Costed Action Plan for SADC Industrialization Strategy and Roadmap If investment levels were to remain at those for the 14 years to 2014, while investment efficiency as measured by the capital-output ratio remains unchanged, SADC will fall well short of the Industrialization Strategy and Roadmap indicative goals. To approach the Roadmap targets, the region must both invest more – a minimum of 33 percent of GDP - and invest more efficiently to bring the amount of capital required to increase GDP by one percent to around 4 percent of GDP. If those two targets could be met, GDP growth would rise to around 8 percent annually, which with two percent annual population growth would result in per capita incomes growing by some 6 percent a year. While there are substantial country-to-country variations, the data in Table 7.1 which are no more than indicative, suggest that for the region as a whole, about two-thirds of fixed investment is undertaken by the private sector and one-third by the state. The bulk of state-funded investment is in physical infrastructure and social overhead capital (education, training, health, and housing). About one fifth of all investment – public and private – is funded from FDI, primarily in productive projects. In 2014, SADC GDP was estimated at $706 billion, which means that if fixed investment had reached 33 percent of GDP it would have totalled 233 billion (Table 7.2). In that year gross domestic savings in SADC reached $150 billion while net FDI contributed a further $3.3 billion leaving a funding gap of some $80 billion or 11.3 percent of GDP. Table 7.2: SADC: Financing Gap (2014) SADC (o/w) South Africa (o/w) Angola (o/w) Other 13 GDP ($ billions) 706 350 148 208 Investment $ billions 167 73.4 35.8 57.8 % of GDP 23.6 20.9 24.2 27.8 Gross Domestic 150.0 65 59 26 Savings % of GDP 21.2 18.6 40.0 12.5 Net FDI 3.3 -1.4 -8.6 13.3 % of GDP 0.48 -0.4 -5.8 6.4 Target: Investment 233 116 49 69 (33% of GDP) Financing Gap* 80 52.4 (3.2) 36.6 Of GDP 11.3 15.0 (2.2) 17.6 Current Account 43.0 19.1 3.7 20.2 Balance of Payments Deficit % of GDP 6.0 5.5 2.5 9.7 Sources: SADC: SADC Year Book (2014); World Bank: World Development Indicators (2016) * Financing gap = Target investment- (Gross Domestic Savings + Net FDI) The net FDI figure for 2014 is seriously distorted by the outflow of $8.6 billion (outward investment by Angola or disinvestment from that country). If Angola is excluded, the net 55