Graceland is the mansion in Memphis, Tennessee where Elvis Presley lived; it is where Elvis is buried, and it is now a museum and popular tourist attraction. Paul Simon started calling his song "Graceland" after he came up with the track, which reminded him of the Sun Records sound where Elvis recorded.
Simon says this song is an example of "how a collaboration works even when you're not aware of it occurring." He traveled to South Africa in February, 1985 and recorded with a variety of local musicians. One of these sessions was with an accordion player named Forere Motloheloa, who played on the song "The Boy in the Bubble
." These sessions produced a drum sound that Simon liked, which he described in the 2012 Graceland
"The drums were kind of a traveling rhythm in Country music - I'm a big Sun Records fan, and early-'50s, mid-'50s Sun Records you hear that beat a lot, like a fast, Johnny Cash type of rhythm."
Simon put together a rhythm section comprised of three African musicians: guitarist Ray Phiri, fretless bass player Baghiti Khumalo, and drummer Isaac Mtshali. Simon played the drums for Phiri, and asked him to play something over it. Phiri started to play his version of American Country on electric guitar, which were chords not frequently used in African music: minor chords. When Simon asked him why he played that, Phiri responded, "I was just imitating the way you write."
Simon asked him to overdub it with a lick, and along with Khumalo and Mtshali, they came up with the basic track. Said Simon, "The track has a beautiful emptiness to it. That's what made me think of Sun Records when it was nothing but slapback echo and the song."
With Phiri playing his approximation of Amercian Country, and Baghiti playing a straight ahead African groove on bass, Simon felt there was a commonality in the music, and he wrote a lyric to express that.