch platform for investment in Africa. For example, the 53 African countries had a combined GDP in 2003 of $653,570 million of which South Africa contributed $187,116 million (29%) of the total (despite only having 5% of the land surface and population) (Luiz, 2006). The purpose of this research is to determine what factors influence South African financial services firms to invest in Sub-Saharan African countries, what the relative importance of those factors is and what some of the methods and motivations behind these foreign investments are. The paper begins with an overview of the importance of FDI to SSA with a particular focus on recent regional trends and the financial services industry and provides the theoretical framework. This is followed by the results of our survey conducted on South African financial firms investing in SSA and an examination of its broader implications for international business.

With local South African markets opening up to global players in recent years and fast becoming cramped with competition and more limited in opportunity, many South African financial services firms are looking northwards to develop fresh opportunities in new markets. Despite higher risks, many of these markets show much higher returns and offer an opportunity to broaden revenue bases. Our results indicate that the following are seen as the most important factors to take into account when investing in SSA: • Country governance and political risk; • Market size and demand conditions; • Infrastructure considerations; and • Economic environment/macro-economic performance. The factors highlighted in this research indicate positive changes to the investment environment in SSA—political risk has declined, country governance improved, major infrastructure development is underway, sound economic policies are being adopted, and the market is growing. Multinational corporations planning to invest in SSA will usually enjoy capabilities and capital that will place them in good stead in these markets, and hence the chief challenges are contextual related to the environment of business. They are likely to have superior products and services and their success in these markets will thus be related to their ability to translate their traditional recipe into a milieu in which nothing can be assumed and everything is in flux. The political environments change rapidly with the accompanying dramatic swings from conservative to populist type economic policies, where infrastructure deficiencies mean that scaling up is difficult, and where bribery to get things done is often the norm. This means that it cannot be business as usual in SSA for a foreign investor. For example, it may be necessary to put the actual infrastructure in place as part of one's overall investment strategy if the country does not have it in place. Likewise, given the fluid political systems the importance of relationship building becomes essential. Foreign companies need to anticipate the implications of these environments in transition and their strategies and operations must be kept flexible. It often requires a highly decentralized approach which allows the local management to make decisions rapidly as the situation changes. But as the South African experience into SSA has demonstrated it can also be highly profitable if companies are willing to learn and adapt. It is the right time for international business to take a close look at a continent which has had a difficult recent past but where the conditions for growth, development and profits have never looked better. The institutional environment has improved, a major democratic wave is underway and international business is being welcomed. SSA does not provide the risk profile today that it did three decades ago. The principles of good management apply universally and in this respect doing business in SSA may appear to be like doing business elsewhere—with some nuance. However, having said that it is undoubtable that the business environment (including the social, economic, legal and political) is highly complex in SSA because of the continent's unique history, diversity, geography, political and institutional landscape, etc. (see Luiz, 2006 and Grobbelaar, 2006). The potentially higher risk in SSA is matched by significantly higher returns and this has seen a recent scramble for quality assets as companies recognise the potential of these large untapped markets. Incomes are rising and soon the large population will translate into significant consumer markets. Business will have to look at SSA sooner or later as markets become saturated elsewhere. Getting in early has advantages in that it allows one to capture market share and establish brand loyalty and distributions chains, etc. before one's competitors and indeed we are seeing great results for many multinational corporations already doing business in SSA with minimal investments.