Journal of Applied Sciences1812-56541812-5662Asian Network for Scientific Information10.3923/jas.2002.51.55Helena van Zyl 1200221The majority of African countries has a problem to attract sufficient capital, and especially foreign direct investment. The main reason for this situation is because they don’t have sound banking and financial systems. Despite the fact that South Africa has a relatively sound financial and banking system the capital flows are not correctly composed.]]>Calvo, G.A., L. Leiderman and C.M. Reinhard,1994125466Camdessus, M.,20002000Easterly, W. and R. Levine,19987120142Eichengreen, B., M. Mussa, G.D. Ariccia, E. Detragiache, G.M.M. Ferretti and A. Tweedie,1999Fischer, S.,1999109557576Fischer, S. and C. Lindgren,19981998Jones, S.G.,19981998pp: 148Guillaume, D. and D. Stasavage,1999IMF.,19981998IMF.,19991999pp: 201201IMF.,1999pp: 217pp: 217IMF.,2000Institute of International Finance, Inc.,2000Kapstein, E.B.,199246265287Devesh, K.,1998111114129Malcolm, K.,19982611851200Makin, T.,199922407419South African Reverse Bank,19991999South African Reverse Bank,20002000South African Reverse Bank,19991999Singh, K.,1999World Bank,1997