Measurement, Determinants and Consequences of Capital Flight in Sub-saharan African Countries
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Date
2005-06
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A.A.U
Abstract
Contrary to the theory of capital movement. Capital is flying from capital scarce developing countries to capital
Abundant developed connives. The study therefore attempts to investigate the capital flight issue in fourteen
Sub-Saharan African countries. more specifically this study aims to: examine the size and magnitude of
Capital flight using alternative methods of measurement. Analyze the economic factors responsible for capital
Flight and assess the consequences of capital flight on the domestic economy using econometric technique.
As found out that the size of capital flight is very large for fourteen sub-Saharan African countries especially
For Nigeria Ethiopia and cote levier. Using a panel co integration technique it is observed that the factors
Determining capital flight are many and pray from long-to short run. Moreover it is shown econometrically that
Capital flight has negative impact on the sample countries.
From the estimate it can be inferred that policy makers in sub Saharan African countries must pay more
Allenton on their foreign capital utilization exchange rate policy. Domestic credit policy and overall economic
Policies that aim at accelerating growth if these countries are to benefit from capital flight reversal.
Key Words: Capital Flight: Sub-Saharan Africa: Panel co integration: portfolio selection
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Keywords
Capital Flight, Sub-Saharan African