Resource sector concessions and spatial development in Southern Africa

Arbeitspapier

This paper explores how Southern Africa can leverage its mineral resources to support growth and industrialization. It considers the aggregate and spatial effects of transport infrastructure improvements, and the relative benefits of financing these investments through resource sector concessions versus government expenditure. Using computable general equilibrium analysis, this paper simulates and compares the effects of (1) royalty rebates for infrastructure; (2) zero royalties for infrastructure; and (3) government revenue-financed infrastructure improvements in South Africa and the rest of Southern Africa. The findings suggest that infrastructure directly financed through government royalty revenue has stronger spatial and aggregate effects than concession-based investments. Nonetheless, concession-based investments are less distortionary and crowd-in private investments. Infrastructure improvements, regardless of the method of financing, stimulate activity in non-mining sectors, but sectoral changes are significantly different for South Africa and the rest of Southern Africa. The choice of financing depends on the objectives of the implementing government.

Object Details

• ISBN: 978-92-9256-820-7
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2020/63

Classification and Topics

• Classification: Wirtschaft ; Computable and Other Applied General Equilibrium Models ; International Investment; Long-term Capital Movements ; Exhaustible Resources and Economic Development ; Public Facility Location Analysis; Public Investment and Capital Stock
• Subject: computable general equilibrium ; infrastructure ; resource sector

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Halstein, Joan
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2020

Further information

• DOI: doi:10.35188/UNU-WIDER/2020/820-7
• Handle: http://hdl.handle.net/10419/229287
• Last update: 10.03.2025, 11:44 AM CET