Dr. Wolassa Kumo
Introduction

Fixed capital has long been considered as an engine of growth both as a factor of production and as an embodiment of technological progress. Countries that had made sustained accumulation of fixed capital were able to achieve higher and sustained economic growth and development while those who had not lagged behind. For instance, economic development in Sub-Saharan Africa has been severely constrained by inadequate saving and investment, among other things. The average annual gross domestic saving rate by 41 sub Saharan African countries during the period 1980-2010 was as little as 14.3% of GDP while the average fixed investment was 20% of GDP for the same period. Therefore, sub-Saharan Africa’s burgeoning debt was not primarily meant to finance investment as the saving- investment gap was only about 6% of GDP during the past three decades.

Sub Saharan Africa’s dismal average economic growth of about 3.8% during the past three decades was therefore a direct consequence of low saving and low investment. The Sub Saharan Africa average saving and investment rates pale in comparison to the saving and investment rates of the newly industrialized and emerging Asian economies, such as China, whose saving and investment rates of over 40% of GDP ensured real economic growth rates of over 10% during the same period, i.e. 1980-2010.

Average annual growth in Africa reached above 5% during the past decade following the commodity price boom since the early 2000s but was dampened by the global economic and financial crises during 2008-2009. Growth rebounded in 2010 and is projected to reach 5.5% in 2011 making sub Saharan Africa the second fastest growing region in the world following Asia.

However, heavy dependence on growth driven by improved commodity terms of trade subjects the sub continent to vagaries of global demand uncertainty. Unless improved commodity terms of trade translates into higher saving and investment, the sustainability of the current improved growth performance will be at stake. Equally important is the continuation of economic and political reforms that are required to enhance the participation of the private sector in economic development, and also improve productivity and investment efficiency.

This brief paper presents an overview of investment efficiency, savings and economic growth in 41 sub Saharan African countries for the past three decades using data from the IMF, World Economic Outlook Data Base, April 2011. Six countries have been excluded from the analysis for lack of consistent time series data. These are Djibouti, Liberia, Mauritania, Sao Tome and Principe, Sudan and Zimbabwe.

Investment Efficiency in Sub Saharan Africa

There are two broad concepts of efficiency: allocative efficiency and technical or production efficiency usually measured by total factor productivity. Some empirical analysts use these broad concepts of efficiency to assess inefficiency in aggregate investment in terms of excess investment demand that captures the deviations of actual investment from the desired investment. These approaches usually use nonparametric methods, such as Data Envelopment Analysis (DEA), as well as, parametric methods including multiple linear or non- linear regression models.

In this brief article, we use a simple approach based on marginal productivity of capital, known commonly as the Incremental Capital Output Ratio (ICOR) to measure investment efficiency in 41 sub Saharan African countries for the period 1980-2010. ICOR is the ratio of investments in some previous period or periods and growth in output in subsequent period or periods measured at constant prices.

Growth in output is not attributed only to investment in fixed capital. It could be due to growth in productivity (partial or total factor productivity), increased use of labour input or improvement in the level of education of the labour force (growth in human capital), and/or improvements in productive capacity utilization. However, changes in fixed investment still explain a significant portion of growth in output particularly in developing countries with limited fixed capital stock and therefore the efficiency with which this input is utilized provides a useful clue about the correlation between the later and economic growth.

The higher the ICOR, the lower is the implied investment efficiency. That is fixed investment is more efficient if fewer dollars are required to generate a unit growth in output. The average ICOR for sub Saharan Africa for the period 1980-2010 was 5.23 and was comparable with the ICOR for of about 5 during the 1980-2003 period. This implies that fixed investment in sub Saharan Africa is pretty efficient and the level of investment efficiency in the sub region is comparable with that of China during the early two decades of its rapid industrialization. This is not only because the sub region is capital scarce but also because there have been marked improvements in business climate and political environment during the past two decades. Therefore, no wonder that foreign direct investment surged in Africa from less than US$15 billion in early 2000s to over US$80 billion in 2007 before the inflow was hit by the global financial and economic crises of 2008-2009.

While average investment efficiency in sub Saharan Africa is high, performance varies from country to country. The 41 countries in sub Saharan Africa can be classified into three groups based on their ICOR performance for the period 1980-2010: (a) those with ICOR value of 1-5, (b) those with 6-9, and (c)) those with ICOR values of above 10.

