Abstract
In this present paper we investigate the relationship between mining infrastructure and economic growth in South Africa from 1980-2013. The importance of this paper is to examine if there is both short and long run significant relationship between mining infrastructure and economic growth in South Africa. The data mining was collected from South African Reserve Bank (SARB) covering the range from 1980-2013 of the paper. Both Augmented Dickey Fuller (ADF) and Phillip Perron (PP) where used for stationarity tests. Johansen Cointegration test is employed in this paper; also Vector Error Correction Model (VECM) is also employed in this paper. In the results we obtained that there is a positive significant relationship between mining infrastructure and economic growth. There is also a causal relationship between mining infrastructure and economic growth, meaning the development of mining infrastructure does promote economic growth. In conclusion the policy makers should improve private infrastructure which will equip human capital to be more useful in contributing towards knowledge and innovation. This means South African government and mining industry should priorities the development of infrastructure as component that will be sufficient towards economic development.
Highlights
The relationship between infrastructure and economic growth has been one of the most important topics to be discussed in recent years both academics and policy makers
This has been the case for the South African economy as it is largely linked with the mining sector
The promotion of Infrastructure remains to be the challenge in South Africa, upholding the progress of economic growth to be stable in order to correct the triple challenges
Summary
The relationship between infrastructure and economic growth has been one of the most important topics to be discussed in recent years both academics and policy makers. This has been the case for the South African economy as it is largely linked with the mining sector. The promotion of Infrastructure remains to be the challenge in South Africa, upholding the progress of economic growth to be stable in order to correct the triple challenges In this instance, the mining sector has not been delivering more in terms of generating infrastructure more especially within the regions where mines are located. There have been various arguments concerning the level of maximum output generated by infrastructure
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