An Assessment of the Accelerated and Shared Growth Initiative

Using a comparative static economy-wide policy model, the authors evaluate an infrastructure investment program for its impact on the South African economy. The infrastructure investment program is loosely based on the Accelerated & Shared Growth Initiative for South Africa (ASGISA). In addition to the usual demand side injections, particular attention is paid to supply side impact of the investment program, productivity enhancement and skilled labour shortages. The national accounting consistency requirements of the modeled economy dampen the final impact of the demand injection considerably. Although productivity enhancement will have an additional positive impact this will be reduced by skilled labour shortages.