The majority of the 41 counties (i.e. 25 countries) in the sub region recorded higher investment efficiency during the past three decades. These countries include both the least developed countries with very low fixed capital stock base, as well as, some middle income economies with higher level of capital stock. These best performing countries with ICOR value of 1-5 are: Botswana, Cameroon, Central African Republic, Comoros, DRC, Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinean Bissau, Kenya, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Rwanda, Seychelles, Togo, Uganda, and Zambia. Most of these countries are not only face extreme capital scarcity but have also shown some progress in opening up their economies during the past 3 decades.

The countries with medium investment efficiency level of ICOR 6-9 include: Benin, Burundi, Cape Verde, Eritrea, Mauritius, Sierra Leone, and Swaziland. Mauritius is among the Upper Middle income countries and top reformers in the sub region. Lower investment efficiency may imply an over investment in the economy where marginal investment needed to generate a unit output was greater during the past three decades than during the earlier years of its economic expansion.

Investment efficiency was the lowest in the following countries during the past three decades: Angola, Chad, Cote d’Ivoire, South Africa and Tanzania. All of these four countries have experienced some form of economic and political upheavals during the past three decades. Preliminary data analyses showed that South Africa’s ICOR was comparable with that of China for the post-Apartheid period, but the number was very high for the pre 1994 period, i.e. 1980-1994 pulling the country’s overall performance significantly down. Investment efficiency was very low during the Apartheid rule in South Africa, due to global isolation and heavy state control over the economy. Thus if we exclude the pre 1994 period South Africa’s investment efficiency will fall within the first group of best performers. Poor performance by Angola, Cote d’Ivoire and Tanzania reflects the continued impacts of civil war and socialist mode of production in the case of the later which contributed to wasteful investment.

Investment required to achieve a minimum growth threshold of 7 percent

While Africa’s growth performance is the second best in the world at present, the continent still lags behind other regions in terms of socioeconomic development. Over 380 million people in Africa today live below poverty line, while youth unemployment is as high as 70% in some countries. Most economies are still heavily dependent on rain fed subsistence agriculture with extremely limited investment on irrigation. Weak economic structure reinforces poverty and poses a major risk to the sustainability of the current growth fuelled by commodity price boom.

African countries will not be able to address this fundamental economic challenge with current growth rates of 5% or less. They should achieve a minimum of 7% annual growth rate individually or collectively for the coming two decades to make a dent on poverty and unemployment. With an average ICOR of 5.23, the sub Saharan Africa region therefore requires a minimum fixed investment of 35% of GDP over the coming two decades collectively or by each country. Given the current actual average regional fixed investment rate of 20% of GDP, the desired investment rate of 35% over the coming two decades seems insurmountable, but not unrealistic. China’s economic growth during the past three decades was fuelled by fixed investment of over 40% of GDP. China’s massive investment was financed by extraordinarily high household and public savings which at times reached 50% of GDP. The major challenge for Africa, in this respect, is a culture of low savings, which we expound in the following section.

Saving-investment gap in Sub Saharan Africa

When domestic household and public savings fall short of the fixed investment needs of a country, this leads to a saving-investment gap. This gap is exacerbated when export earnings of a country fall short of import demand leading to a second, foreign exchange gap. Most developing countries in Sub Saharan Africa are often characterized by both gaps. Except five countries, i.e. Botswana, DRC, Gabon, The Gambia, Namibia, and South Africa, the rest of 41 sub Saharan African countries had an average saving -investment gap ranging from 1% to nearly 30% of GDP during the past three decades.

The saving-investment gap, however, significantly varies across the countries in the sub region. Countries that faced relatively lower saving-investment gaps ranging between 1-5% in the sub region during the period under review include Angola, Cameroon, Central African Republic, Comoros, Republic of Congo, Cote d’Ivoire, Eritrea, Ghana, Kenya, Mali, Nigeria, Swaziland and Uganda. The lower gap by some countries reflects increased savings from oil revenues, while lower gap by others simply mean lower level of investment.

Countries in the sub region with the average saving investment-gap of 6-10% during the stated period include Benin, Burkina Faso, Burundi, Central African republic, Ethiopia, Guinea, Guinea Bissau, Madagascar, Malawi, Mauritius. Niger, Rwanda, Senegal, Sierra Leone, Tanzania and Zambia, while those with average saving-investment gap of above 11% include Cape Verde, Chad, Equatorial Guinea, Lesotho, Mozambique, Seychelles and Togo.

