Zim’s infrastructure growth hailed

24 September 2012

The Herald: ZIMBABWE’S level of infrastructure growth is the same as that of neighbouring South Africa, PTA Bank president Mr Admassu Yilma Tadesse said in Harare last week. Mr Tadesse told delegates to the ZimBuild Infrastructure Financing Conference that this was reflected in the country’s fixed capital formation figures, which he said were looking “pretty good”.

Gross fixed capital formation (GFCF) is a macro-economic concept used in official national accounts to statistically measure the value of acquisition of new or existing fixed assets by the Government and the private sector.

It is a component of the expenditure on Gross Domestic Product, showing how much in new value addition in the economy is invested rather than consumed.

“Zimbabwe’s fixed capital formation has significantly increased from around 15 percent in 2009 to about 22 percent today, which fares very well with that of South Africa,” he said.

An ideal situation is that fixed capital formation should be around 30 percent.
Mr Tadesse noted that the public sector had boosted its contribution to the fixed capital formation since 2009, while that of the private sector had declined during the same period.

“Fixed capital formation in the country has largely been driven by the public sector, as we are seeing a lot of investment coming through from the public sector.

“The private sector’s contribution to fixed capital formation has, however, been flat for the past three years, and is expected to decline for the current period,” he said.

But indications appear to be positive in respect of the private sector’s contribution to fixed capital formation in the upcoming year, as investment group Old Mutual has said it plans to invest US$100 million in infrastructure next year.

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Category: General

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