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An Assessment of South Africa's Investment Incentive Regime with a Focus on the Manufacturing Sector

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  • Paul Barbour

Abstract

This paper investigates whether South Africa’s tax incentives have been effective in generating additional manufacturing investment (both local and foreign direct investment). South Africa’s investment incentive regime compares favourably with international best practice. However, the qualitative and quantitative evidence reviewed supports the hypothesis that the impact on manufacturing investment has been negligible. The paper concludes with some recommendations for the way forward, notably to rationalise the number of incentives and to move away from the use of discretionary allocation systems.

Suggested Citation

  • Paul Barbour, 2005. "An Assessment of South Africa's Investment Incentive Regime with a Focus on the Manufacturing Sector," Working Papers 14, Economics and Statistics Analysis Unit (ESAU), Overseas Development Institute.
    • Handle: RePEc:odi:wpaper:14
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    File URL: http://www.odi.org.uk/esau/publications/working_papers/esau_wp14.pdf
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    Keywords

    South Africa; investment incentives; tax incentives; manufacturing; METR analysis;
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