3, 0 per cent, with the latest forecast of the bank being 2, 8 per cent. this followed successive downward revisions during 2011 as the european crisis intensified. since the 2009 recession, growth has been driven primarily by household consumption expenditure, which is clearly an undesirable and unsustainable growth path. emphasis must be given to ensure that growth is driven by investment. there are, however, signs that investment expenditure growth is gathering pace, and this will be reinforced if the proposals around increased infrastructure expenditure are followed through on. according to the latest budget, public sector projects totaling r845 billion have been approved for the mtef period. this emphasis on infrastructure investment is appropriate as it is likely to contribute to improved economic efficiencies and helps with the alleviation of existing bottlenecks in the economy. but the focus on infrastructure is not new, and the plans have often not met expectations, particularly since the 2010 world cup. for example in 2009 / 10, only 83 per cent of the amounts budgeted for infrastructure was spent. in 2010 / 11, this had declined further to 68 per cent. importantly, it is not only the government and state - owned enterprises that need to invest. michael spence, the respected growth theorist, in his book “ the next convergence ”, has shown that countries which have sustained growth rates of around 7 per cent or more for 25 years generally have government and public sector investment ratios of between 5 and 7 per cent of gdp, and total investment rates of at least 25 per cent of gdp. why emphasise a target of 7 per cent growth per annum? because a consistent growth rate of 7 per cent will allow for a doubling of income every 10 years, whereas a growth rate of 3 per cent will take 24 years to double incomes. south africa ’ s gross fixed capital formation as a percentage gdp averaged around 15, 5 per cent in the decade from 1994 and then accelerated to peak at around 23 per cent in 2008. this positive trend coincided with economic growth rates in excess of 5 per cent and a decline in the unemployment rate to 21, 9 per cent by the fourth quarter of 2008. since the crisis, this investment to gdp ratio has declined and in 2011 averaged around 19 per cent. between 1994 and 2007, government and public sector investment averaged 4, 4 per cent of gdp, but since 2008 it has averaged 8 per cent. we can conclude from this that the lack of investment is not simply a problem of government failure to

##listed renewable energy infrastructure, ie a 50 percent stake in the world ’ s next largest offshore wind farm off the dutch coast. unlisted renewable energy infrastructure is still a relatively new area for norges bank. we intend to build up the portfolio gradually, primarily through investments in wind and solar power. we will prioritise investments that contribute to improving the overall risk - return tradeoff in the gpfg. management of the gpfg is to be cost - efficient, and the executive board monitors cost developments closely. earlier this month, norges bank announced a revised strategy describing how we will fulfil the investment mandate ahead. the strategy plan expresses our ambitions and our overall aim of achieving the highest possible return after costs. our ambitions are high. as they should be. nonetheless, we still aim to be a small, flexible and cost - efficient organisation. 2 / 2 bis central bankers'speeches