The poor performance of the sub region in terms of the saving-investment gap reflects two major challenges: First, most countries are characterized by low saving and low investment and hence are at the risk of being trapped in vicious circle of poverty if the they do not raise their saving and investment rates immediately; and second if they raise their investment levels without a concomitant increase in domestic savings they may be trapped in vicious cycle of debt which could undermine the value of their investments, provided money borrowed is invested in economic development. Since the recent economic crisis proved that most of the aid pledged by non-African donors is unlikely to be delivered, the only sustainable solution to Africa’s development challenge is aggressive domestic resource mobilization for development. This could be supplemented by foreign direct investments, if the countries in the sub region speed up the current economic and political reforms.

Concluding remarks

Africa is rising. After 5 decades of civil strife and economic stagnation, the first decade of the 21st century shone a new light on the continent. Africa is no more a hopeless dark continent. Like its diamonds in the West, South and at the center, the continent is shining.

It is also shining as a second fastest growing continent in the world. However, there is no time for complacence as Africa is still the least developed continent in the world plagued with high level of poverty, unemployment, political instability and corruption. To sustainably address these fundamental socio economic challenges the region should at least grow by 7% per annum for the coming two decades. However, this is unlikely to be achieved with the current investment rate of 20% and the saving rate of 14% of GDP.

While the return to investment in Africa is high, it is such low levels of investment and saving that are holding the continent back. Given higher returns to investment, Africa’s economic transformation will depend on radical shift in the saving culture of its people, further economic and political reforms, and accelerated fixed investment.

   By: Jerry Okungu
Finally, the forces bent on toppling the strongman of Libya have entered Tripoli. With two of his sons reportedly captured by rebels, it is only a matter of time before the rebels lay their hands on the strongman himself.

Gaddafi was Libya and Libya was Gaddafi. Libyan oil money was his personal wealth.

With oil dollars in his pockets, he dazzled and mesmerized fellow heads of state in Africa making many of them literally eat from his palms. Time and time again, he bankrolled almost every AU summit in various capitals when the host country was cash strapped and could not bear the shame of hosting his peers.

When Gaddafi landed in any African country be it South Africa, Ghana, the Gambia, Uganda or Sudan, the colonel was the man of the hour. His entry was always delayed for maximum effect. He would come in dressed in flowing robes befitting his pet dream of becoming the King of Kings. His entourage, consisting of well trained and armed female body guards was equally ruthless; no one dared stand in the King’s way.

In a way King Gaddafi tried his best to imitate the way American presidents behave when they visit Third World countries. For the American presidential security detail, there is hardly any distinction between an African president and an ordinary public spectator. I saw it in Abuja when Clinton arrived there in 2000 on his first state visit soon after Obasanjo was elected the first civilian president in decades. The American Marines were so arrogant and intimidating such that the equally arrogant Nigerian security drew their guns warning that unless they backed down and played second fiddle in security arrangements then they were ready to call off the visit. The Americans backed down.

While on the same trip; Clinton visited Tanzania and specifically Arusha. Why he did so I cannot remember but it must have been some peace memorandum between either warring Sudanese or belligerent Somalis. When he landed, a number of IGAD presidents had gathered to meet him. Some of them were not even allowed to get closer to him, let alone greet him. It was America’s arrogance or was it their insecurity at its best?

A few years ago, I had the privilege to attend a number of AU meetings in Addis Ababa, Accra and Banjul. While in Banjul in 2006, Gaddafi arrived in a plane load full of white stretch limousines manufactured in America. These Limos were all offloaded in Senegal so that the King of Kings would snake his way in to the Gambian capital in style. As the convoy moved along, he stopped at every village market and dished out petro dollars to poor Africans along the way. Meanwhile his team of bodyguards and publicity handlers had combed the city for security detail as they splashed the entire city with Gaddafi’s life-size portraits. Any tourist visiting Banjul at the time could be forgiven for thinking that Gaddafi was the Gambian head of state or better still, he was running for election in that country.

I remember him making a grand entrance later in the day having missed the opening ceremony during the APRM forum when Rwanda and Kenya were being peer-reviewed. Instead of coming to sit in the hall, his aim was to attract media attention and disrupt the proceedings. No head of state raised a finger as far as I can remember.

