The role of mining infrastructural development on economic growth in South Africa form (1980-2013) : an economitric approach

Abstract

In the study we investigate the relationship between mining infrastructure and economic growth in South Africa from 1980-2013. The importance of the study 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 study. Both Augmented Dickey Fuller (ADF) and Phillip Perron (PP) where used for stationarity tests. The study used 5% critical value to analyse the results obtained from the study. Johansen Cointegration test are employed in the study, also Vector Error Correction Model (VECM) are also employed in the study. 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.