Côte d’Ivoire’s victory against Ghana during the 2015 African Cup of Nations final was widely unexpected and regarded as a historic victory. The Elephants, the Ivorian national football team, were certainly not the favourite team, but they surprised most observers with a repeat of their victory against Ghana 23 years ago, a match again won on penalty kicks.
As an economist and a football fan, I cannot resist drawing a certainly non-linear correlation between soccer and economic growth, and revisiting a compelling comparison between the different economic trajectories the two countries have taken in the last decade, and their performance in the most popular sport in the world. The relationship between soccer performance and economic performance has never been confirmed, although Goldman Sachs found an interesting relationship between World Cup victories and equity markets. According to their study, the victory outperforms the global market by 3.5% in the first month, yet such enthusiasm fades away in the months to follow.
Côte d’Ivoire and Ghana are arguably two faces of the “Africa rising” narrative in which African economies are emerging as leading poles of growth and prosperity. Ghana, the first sub-Saharan African country to claim its independence from a colonial power, has built arguably some of the best democratic institutions, and gradually picked up its economic performance. Across the border, post-independent Côte d’Ivoire emerged rapidly as a regional economic leader in West Africa, thanks to a very dynamic and diversified economy.
In the past decade, however, the tide seemed to have turned towards Ghana, which emerged as a key point of entry for foreign direct investment in Africa. Its dramatically improved business environment and new oil sector helped boost the economy, making it less dependent on gold and cocoa exports.
Incidentally, I was posted in Ghana in 2005 and became an enthusiastic supporter both of Ghana’s economic miracle and of its national football team, The Black Stars. Since then the team has consistently been among the top four countries in successive African football tournaments. It reached the 2010 World Cup quarter-final after a remarkable extra-time victory against the United States. This period also marked the first discoveries of oil, and the euphoria was just beginning.
Across the border, Côte d’Ivoire found itself in the middle of its “lost decade” of conflict, which sparked the move of the African Development Bank headquarters to its temporary home in Tunis. Many businesses moved their headquarters to neighbouring countries such as Ghana itself and Senegal, which replaced Côte d’Ivoire as the new regional hubs. Up to an extraordinary performance in 2006, the Elephants did not even pass the group stage for three consecutive African Cups.
A decade later, Côte d’Ivoire is in full recovery. It has been one of the fastest-growing economies in the world for two consecutive years. Building on a highly diversified economy and strong national planning, Côte d’Ivoire is at full throttle, banking on the historical return of African Development Bank to its headquarters and on the recent inauguration of the landmark Henri Konan Bridge in Abidjan. As an AfDB employee now based in Côte d’Ivoire and covering the West African region, it’s great to see yet another symbol of “l’emergence ivoirienne”, and feel pride in the Bank’s key role as financier of this operation.
Across the border, Ghana is facing challenges linked to a combination of high spending, rising debt and currency depreciation. The “oil dividend” has not yet fully materialised, and the country experiences frequent power outages. While Ghana has great potential, its growth rate in 2014 is expected to be nearly half of its neighbour and fellow African Cup finalist, Côte d’Ivoire.
Just as Ghana faced what many thought to be the toughest qualifying group in the African Cup, it has had to face many external challenges in its quest for economic development. But just as it lost the Africa Cup final in the cruelty of penalty kicks, its own economic path has seen a few shots go wide, and a few being saved by the goalkeeper.
Looking forward, it is not clear whether this victory will give a further boost to Côte d’Ivoire, as the Goldman Sachs study suggests, or to Ghana, which can still claim that the match against its neighbour was one of its best performances. Besides the economic impact, football competitions are social events that reinforce a sense of national identity in many countries. A trophy or even a victory against a football heavyweight makes even the most merciless critic of his own country feel proud. Coming together over a football victory can help Côte d’Ivoire to consolidate its economic growth and peace trajectory.
Emanuele Santi is Regional Chief Economist for the African Development Bank’s West African Department. This article was first published on the AfDB’s blog.