During the same summit, he refused occupy one of the villas he had built for visiting heads of state on behalf of the Gambian president. Instead, he chose open ground and pitched tent like the Bedouin that he was. The following year, he threw tantrums at the AU Accra Summit over the seating arrangement. He insisted that he must sit alone in an enclosed area, far away from any other head of state. When John Kufuor of Ghana declined to grant him his request, Gaddafi stormed out and went to address university students at one of Accra’s campuses.

Gaddafi’s arrogance knew no limits. When his dream of forming the United States of Africa with him as the first Head of State failed, he hit the roof. This was despite having bribed many heads of state to vote in his favour. When he realized that fellow heads of state were not with him, he gathered traditional leaders across the continent, made them kings and forced them to declare him King of Kings!

Of all fallen despots of the continent, Gaddafi’s fall must have been the most painful of them all for Gaddafi. His pomp and glory could not be matched by Emperor Bokassa, Ben Ali, Hosni Mubarak, Idi Amin, Joseph Mobutu and Sani Abacha before him. He was the mightiest of them all and when his time came, he surely fell from grace to grass. The question to ask is this: Will the King of kings allow his enemies to capture him and try him publicly like his comrade Hosni Mubarak of Egypt or Ben Ali of Tunisia? Or, will he commit suicide like Adolf Hitler? Only time will tell.

   Dr. Wolassa Kumo
1. Introduction

Sub Saharan Africa is a home to 47 of the 53 countries in the continent. In 2009, based on GNI per capita, the World Bank classified countries into four categories: (a) low income, with GNI per capita of $995 or less; (b) lower middle income $996 – $3,945; (c) upper middle income, $3,946 – $12,195; and (d) high income, $12,196 or more. During the same year, 31 of the 47 countries in Sub Saharan Africa were low income economies. These countries include: Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo (DRC), Djibouti, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Somalia, Togo, Tanzania, Uganda, Zambia, and Zimbabwe.

The rest of the sub Saharan African economies belong to middle income and higher income groups. About 10 countries have been classified as lower middle income economies. These include: Angola, Cameron, Cape Verde, Congo Republic, Cote D’Ivoire, Lesotho, Nigeria, Sao Tome and Principe, Sudan, and Swaziland. These are predominantly oil rich economies which recorded fastest economic growth during the past decade. Among the remaining six countries: Gabon, Mauritius, Namibia, Seychelles, and South Africa are upper middle income economies while Equatorial Guinea is the only non OECD high income economy from the African continent and is the richest country in Africa owing to the discovery of vast oil and gas reserves in early 1990s. With the third largest oil reserve discovered in the African continent, Equatorial Guinea is regarded as the “African Kuwait.”

Clearly, the sub Saharan African economies are heterogeneous and hence the old “Least Developed Country” (LDCs) classification does not reflect the reality on the ground anymore and must be abandoned with immediate effect. According to this outdated classification, many lower middle income countries are still classified as LDCs, while they have already surpassed the GNI per capita threshold. It is absurd to keep Equatorial Guinea in the least of LDCs due to the economic vulnerability and human development index while it has already achieved the high income status. Apart from this, many of the current low income economies have recorded remarkable economic growth since 2001 and hopes are high that they will catch up soon. The LDC classification holds connotations of backwardness and hopelessness for a continent which already suffers from huge image problems. Presenting a positive image about Africa is as important as the inflow of the development funds. Therefore, UNCTAD and other organizations that repeatedly emphasize about the LDC characteristics of sub Saharan Africa must adopt the more positive approach. At present , most sub Saharan African countries are either emerging middle income or developing low income economies, and as such must be classified accordingly.

The remaining parts of the article is organized as follows: section 2 scrutinizes the trends in real GDP growth in low income and lower middle income sub Saharan economies for the past decade. Section three reviews the challenges of commodity driven economic growth in these countries while the last section concludes the article.

2. The real GDP growth in low income and lower middle income sub Saharan economies

Many low income and lower middle income sub Saharan African economies recorded remarkably higher economic growth between 2001 and 2009. Based on the size of the annual average percentage change in GDP at constant prices between 2001 and 2009 (calculated based on the IMF World Economic Outlook Database, April 2010) the Sub Saharan African economies can be categorized into six groups: (a) those with real GDP growth above 10%, (b) those with 7.0-9.9%, (c) those with 5.0-7.0%, (d) those with 3.0-5.0 % , (e) those with ! 3%, and (f) those with !1% of GDP growth rates during the stated period.

