text: 77 per cent for all developing countries as a group. As a reault, gavlngs flere much royrer in Africa than elsewhere. rn fact, savlngs practically colrapsed in thelon-income countries of Africa after 1970, decllnlng from nearly t6 per cent of CDpin 1970 to less than 8 per cent in I9Z5 and to 6 per cent in 1981. ltrls is notsurprising, when per capita incomes are as low as they are in Africa today anddeclining, saving even 6 per cent of cDp is indeed a great sacrifice. 346. Even Chough the savings rate decLlned 6harpLy ln the sub-Saharan African councrles after 1970r the rate of investnent remained about 16 to 17 per cent of CDP because of an increase ln capltal inflows, private and public, froo abroad, butthis rate of investment rdas much lower than the rate in other groups of developingcountries. Since the productivity of invesCments rdas aIBo generally lohrer lnAfrica, the rate of growth of cDP was smaller than elaenhere. This, combined witha much larger rate of population growth, resulted in per caplta cDp falllng lnAfrica since 1973, while rising, on the average, ln other developing countries. 347. Africa thus is caught ln a vicious circle or poverty trap. Ipw incomed leadto lon savings. Low savings lead to lovr invesCments, and lon investments and Productivity lead in turn to low income. Under these circumstances, inadequa teforeign aid only somewhat alleviated the problem but did not break the dynamics ofpoverty in the low-income countrles of Africa. 2. Trade gap 348. In general, developing countries do not earn sufficlent foreign exchange through exports to be able to import all the ra$ materlals, intermediate products and capital gooda reguired for development. .The resulting trade gap can be closed tbrough private capital inflows, however, nore often tban not, private capitalinflows are not sufficiently large and must be supplemented by foreign aid.
analysis: The text primarily discusses the economic development of Africa, specifically the decline in savings rates, investment, and productivity, leading to a vicious cycle of poverty. It also touches on the trade gap and the role of foreign aid in alleviating the problem. The text does not mention any specific natural resources, environmental concerns, or cultural aspects, which are common themes in the other categories.