Abstract
M.Comm.
International studies have indicated that a high ratio of investment relative to Gross
Domestic Product (GOP) is one of the most important preconditions for achieving sustainable high economic growth. For the South African economy to achieve a high employment and economic growth rate, it requires two further important factors, namely a sustained increase in productivity and an expansion of production capacity.
Poor levels of investment performance, coupled with a lack of skilled labour, are the main reasons for restricted expansion in the country's growth potential and declining job opportunities. Keynes, (1936:30) argued that employment cannot increase without investment increasing, and strongly declared that the level of investment determines the level of employment. In his analysis, Keynes (1936:30) concluded that investment is a driving force for economic growth. Investment expenditure can be divided into four
categories:
- infrastructural investment in the public sector;- infrastructural investment in residential construction; - business fixed investment; and - the net change in the business inventories.
This study examines Gross Domestic Fixed Investment and focuses mainly on private
fixed investment as a driving force for economic growth for many years, GOP growth has been declining; unemployment has increased...