Public Infrastructure, Private Capital Formation and Growth in Tanzania

Using time series data over thirty years’ period (1990-2020) and applying vector autoregressive (VAR) model, this study investigates the impact of infrastructure investment and stock into private capital formation (investment), private capital stock and economic growth in Tanzania. The descriptive statistics shows that, on average, total government expenditure is three times larger than capital expenditure, accounting to about 31 percent; and of the capital expenditure, infrastructure expenditure account to about 41 percent; while of the infrastructure expenditure, spending on roads and bridges construction account to more than 60 percent.

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