SA no longer continent's centre of gravity

I'm back in New York celebrating Passover with my family and then making my way, for the eighth successive year, to Omaha to attend the Berkshire Hathaway Annual Shareholders' Meeting.

Warren and Charlie may be getting on in years (Buffett is 83 and Munger 90) but I always return from the gathering wiser and more relaxed about the challenges facing the world economy.

Buffett always reminds the 40000 attendees that if he knew the troubles that lay ahead when he was born in 1930, he would have remained in his mother's womb. Last year he said for most of his life it had made dramatic sense to hold equities. The loss of cash's purchasing power had been brutal and with interest rates so low, equities were cheap. No doubt it's a message he will repeat this year.

Shareholders have built an unshakeable trust in his and Munger's judgment. When they bought Burlington Northern Santé Fe, a railway and freight business, for $45-billion in 2009, in the depths of the financial crisis, Berkshire's shares hardly flickered, demonstrating overwhelming shareholder trust for their insight.

I'm sorry I will miss celebrations that mark 20 years of freedom and democracy in South Africa. Despite our misgivings, we're a lot better than we were.

I'm not sure I fully agree with President's Jacob Zuma's boasts that we have a good story to tell. We do have a well-regulated banking system, conservative fiscal and monetary policies and our economy has expanded more than threefold over the past two decades, though our numbers fall far behind many other developing economies. We could have done a lot better. But one thing we have now that we didn't have before is the right for every citizen to express their thoughts and opinions openly and have a say in who runs the country. We also have a constitution that supports religious freedom and the entitlement to adequate schooling and health services.

Twenty years on, though, we're still battling to achieve a better life for all. Our public hospitals are in disrepair and our education system is sub-standard. Communities frequently protest against poor municipal service delivery, a third of our population subsists on social grants and more than half our youth are jobless. High-level corruption, crime and cronyism undermine business confidence, and a new mining bill that can give the government full claim to "strategic assets" is certain to deter foreign investors.

Government's failure to build on our rich mining and industrial base has cost the economy dearly and leaves us powerless to address the many challenges ahead. Last week the International Monetary Fund released its outlook on the world economy. Their research showed the global recovery was becoming broader, but growth remained subpar and uneven around the globe. Risks were decreasing but had not disappeared.

Among the IMF's worries were the weaker prospects for emerging markets, where tighter financial conditions and the increase in borrowing costs could lead to a slowdown in investment and consumption and weigh tellingly on growth. They also warned about a possible reversal in capital flows as risk-averse investors searched for relative safety in rebounding developed markets.

The IMF did, however, point out that sub-Saharan African growth continued at a strong pace and was expected to increase from 4.8% in 2013 to 5.5% in 2014. Their optimism did not extend to South Africa, where they slashed their forecasts to 2.3% and 2.7% respectively, cautioning that strikes and political uncertainty would drag down expansion. They conceded the recovering global economy would improve external demand for our goods and services, but, still, the risks in the country were on the downside.

There was more to come. Nigeria rebased the calculation of its GDP and proved its economy was Africa's largest . While we claimed the news would do little to change our status as the continent's giant, it could prove a fatal blow for our slow-moving and self-righteous leadership. Nigeria's oil revenues, 170 million population, resourceful entrepreneurs, 7% growth rate and fast-moving neighbouring countries might shift Africa's centre of gravity closer to the equator. Tilting it back southwards is perhaps the biggest test we could face in the next 20 years.