Data from Statistics South Africa shows that there has been very low growth of the capital stock and declining investment in the South African economy since 2010. There is a lot of heterogeneity across industries, with the capital stock growing rapidly in the electricity and water industry, but declining rapidly in business services. Capital expenditure has been declining in many industries, notably electricity and water and mining and quarrying and business services.
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Note that it is likely that the efficiency of Eskom assets has declined over time with the decline in the energy availability factor and cost overruns, so that a (deflated) rand of investment in energy assets likely produced less output in 2021 than it did in 2010. This is also likely a more general phenomenon. Apart from a decline in investment, there is mounting evidence that the efficiency with which the capital stock is being used in South Africa has been declining. I will be posting a series of blog posts on these issues in coming weeks, and hope to update earlier estimates I produced in a SARB working paper soon.
