Estimates from the Conference Board indicate that capital deepening has been the primary driver of GDP growth in South Africa, contributing well over 2/3 of all real GDP growth. Their analysis suggests that improvements in labour quality have had minimal impact on growth, while total factor productivity (TFP) growth has been negative on average since 1994. This finding aligns closely with the constant elasticity of supply production function estimates presented in this paper. South Africa’s weak investment and productivity growth matters because over the long term these are key determinants of a country’s per capita income.
