Relationship between public investment and economic growth

First of all, before looking at the relationship between public investment and economic growth in Africa, it is important to first know exactly what is public investment really means and what is economic growth and finally to know the state of economic growth in  Africa.

Public investment, when we say public investment we mean government investment in various spheres within the country and this investment is not for the benefit of government, although in one way or another government can benefit by investing in that field, for example the government has decided to build XY roads. Here the government does not bring in revenue by repairing this XY road but this action of repairing that roads may attract foreign investors because of the quality of the transport infrastructure.

Economic growth, in simple terms we can say this is the state of income growth and living conditions of the people as well as the country itself, and this growth has several indicators to look at, for example the labor market for citizens, GDP, proportion between those haves and the have-nots, the production of goods as well as the importation and exportation of goods in and out of the country, if these things are  growing in the country in good proportions then we say the economy in that country is growing.

Let’s focus in one country in east Africa, for example Tanzania is one of the countries in Africa whose economy is slowly recovering, however this is due to the efforts that the government is taking in investing in different social spheres, for example logistics and transportation infrastructures, improvement of whole education system, the improvement of communication infrastructure, the improvement of health services and other services alike.

Actually there is relationship between public investment and economic growth, specifically in two perspective which are efficiency and in productivity, this is because the government improve the whole community infrastructures the more facilitating operation of stakeholder and lets Looking at the system used by the government in investing in social development in simple language we can say that this system is not bad but needs to be further improved to give Tanzania enough momentum in growing its economy and the lives of its citizens in general. For example, the entire education system in Tanzania is not in line with the growth of technology in the world, so improvements need to be made, the logistics and transportation infrastructure of our country has not yet met the needs of the people.

However, when public investment is established in proper way, it will have a profound effect on society and the nation as a whole, for example the job market in any country relies heavily on private sector investment but the private sector cannot be improved if  the whole government investment system if it is bad, the government should keep a good infrastructure environment to attract foreign investors from abroad and within the country to come and invest to provide employment opportunities for citizens, by doing so even the economic growth for the host country will be in good position.