The fastest growing low income and lower middle income economies between 2001 and 2009 were Angola and Sierra Leone with annual average GDP growth rate in excess of 10%. Equatorial Guinea, Africa’s only high income economy, was also the economy that recorded the highest growth rate during this period. These three countries were the top performers in economic growth in Sub Saharan Africa during the past decade and belong to our group (a) above. We may regard these economies as the “African Tigers” although the growth in Sierra Leone must be taken with caution as it has shown persistent decline during the past few years following volatility in its mineral exports.

The second group that closely follows the “African Tigers” is group (b) with annual average growth rates ranging between 7% and 9.9%. These countries include: (a) Chad, (b) Ethiopia, (c) Mozambique, (d) Rwanda, (e) Nigeria, and (f) Uganda. The growth in Chad and Nigeria is driven by oil exports while the growth in Mozambique is anchored by mineral exports. Rwanda and Ethiopia’s growth is propelled by a fast growing service export, while Uganda’s growth is based on export of agricultural commodities. Most of these six economies are on track to achieve the Millennium Development Goals of halving poverty in 2015 and if they sustain the current level of growth, they may graduate from the low income group in two decades or less.

The third group of medium growth low income economies include Burkina Faso, The Gambia, Ghana, Mali, Niger, and also Cape Verde and Sao Tome and Principe from lower middle income group. These economies grew between 5.0% and 7.0% for the period 2001-2009. The growth performance of many countries in this group was dampened by the recent global financial and economic crisis that led to sharp contractions in GDP in 2009. Within this group, Ghana’s growth is expected to improve faster following the recent discovery of oil reserves.

Many sub Saharan Africa countries, however, recorded real GDP growth rates of less than 5% on average for the period 2001-2009. These countries belong to the groups (d) with average growth of 3.0-5.0% including Benin, Botswana, Burundi, Cameron, DRC, Congo, Kenya, Lesotho, Malawi, Mauritius, Namibia, Senegal and South Africa; group (e) with average annual growth of Less than 3% including Comoros, Gabon, Guinea, Guinea-Bissau, Liberia, Madagascar, Swaziland and Togo; and group (f) with average annual growth of less than 1% including Central African Republic, Cote D’Ivoire, Eritrea, Seychelles and Zimbabwe.

Most of the lower and upper middle income sub Saharan African economies recorded growth rates of less than 5% per annum during this period. Some middle income countries experience similar challenges to those of low income economies such as high level of unemployment, low savings and investment and lower integration to the global economy among other things.

The worst performers in economic growth during the past decade, however, are: Central African Republic, Cote D’Ivoire, Eritrea, Seychelles and Zimbabwe. Although Seychelles is one of the upper middle income economies, its growth performance during the past decade was dismal owing to tight monetary policy, currency devaluation and large current account deficit, and declining private sector investment among others. Poor economic growth performance in Central African Republic, Cote D’Ivoire and Zimbabwe was linked to the continued political instability in the three countries during the past decade. In fact, Zimbabwe recorded decline in real GDP for the period 2001-2009 on average as a result of which the country has now been downgraded to low income country status. However, the recent positive developments in political climate are expected to improve growth performance in Zimbabwe going forward. Eritrea, which became independent from Ethiopia in 1993, did not live up to its promises with dismal growth performance of less than 1 % for the past decade unlike its bigger neighbor, Ethiopia, which recorded over 8% GDP growth during this period on average. The five worst performers have been characterized by macroeconomic and political instability and have to work hard to turn their economies around during the second decade of the century.

Economic growth in fast growing low income and lower middle income economies was largely driven by commodity price boom. Many analysts worry that heavy dependence on commodity may expose these economies to external shocks and may severely limit the sustainability of such growth. The next section highlights the challenges of relying on commodity driven growth in sub Saharan Africa.

