I am not surprised that in the midst of rising inflation, financial meltdown and emerging food crisis, Shanta remains optimistic about Africas growth prospectshe is an eternal optimist. And in some cases he has proven to been right. In his paper "South Asian Surprises", he successfully argued that many South Asian countries are growing rapidly and succeeding in their poverty reduction efforts despite being afflicted by some of the same factors that stifled growth in other parts of worldBangladesh (corruption), Sri Lanka (civil war), India (high fiscal deficit) and so on. Is he then correct on his new prognosis on Africa?
I for one remain unconvinced. Here are the three basic stylized facts about the Sub-Saharan African (SSA) economy that makes me a hold-out. First, countries in SSA are finding it difficult to transit from agriculture to manufacturingin fact their share of manufacturing in GDP is either stagnanting or falling. Second, their gross domestic savings to GDP ratio is low and fallingimplying that their dependency on aid may be rising. Finally, about one-half to two-third of countries in SSA continue to be governed by the same political party (in most cases the same leader) for more than two decadesmaking it harder for these countries to admit the problem and to change course.
Nevertheless, I do hope that I am wrong and Shanta is right in his prognosis!