Growth in gross fixed capital formation is currently led by state owned enterprises, but for South Africa to reach its growth potential the private sector’s role is essential. In general, the private sector contributes around two thirds of such investment.
Gross fixed capital formation as a ratio to GDP presently stands at 19 per cent, down from a high of 23 per cent in 2008, and compared for instance with that of Indonesia, a fast-growing emerging market, where it stands at over 30 per cent. South Africa’s infrastructure programme will have benefits for many sectors in the economy.