Economic growth hinges on development across various sectors within the country. Development funding can fast-forward widespread economic growth by giving the necessary funds to build public infrastructure and invest in public services. This, in turn, will have a positive effect on not only the economy but also on the country’s individuals and businesses alike. In this article, we will discuss the widespread economic benefits that development finance can bring to a country's economy.
Why is development funding needed for economic growth and development in South Africa?
Economic growth by means of development is needed for widespread economic growth within communities. This is because economic development is needed to create new job opportunities within communities, facilitate an improved quality of life for all residents, and generate greater funding for the country, which can then be reinvested back into the economy and lead to widespread economic growth.
Investing in development funding is one of the main factors needed in order to achieve economic growth, and access to development finance institutions is available to promote development funding within the country.
How development funding can enable widespread economic growth
Economic development plays an integral role in any country's economy. Investing in the development of public infrastructure and services can lead to widespread economic growth by having a positive impact on the country. Below are the benefits listed and how development funding can fast-track widespread economic growth in countries.
By creating job opportunities
Building public infrastructure will not only create employment opportunities during the planning and execution of the project but also after the final result. Adding more infrastructure, whether communications, ICT, or transportation, will increase the need for skilled workers, give employment opportunities where there were previously none to very few, and supply the nation with the necessary tools to promote economic growth.
Creating job opportunities by building public infrastructure is of vital importance in order to continue with economic growth and ensure a sustainable and successful future for both the country’s economy and citizens alike.
By increasing industry diversification
An integral part of economic development is the diversification of industries within the economy. This will reduce a country’s vulnerability by adding more revenue streams from across industries instead of relying on a single industry for the economy’s revenue. Having multiple industry opportunities protects the economy from relying on a single industry for revenue, and this is especially important due to the everchanging society we live in. As Covid-19 has proved, it’s better to not have all your eggs in one basket in case of a state of emergency and the downfall of industry needs.
By developing public infrastructure, it’s possible for industry diversification which comes with many benefits. Not only does it protect an economy, but it also offers ample opportunity for growth and development within the economy. Industry diversification needs investment in order to be successful; therefore, economic development may require government encouragement of new industries in different sectors through development finance.
By improving quality of life
Economic growth is one of the most powerful tools needed in order to reduce poverty and improve a nation's quality of life, especially in developing countries. Developing public infrastructure in previously disadvantaged areas can promote an influx of job opportunities as well as give underprivileged communities access to a better standard of living through providing better education, health care, and more public services to the people.
By adding capital
Strong economic growth in a country will encourage local investments as well as attract foreign investments due to the positive state of the economy. Receiving capital from local or foreign development finance institutions will continue to help the widespread economic growth which first attracted the initial capital and continue to have positive effects on the economy. This could lead to a cycle of continued widespread economic growth.
Investing in public infrastructure is a long-term goal needed to create widespread economic growth within the country. Economic growth is dependent on the development of infrastructures across various sectors. This is due to countries needing the right public infrastructures in place in order to create growth opportunities within the economy. Without funding, the development of public infrastructure will be heavily delayed, and economic growth negatively affected by the lack of infrastructure. Investing in public infrastructure and services will create both growth and job opportunities across the country and lead to a better future for all.