Abstract
South African economy comprises of a narrow range of exports and an over-dependence on the primary production. These challenges hindered the growth and development of the country as well as the continent. One of the ways to enhance growth and development is through the improvement of economic complexity which measures productive capabilities of sophisticated products that countries export. The study seeks to find the role of investing in infrastructure development has on economic complexity using South African data. The autoregressive distributive lag approach was employed using yearly data spanning from 1960 to 2018. Results indicate that investing in government economic infrastructure has a negative and robust impact on economic complexity. Investment on government social infrastructure and public corporations’ infrastructure can positively influence economic complexity. It can be recommended that there should be policies to support industrial development that targeted incentivising economic infrastructure development. The development should prioritize specific geographical areas such as special economic zones to improve the lives of citizens, boost the economy, attract foreign direct investment and create jobs.
Highlights
In the increasingly volatile global political environment, the mobilising of the financial resources for use in the infrastructural projects is a complex and challenging exercise (Tyson, 2018)
The novelty of this paper is to provide insights into South Africa’s development placing evolution on infrastructure investment, and this relationship will add to literature as there are limited studies on the concept of economic complexity
To find the role of investing in infrastructure development on economic complexity, this section presents the findings as estimated using the e-views software
Summary
In the increasingly volatile global political environment, the mobilising of the financial resources for use in the infrastructural projects is a complex and challenging exercise (Tyson, 2018). The African governments have become innovative and entrepreneurial, on the back of the political will, and accountability from their governments. This is backed by sound public-private-partnerships that are premised on the interest of their citizens (PricewaterhouseCoopers (PwC), 2014; National Development. This brought attention to the emerging concepts of economic complexity that deals with goods and services that an economy produces and export (Hidalgo & Hausmann, 2009). Economic complexity as an economic development tool measuring what refined productive capabilities a country can export and is reported as economic complexity index (Hidalgo & Hausmann, 2009; Bhorat et al, 2019).
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