A Computable General Equilibrium (CGE) Analysis of the Expenditure on Infrastructure in the Limpopo Economy in South Africa

The Limpopo Province is one of the poorer provinces in South Africa, facing the challenges of poverty, inequality and unemployment. To address these challenges the national government of South Africa has embarked on a massive infrastructure program. Our literature review confirmed a positive link between infrastructure development and economic growth. One of the key infrastructure projects that will be implemented in the Limpopo province is the building of a railway line to link the mining belt in the province to the Richards Bay harbour. The coal in the Limpopo province is also a strategic resource that is needed to fuel the coal fired power stations in the neighbouring Mpumalanga province. The short run and long run impacts of the proposed railway line have been simulated using the TERM CGE model.