The Macroeconomics of South African Economic Growth

Abstract

Abstract: Covering the period 1994 to 2019, this chapter shows that between 1994 and 2008 South Africa’s growth performance improved and that this improvement was to a large extent driven by an improvement in total factor productivity (TFP). However, since 2008 South Africa’s growth performance has deteriorated significantly. The chapter shows that the deteriorating growth performance was accompanied by the deterioration of TFP, and argues that lower private-sector investment levels, combined with low levels of human capital development and a lack of international competitiveness, constitute the causes of lower productivity and economic growth. This chapter also explores the various growth policies put forward since the mid-1990s to improve economic growth. These include labour-intensive growth, export-driven growth, and investment-driven growth. The chapter argues that the implementation of a well-designed combination of these policies will be needed to attain higher levels of economic growth.