3. The sustainability of commodity driven growth in sub Saharan Africa

Most of the low and lower middle income African economies that recorded higher growth during the past decade were either oil or mineral exporters. Economic growth driven by the commodity price boom exposes the economies to the external trade shock where growth prospects will be dependent on exogenous, foreign demand. However, the good news is that most of the commodity exports from these countries are going to China and India and other fast growing economies with insatiable appetite for raw materials. This is unlikely to change in the immediate future. Even then the African economies should not be complacent. The fundamental structural weaknesses of these economies must be addressed as a matter of urgency. Countries must revisit their industrialization strategy not only to raise the share of manufactures in total output but also to reduce the current high and unsustainable level of unemployment in these economies. This also requires transformation of the traditional subsistence agriculture that currently supports over 70% of the population in most of the low income and some of the middle income sub Saharan economies.

Another challenge is the low level of domestic savings. In most low and middle income economies in Africa the level of domestic savings is less than 15% of GDP as opposed to 40% in China. This implies that these countries rely on foreign capital to finance domestic expenditure and investment. Given the current low level of FDI attractions, this means that most funds come either in the form of aid or loans which may complicate development efforts by leading to dependency and debt traps. Related to this is the underdevelopment of financial institutions required to mobilize domestic resources for development.

Widening current account deficits particularly for non-oil exporting low income economies is another development bottleneck. While higher oil prices will spur growth in oil rich economies, it widens the trade deficits of non-oil and mineral exporting countries forcing them to borrow or depend on aid inflows to finance investment and other expenditure. In this regard, the challenge faced by non resource rich countries is formidable.

High level skills and technological gap constitute another critical challenge to sustainable development in sub Saharan economies. At present most of the sub Saharan economies face critical shortage of high level skills required to lead technological transformation. As a result, there is a growing technological gap between Africa and the rest of the world. To sustain the current growth moment African economies must spend an increasing higher resources on high level skills generation.

Last but not least, sub Saharan Africa faces massive infrastructure gaps. Roads, railways, airports, ports, energy, water and sewerage, and telecommunication are underdeveloped. Investment in economic infrastructure not only directly alleviates poverty by improving access to the services by the poor, but also fosters investment by the private sector, which is regarded as an engine of growth and development in market economies.

4. Concluding Remarks

After decades of stagnation, many sub Saharan African economies have recorded impressive economic growth for almost a decade. The continued discovery of oil and gas and other mineral resources in several of the low income economies coupled with the sustained rise in the prices of these commodities afforded great opportunity for growth and revival. The discovery of vast oil and gas reserves in the coast of Equatorial Guinea in early 1990s, ensured sustained and fast economic growth for over a decade as a result of which the country emerged as the only African and non-OECD high income economy. The discovery of oil reserves in Angola, Sudan, Chad, Ghana, in addition to the traditional oil exporters, Nigeria and Gabon buoyed the growth performance in these economies. This also implied improved accountability by resource rich countries compared to earlier years where revenues from oil have been vastly squandered.

The recently discovered coal reserves in Mozambique are considered to be one of the largest in the world. Sierra Leone and the Democratic Republic of the Congo are endowed with vast diamond resources while South Africa has over 40% of the World’s gold reserves. Zambia is the second largest producer of copper in the world, although its growth performance is far lower than many resource rich countries in the continent. Due to lack of political stability, the DRC has still remained one of the poorest countries in the continent with per capita income of less than US$140 in 2009 in spite of its vast mineral resources. The recent discovery of diamond in Zimbabwe provides a great shot in the arm for the economy if the rival politicians come to their senses and reintegrate the economy into the global market. Africa also has one third of the world’s cobalt, significant deposits of uranium and other strategic minerals, all of which will anchor the current growth momentum.

The expansion of service exports in place of traditional commodities by countries such as Ethiopia and Rwanda must also be encouraged as should Uganda’s innovative agriculture export led growth.

However, there still remains a lot to be done to ensure that the current impressive growth in sub Saharan economies are to be sustained and become catch-up growth. One of the most important strategic measures is an urgent diversification of the domestic output and export. Improved revenues generated through commodity exports must be wisely used to improve agricultural productivity, increase the size of manufactured output and create jobs.

Apart from this, governments must create conducive climate of doing business for the private sector, both domestic and foreign, through significant reductions in bureaucratic red tapes and improved investment in economic infrastructure as sustained economic development cannot be achieved without a strong and viable private sector.

