Capital Flight From Africa: Updated Methodology and New Estimates

This report by PERI economists Léonce Ndikumana and James Boyce provides estimates of capital flight from a representative sample of 30 African countries over 1970-2015 using an updated methodology. The report finds that this group of countries lost a combined $1.8 trillion through capital flight over the 46-year period. This amount vastly exceeds the stock of debt owed by these countries as of 2015 ($496.9 billion), making the group a "net creditor" to the rest of the world. Moreover, these countries lose more through capital flight than they receive in the form of aid or foreign private investment.

This report provides estimates of capital flight from a representative sample of 30 African countries over 1970-2015 using an updated methodology. The report finds that this group of countries lost a combined $1.4 trillion through capital flight over the 46-year period. Including interest earnings on capital flight, this brings the cumulative amount to $1.8 trillion. This amount vastly exceeds the stock of debt owed by these countries as of 2015 ($496.9 billion), making the group a “net creditor” to the rest of the world. Moreover, these countries lose more through capital flight than they receive in the form of aid or foreign private investment. The evidence calls for more detailed and deeper country level investigation of the mechanisms, channels, drivers, actors and enablers behind capital flight. Such a disaggregated and institutional analysis will provide insights into possible strategies to stem the continent’s financial hemorrhage.

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