The impact of infrastructure investment on economic growth in South Africa
The South African government has, in recent years, set up various economic and social infrastructure programmes in an attempt to curb the country’s infrastructure deficit and hence accelerate economic growth and employment creation as prescribed by the national growth path (NGP), national development plan (NDP) and other authoritative documents. This research study uses single and multiple equation methodologies to provide an econometric assessment of the impact of government economic and social infrastructure investment on South African economic growth for the period 1983 – 2013. This study does so by ascertaining the relationship between these two forms of infrastructure investment and economic growth and analysing their impact on other macroeconomic variables such as private investment and employment. Overall findings reveal that in the long run, economic infrastructure investment is an important determinant of growth while social infrastructure investment crowds-out economic growth and private investment. The causality patterns found in this study suggest that growth tends to cause economic infrastructure investment. Conversely, no causal linkages were detected between growth and social infrastructure investment.
economic growth --infrastructure investment --South Africa
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