Finally, the current macroeconomic and in particular monetary and fiscal policy resilience in many low and middle income economies must be maintained in the future. In particular, lower inflation rates, exchange rate stability, lower interest rates and improved tax revenues together with improvements in the performances of financial intermediation and capital markets will ensure that this time sub Saharan Africa will take off into self sustained development.

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They came to Green Point Stadium, Cape Town, in droves, the Boers — to cheer their team from the motherland.

The Boers are descendants of the Dutch-speaking settlers of the eastern Cape frontier in Southern Africa during the 18th century as well as those who left the Cape Colony during the 19th century to settle in the Orange Free State, Transvaal (together known as the Boer Republics) and to a lesser extent Natal. Their primary motivation for leaving the Cape was to escape British rule as well as the constant border wars between the British imperial government and the native tribes on the eastern frontier.

“It’s terrific, that was a great performance,” a visibly thrilled Arjen Robben exclusively told FIFA.com. Arjen Robben is the Dutch winger prone to writhing in pain as if hit by a bullet whenever he is tackled. A bamboozler extraordinaire.

Notable Boers include Louis Botha, first prime minister of apartheid South Africa (1910?9) and former Boer general, and the late Eugene Terre’Blanche, leader of the racist and white supremacist Afrikaner Weerstandsbeweging (AWB) political and paramilitary group.

With Germany looking terrific for today’s clash with Spain, I think we might be in for a 21st century Nazi-Boer war, so to speak, in Johannesburg come Sunday. [ Tunku Varadarajan on Why We Should Root for Germany ]

As for the Uruguay Cheats — Go Home! I stand with Ghana! [ READ MORE ]

   [ Enlarge ]

   Uruguayan Fan Thanking “The Hand of Satan” — Luis Suarez, Just Before The Dutch Hit Uruguay For 3.

Elsewhere, Argentina received an overwhelmingly warm reception upon returning home from their disappointing 4-0 quarterfinal loss to Germany. Still, coming to terms with not reaching their objectives is proving difficult for the team.

According to Argentine President Cristina Fernandez de Kirchner, her efforts to express her appreciation for the team’s efforts have so far been thwarted by Maradona’s tears and the squad’s undeserved feelings of shame.

Invitations to the presidential palace aside, President Kirchner says she couldn’t even get Maradona on the phone after the loss.

“I called him after his press conference on Saturday but he was not able to talk because he was crying,” she said.

“I offer my support because nobody has ever given as much pleasure on the pitch as Diego Armando Maradona.”

And then Pele chuckled.

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[ Papa Fidel Castro thinks refs are biased against South America ]
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As I watched the clinical Germans thrash perennial losers (the inventors of football) England, 4-1, I couldn’t help but think of poor U.S.A.

What went wrong?

Jurgen Klinsmann, the former German striker and national team coach, while color commentating for ESPN, hit the nail right on the head: “Unless Americans turn the game over to “inner city” kids from the “elitist” suburban kids — U.S.A soccer is going nowhere!”

Klinsmann was reiterating what the great Pele said years ago about U.S.A soccer — “the sons of soccer moms are no good, they are not hungry enough.”

On April 30th Klinsmann said: “U.S. soccer so far hasn’t found yet their real identity [regarding] how U.S. soccer should be played,” Klinsmann said. “I’m talking about a philosophy, a style of play, that kind of marks every nation. If you talk about Brazilian soccer, you know what you’re talking about; about Argentine–the passing game. …Everybody represents a specific style of play. I think in this country here, you’re not there yet.

“What style should represent United States soccer? I think that is a key component to what all is going on in South Africa,” added Klinsmann.

Right now the United States plays a soccer style much closer to the outdated anglo-saxon “kick and chase,” which has really never worked, despite the steamy over-hype of England’s lucky win over West Germany in the 1966 world cup finals.

The multi-cultural and inner city gold-mine on which the United States is sitting, must be carefully harnessed in order for the country to become a soccer power. Additionally, the Hispanic immigrants who are so much loathed in Republican America — could play a major role in improving the game in America.

Recently, German legend Franz Beckenbauer, infuriated the English when he said that England had “taken a step backwards” under the guidance of Fabio Capello, and that England had reverted to “kick and rush” football.

Again, another German spoke the truth ….and it hurts!

Soccer at its Artistic Best: The Magical Brazilians of 1982 — The Greatest Team Ever, Never Won A World Cup!

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