Savings and Investment Dynamics in South Africa

This paper reviews savings and investment dynamics in South Africa in order to enhance the understanding of savings-investment gap in the country. This is achieved through an analysis of savings and investment trends, policy initiatives implemented and challenges faced. The study finds that saving rates in South Africa have been generally low, while investment rates have been erratic over time. Both variables display a rising trend from 1960 into the 1970s. However, by 2015 the savings rate had decreased significantly, while investment rates were relatively low and erratic when compared to the period between 1964 and 1984. The study recommends that polices that are aimed at strengthening corporate savings, while simultaneously bolstering household and public savings, should be implemented. The study recommends that polices that are likely to boost the cost of capital and returns on investment should be implemented to make the country more attractive to foreign direct investment