Research AreasAfrican Development Policy

PERI’s African Development Policy program combines applied research and capacity building to help understand the challenges and opportunities for accelerated economic development in Africa. In collaboration with selected African universities and research networks, PERI provides training for African policy makers on structural and emerging issues in African development.

January 2015 Update: The call for applications for the Association for the Advancement of African Women Economists (AAAWE)-PERI fellowship is now live, and available online here

Capital Flight from Africa: Causes, Effects and Policy Issues

Capital flight is a critical challenge to economic development in African countries. While Africa receives a substantial amount of capital inflows in the form of official development assistance, external borrowing and foreign direct investment, it also suffers a heavy financial hemorrhage through capital flight.

S. Ibi Ajayi (University of Ibadan) and Léonce Ndikumana (Director of PERI’s Africa Policy Program) have edited a new collection of analysis of capital flight from Africa with Oxford University Press. The book will be available in January 2015. Select chapters are available now as PERI Working Papers. Read them here:

>>“Capital Flight and Monetary Policy in African Countries,” by Hippolyte Fofack and Léonce Ndikumana 

>>“Capital Flight: Measurement and Drivers,” by Léonce Ndikumana, James K. Boyce and Ameth Saloum Ndiyae

>>“Governance and Illicit Financial Flows,” by Melvin D. Ayogu and Folarin Gbadebo-Smith

>>“Illicit Financial Flows and Stolen Assets Value Recovery,” by Melvin D. Ayogu and Julius Arbor

>>“Capital Flight and Poverty Reduction in Africa,” by Janvier D. Nkurunziza

>>“Strategies for Addressing Capital Flight,” by James K. Boyce and Léonce Ndikumana

Savings, Capital Flight, and African Development

Historically, countries that have achieved and sustained high growth rates maintained high domestic saving rates, enabling domestic investment and job creation. But saving in African countries has remained low, leading to high investment-savings gaps, and increased dependence on external capital. This analysis by Léonce Ndikumana, Director of PERI’s African Development Policy Program, suggests that strategies to address domestic savings should include policies to curb and prevent further capital flight (the leakage of financial resources) from Africa, the levels of which have exploded over the past decade. This paper is forthcoming as a chapter in Handbook of Africa and Economics, edited by Celestin Monga and Justin Y. Lin (Oxford University Press).

>> Read Savings, Capital Flight, and African Development

Sustaining Growth in African Countries

May 2014 -- Since the turn of the century, African countries have experienced growth acceleration, which is a welcome turnaround from the past decades of stagnation. However, the ability to sustain this growth momentum hinges significantly on the capacity to fill the large financing gaps faced by the majority of the countries in the region. In this context, while African countries need to strengthen measures aimed at stimulating domestic saving and investment, they also need to design strategies to stem the steady leakage of resources in the form of capital flight and generally illicit financial flows.

The African Development Institute of the African Development Bank, in collaboration with PERI, held a regional workshop on “Capital flight reversal and development financing in Africa” in Nairobi, Kenya, on May 12-15, 2014. Since last year, PERI and the African Development Bank established a partnership in building capacity for African policy makers in relation to emerging areas in economic development in Africa.

This course offers policy makers an opportunity to examine the nature, magnitude, causes and impact of capital flight, and to assess the potential gains from capital flight reversal in African countries. The participants shared experiences from their respective countries on the various dimensions of the problem of capital flight, as well as policies and institutional reforms that are under way to both curb capital flight and encourage capital flight reversal and repatriation. The discussions highlighted the importance of a coordinated strategy involving actions at the national, regional and international level given that capital flight is, indeed, a global problem.

The workshop was attended by policy makers from countries from Eastern and Southern Africa.

East African Policy Workshop

May 2013 -- The African Development Bank, in partnership with PERI, delivered a capacity building workshop for African policy makers in Eastern and Southern Africa on “Macroeconomic Policy for Inclusive Growth, Employment Creation and Poverty Reduction” in Nairobi, Kenya.

While African countries are witnessing growth resurgence since the turn of the century, they have not achieved commensurate progress in poverty reduction. A key reason is that growth has not generated proportionate job creation and that growth has not been broad based. Strategies to accelerate poverty reduction must therefore involve a refocusing of macroeconomic policy on ‘real’ development goals, notably employment creation and inclusive growth, over and beyond the traditional short-term objective of macroeconomic stability. In this context, this course discussed innovative policies for generating growth that is inclusive and accompanied by employment creation and poverty reduction. This is the second workshop under the AfDB-PERI partnership.

>> Read more about this series of workshops

Training Course on Capital Flight and Development Financing

April 2013 -- The African Development Institute of the African Development Bank, in collaboration with PERI, held a regional workshop on “Capital flight reversal and development financing in Africa” in Dakar, Senegal, from April 15 to April 18 2013. The workshop marks a beginning of a partnership between PERI and the African Development Bank in capacity building for African policy makers. It is expected that this partnership will grow to include other premier knowledge institutions in Africa.

Over the past four decades, African countries have lost over $1.3 trillion due to capital flight, while they face large and growing financing gaps. This is a major obstacle to the continent’s efforts to achieve sustained high growth and poverty reduction. The capacity building workshop offers an opportunity for policy makers to discuss the nature and magnitude of capital flight from African countries. The objective is to propose strategies to curb capital flight, enhance its reversal and repatriation, and maximize the gains in terms of economic development.

The workshop was attended by policy makers from sixteen countries from West and North Africa.

French Edition of Africa’s Odious Debts

April 2013 -- The French edition of Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent was officially launched in Dakar, Senegal on April 19, 2013. In Africa's Odious Debts, James Boyce and Léonce Ndikumana reveal the shocking fact that, contrary to the popular perception of Africa being a drain on the financial resources of the West, the continent is actually a ‘net creditor’ to the rest of the world. The extent of capital flight from sub-Saharan Africa is remarkable: more than $700 billion over 1970-2008. But Africa’s foreign assets remain private and hidden, while its foreign debts are public, owed by the people of Africa through their governments. The French edition – La dette odieuse de l’Afrique : Comment la dette et la fuite des capitaux ont saigné un continent – is published by Editions Amalion.

Léonce Ndikumana, Program Director
Andrew Glyn Professor of Economics
Tel: +1-413-545-1340
Judy Fogg, PERI Administrative Director: